Today I saw two men at a gas station fight to see which of them would get to go through the trash in front of the store to look for cans, bottles, or thrown away food. It became violent so quickly and the ferocity of hunger was so clearly etched in both their faces that the people putting gas into their cars, me included, were all shocked and frozen, for a moment like statues. No one there wanted to get involved because the situation was dangerous. Hopeless doomed people were fighting over our trash and we had no idea what to do about it. Perhaps we saw too much of our own desperation and our own fear to try to do anything about it. This is the new America and we are all poor. This is how we got there:
In 1619 the first recorded slaves in the British American colonies were brought to Virginia to grow tobacco. ?Slaves had already been in Spanish America since 1581. It wasn’t until 1865 when slavery, and involuntary servitude, was abolished in the United States via the Thirteenth Amendment. For over two hundred and forty six years our land, our nation, had slaves. For the one hundred years after slavery and the civil rights era began Americans of perceived African descent were subjected to unspeakable indignities and humiliations. In a brilliant article by Ta-Nehisi Coates, The Case for Reparations, the argument is laid out that America will never be free until we address the debt to those whose labor we stole to build “the richest and most powerful nation on earth.”
The Thirteenth Amendment:
Section 1.?Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.?(Emphasis mine.)
Section 2.?Congress shall have power to enforce this article by appropriate legislation
This discussion of the history of slavery may seem an odd start for an article about why you are poor since the majority of the country isn’t of African descent. Many of us may even be from families that emigrated to the U.S. during or after the civil war. We may feel this debt, this burden of guilt, isn’t one we owe. I would suggest you read Mister Coates’ article and then think about how being perceived as white has brought certain benefits to those of us in the majority. ?But this history is relevant if we are going to understand where we are today. Because it is the same story of?rentier capitalism?that is enslaving us through poverty today. From Wikipedia:
Rentier capitalism?is a term currently used to describe economic practices of parasitic monopolization of access to any (physical, financial, intellectual, etc.) kind of property, and gaining significant amounts of profit without contribution to society.
African Americans represent thirteen percent of the population and they are expected to stay at that same percentage until 2050 and beyond. ?Even though black people have been, and are being, exploited by the majority population we cannot explain this new deep poverty of America just by looking at them. We can see that this new poverty hit them first and that the unwillingness of white America to do anything about it laid the groundwork for our own demise, but that doesn’t explain this new countrywide poverty. To be brutally honest a society could brutalize, exploit, mistreat, rob, imprison, criminalize and disenfranchise thirteen percent of its population and still have a large middle class, a functioning democracy, and a relatively just society, for everyone but those of the discriminated class. But even that fictional 1950’s model no longer applies to our country today.
The rich of this country built their fortunes on slave labor. Our economic order was founded on and is addicted to creating wealth by stealing labor even more than it is addicted to self immolation by killing the planet. The corruption is so deep and so pervasive that you could choose randomly almost any issue in the country to illustrate and illuminate our plight.
Let’s take an example offered by America’s version of the prophet Isaiah, Dr. Cornel West, who regularly cries out in the wilderness and waves the mirror of truth in our collective American faces. ?He gave an interview to?Salon?recently and pulled no punches. What he says is unpleasant and difficult for many of us to hear. On August 4th he gave a speech repeating his claim that President Obama is a war criminal.
In Salon, Dr. West tells us things we all know but feel uncomfortable admitting. ?He gives us real prophecy and gives us permission to admit what we all know that it is not just our economy that is in decline, not just our Empire, but also our culture.??Doctor West on Barack Obama:
No, the thing is he posed as a progressive and turned out to be counterfeit.
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However it is toward the end of the interview that brings out his fundamental problem with the President. Obama ?embraced and blindly accepted the discredited and failed economic policies of President Bill Clinton’s economic czar Robert Rubin and Rubin’s acolytes Larry Summers and Tim Geithner. We are reminded that President Obama, by his own admission, shielded the bankers FROM the pitchforks during the financial crisis when he should have been trying to live up to his flowery speeches. ?Prophet West points us to the problem we face; our economy itself is fundamentally, perhaps irreparably, broken.
We live in a country where one in four working people earns less than ten dollars an hour. Since eighty-one percent of us live in cities and there is not a city in America where you can live on those wages that means twenty-five percent of us are automatically poor. ?And God forbid that you live in a major city where making minimum wage is a virtual slow death sentence.
But these are all symptoms of the disease called poverty we are suffering from. What was, or is, the cause? If we can’t find that it will be impossible to find the cure.
There are two main causes to this disease that if treated we would see almost immediate restoration of health.
