Third World America - Arianna Huffington [19]
Many, including Bush 43, lay the blame on a few rotten apples: “Wall Street got drunk,” he said.20 Maybe so, but who made the Bush years a nonstop happy hour and kept serving up the drinks?
Of course, Republican leaders were not the only ones drinking the free-market Kool-Aid. It was also chugged by New Democrats such as Bill Clinton. He came into office knowing it was the economy, stupid, then proceeded to oversee a presidency focused on the soaring Dow Jones industrial average, even as the number of Americans living in poverty stubbornly refused to dip below thirty-two million, and the number of Americans unable to make ends meet without the aid of a soup kitchen or food bank hit twenty-six million—with more homeless children than at any time since the Great Depression.21, 22, 23 Yet the Clinton White House’s messaging was like a twenty-four-hour Boom Channel: All Prosperity, All The Time.
In those go-go years, even being downsized could, in the eyes of the free-market evangelists, be turned to your advantage. In early 1996, after forty thousand AT&T workers were pink-slipped, future Mad Money host (and Jon Stewart whipping boy) Jim Cramer, then still a hedge-fund manager, wrote a piece that landed on the cover of the New Republic.24 Headlined “Let Them Eat Stocks,” the article found a silver lining in the dark cloud of the massive layoff, proposing that the fired workers be given stock options. “Let them participate in the stock appreciation that their firings caused,” Cramer gushed. Cue Eric Idle’s “Always Look on the Bright Side of Life.”
Four years later, Bush v. Gore ushered in the CEO president and his CEO VP. They promptly threw open the White House doors to their corporate cronies from Enron and Halliburton and declared open season on the interests of the average American.25 The Enronization of our economy was under way.
THE RICH GET RICHER
The Reagan years ushered in the era of the widening income gap. The rich grew considerably richer while the real income of everyone else, from the poor to the middle class, either slid back or, at best, leveled off.
In their paper on long-term change in the U.S. wage structure, economists Claudia Goldin and Lawrence Katz of Harvard and the National Bureau of Economic Research reported, “From 1980 to around 1987, wage inequality increased in a rapid and monotonic [i.e. steady] fashion.26 Those at the top grew most rapidly, those in the middle less rapidly, and the bottom the least of all.… [These] wage structure changes have been associated with a ‘polarization’ of the labor market with employment shifting into high- and low-wage jobs at the expense of middle-wage positions.”
By the late 1980s, due to changes in technology, outsourcing, and the loss of manufacturing jobs, the middle class was sputtering. Even as productivity rose, the wages of the average worker remained flat.
In 1995, the midway point between the Reagan Revolution and today, John Cassidy penned an article in the New Yorker entitled “Who Killed the Middle Class?” Cassidy had his readers imagine a lineup composed of every American, arranged from poorest to richest.27 The individual exactly in the middle—the median—was arguably the most middle-class person in the nation. That man or woman, in September 1979, was earning (in constant, inflation-adjusted dollars) $25,896 a year. In September 1995, that same man or woman was earning $24,700 a year—a 5 percent cut in salary over the intervening decade and a half.
In contrast, the nation’s top 5 percent saw their pay rise 29 percent over the same period, up to $177,518.28 And the top 1 percent did best of all. In fact, between 1977 and 1989 the richest Americans’ average income rose from $323,942 to $576,553—a whopping 78 percent increase in real terms.
The trend continued into the first decade of the twenty-first century.