The first cause of our long economic malaise goes back to the history lesson we started with. The rentier class is addicted to slavery. In 1991 fifty-six (56.2) percent of all clothes sold in America were made in America, mostly by unionized workers. Today that number is two point five (2.5) percent. ?Two point five percent is basically an acceptable rounding error in most math problems. We didn’t lose those jobs to more competitive economies. We lost those jobs to slave labor. In Bangladesh the average monthly wage is sixty-eight dollars. And those workers live without hope, without a future, and have died making clothes for American retailers. Our trade treaties allow Ralph Lifshitz, you know him as Ralph Lauren of Polo, to put the American flag on the majority of the clothes he makes while he uses slaves to do the work. Besides the fundamental question of how can the son of immigrants hate America so much that he would destroy thousands of jobs to make an extra penny? Or the obvious question of how can our Congress pass a trade treaty that fundamentally violates the Thirteenth Amendment? By definition, any country we enter into a trade treaty with is a place agreeing to be subject to the jurisdiction of our laws, or, at the very least the terms of the treaty. Which by the amendment should prevent any slave made goods from being allowed into our country.
If Congress enforced the obligation to the Constitution that they swear to at the beginning of every new session they would have no choice but to either ban slave made goods from other countries or, at a minimum, and to create less disruption in the economy, place a slave tariff on those goods. Taking Polo, Nike, or Apple as examples they could place tariffs on those goods that would be equal to the American wages lost without changing the customer price at all! What would change though is the wage theft Mister Lifshitz currently gets away with. We could equally name Phil Knight or Tim Cook or the CEO of Gap and the list is virtually endless. We could bring CEO pay down to earth by simply taxing the illegal portion of their pay.
So this addiction to slavery is part one of the reason our country is in trouble. It is impossible to have economic competition when your competitor is willing to work their slaves to death. ?Newt Gingrich stated in The Wall Street Journal ?that “the price of labor is set in South China. ” Of course he forgot to mention that the price of that labor was set by a military government paying their own people wages no free person could possibly live on.
Which brings us to the second reason our economy is in decline: Stealing from ourselves. I’m not referring to the wage theft that almost every major company engages in. Not the illegal practices of Wall Mart, or the unclaimed hours worked by Gap employees, or even the fast food payment schemes where they pay workers using multiple names or claim the hours were worked at multiple stores so they can avoid paying overtime. We could make the case that as productivity increased in the United States in every profession those gains in wealth were stolen. All of that is well known, easy to prove. But this next reason explaining the death of the American economy as we knew it is more damaging long term and, perversely, may someday save it.
This reason? The rentiers are now reduced to stealing from themselves. In Septembers ?The Harvard Business Review, William Lazonick has researched an article, “Profits Without Prosperity”, that like Doctor Cornel West’s ?writing speaks truth to power. Specifically how the companies of the S&P 500 Index have misspent ninety (90) percent of their profits. One company he mentions by name, Pfizer, has actually had to borrow money, as has Apple, to buy back its stock and enrich the CEO class. Pfizer gets special mention because they have managed to spend more on stock buybacks and dividend payments than they actually made. Which creates a bizarre world of a company paying out dividends on money they haven’t made and borrowing money to do it. ?This article shows and explains why this practice of unfettered, irrational stock buybacks hurts the companies, the shareholders, and the overall American economy. The companies have used over fifty percent of their profits to buy back stock, which artificially inflates stock price and has then, on average used about thirty to forty percent of profit for dividend payments. Which leaves very little for actually investing in, and growing, the business.
You may be thinking that this doesn’t mean anything to you and me or the economy. After all we have been told since the 1970’s that corporations only exist to make profit and reward shareholders. But this is a relatively new philosophy and in reality we used to espouse what is now called the German business model. The German model has three tenets: Company, Employee, Community, and the interests of all three are considered equal. In Germany half the board seats of every company are filled by workers. So the CEO takes all approach of American business is not the only way. What American companies are currently doing is stealing money that should go into Research and Development and workers pay. By shortchanging those two things every one of those companies are eventually doomed to fail. When coupled with those same companies borrowing money to buy stock at inflated prices it is clear to see that when interest rates rise and the economy stalls there will be trouble. ?Those companies will collapse creating another deep and painful Greater Recession or Depression.
But if we are not going to fix our economy using intelligent and compassionate legislation then it must be fixed by the eventual assertion of reality. This house of cards will eventually fall and when it does, even though it will be painful, this time the fall will be so great that we will not be able to blindly print money and throw it at the CEO class. This coming collapse, even though it is unnecessary and can be prevented, will happen simply because our leaders refuse to see what we all already know, what those men fighting over scraps in a can know, ?that it has already started. It started the moment we allowed Chinese slaves to make our shoes and the CEO’s to steal first our pensions and now our 401k’s. For those who continue to “save” money by investing in stocks you need to divest now. What the “theft class” of CEO’s are doing is borrowing money to buy stock, or using company money to buy stock that should be spent elsewhere, to drive up the price. You are basically spending two dollars to buy fifty cents and that is the opposite of saving.
These two causes?of our national collapse that?we’ve discussed are not the only causes. We could talk about education, prisons, the failed war on drugs, and this sad list, would also seem endless. However to begin healing, to begin creating an economy where we are not all fighting over garbage, for the leftovers thrown to us by the rentiers, we must stand up and insist that slavery must end, that our Constitution means what it says and says what it means. If we take two simple steps: Stop stealing labor and stop stealing profits, we can create a new America, a just one, one finally free of slavery.
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