With the 2014 election cycle gearing up and the 2016 election on the
horizon a lot will be made of the deepening divide between the rich and the poor
and the haves and the have-nots.
In just the latest high profile rant from billionaire Thomas Perkins
co-founder of Kleiner, Perkins, Caulfield and Byers a former venture capitalist
claims that the poor are like the Nazis. The Occupy Wall Street movement is
akin to Kristallnacht the infamous assault by the Nazis on Jewish homes and
businesses marking and aggressive turn in the persecution of the Jews. Mr.
Perkins’ misguided comparison blaming the poor for the plight of the rich is
just the latest by the well to do complaining that they now are the persecuted
class and what did they do to deserve all this bullying by those who are jealous
of what they have?
Nothing happens in a vacuum, sir. Although with the press always chasing
the latest shiny object, one might question as to what has led us to this point
so quickly? In reality, these turns of events began gestating nearly a
generation ago under President Ronald Reagan. They largely lay dormant under
the Bush 1 and then under Clinton era presidencies, who passed The North
American Free Trade Act. But the assault on the poor and middle class picked up
full stream and in many ways took on a life of their own culminating in a
perfect storm under the presidency of Bush 2/Cheney.
Several factors have let to the divide between rich and poor as we sit in
2014: Mergers, acquisitions and Wall Street and pay to play government play an
enormous role. Deregulation of and the loosening of ownership rules for media
and communications companies also fact in weakening what some used to call our
fourth branch of government, the press.
Cause: Starting a generation ago President Ronald Reagan
loosened rules governing FCC regulation on media ownership. Provisions rules
such as “equal time” and the “Fairness Doctrine” which had provided equal time
for each side, right and left, to get their messages out equally were no longer
enforced and deemphasised. For those of you living in a time where you know
nothing other than Fox News representing the right and MSNBC the left,
understand that the major networks were required to give each side equal
standing to present all sides. if they presented one point of view, they were
required to present the other. The benefit was that people heard each argument
rather than in the present day entrench themselves under the propaganda banner
in which they agree. We now have media giants like Viacom,
Comcast/NBC/Universal Disney/ABC controlling content and delivery.
Effect: Greater polarization of political ideologies. Media companies
consolidating and no longer having to compete in single markets being able to
own multiple stations or newspapers in a single city effectively controlling the
message. Ratings rather than quality now the standard.
Cause: We have seen tremendous merger and acquisition
activity in the past 25 years. Household name company logos such as Northwest
Airlines, GTE, McDonnell Douglas and American Motors that were familiar to
millions have disappeared. Many brands that have remained such as Coors Beer
and even Budweiser are now just hollow brand names part of even bigger
conglomerates that produce adult beverages. The consolidation of American
business has been happening at an alarming rate over the last 25 years. These
large companies all extol the virtues of competition when they want to release
themselves from government regulation, interference or taxation but when it
comes time to eliminate their direct competitors they aggressively lobby our
government officials cozying up to them for approval claiming that it will make
their business more efficient. Effect: Fewer well paying jobs
through consolidation combined with a growing population equal greater
competition for what jobs are left. Income stagnation. Consolidation of power
and proprietary relationships developed with government representatives in the
legislative and executive branches.
Cause: Wall Street is the bastion of capitalism. It is
the free market at work. Until of course it all falls in on itself. Then we,
the tax payer have to bail them out. Why? Because if we don’t, they take the
rest of us with us. Our stock market is fundamentally flawed because in
American business today, our biggest businesses measure themselves three months
at a time. Decisions on growth, new business, hiring and firing and research
and development all hinge on the previous quarter and year-end profit and loss.
Contrast this with developing countries such as China or India which takes a
long term approach to business and societal success. Result:
A disloyal workforce and even more disloyal employers willing to cast
aside human resources without warning like aging, outdated equipment. An
outsourced labor force to circumvent US labor laws causes chronic historically
high unemployment.
Pay to Play Government: A generation ago Watergate
exposed corruption and lawlessness at the highest levels of government. It was
a shock to many that the President of the United States could be behind a
criminal enterprise while in the White House. Today just 40 years later we have
a loosening of laws that actually allows lobbyists and interest groups to write
actual legislation that OUR elected officials put their names to and have passed
into law benefiting those interests. Bills making it Ok to send jobs overseas
have decimated our service and manufacturing economies systemically weakening
our economy and displacing hundreds of thousand of workers. Our lawmakers
gerrymander districts whereas voters no longer pick their representatives but
representatives pick their voters. The rich and wealthy wine, dine, entertain
and have access to those that are supposed to represent us yet we in our best
efforts could not even dream of meeting our elected officials. Representatives
in the House and Senate have access to financial information provided by
companies they are supposed to oversea allowing themselves to capitalize on
their knowledge and create great wealth for themselves. Is any of this against
that law? No. Should it be? Absolutely yes. But who will represent us if our
representative government is not?
Effect: Tremendous mistrust of our government
and a feeling that only the privileged few who can afford access and
benefit from our government.
You add into the mix Supreme Court rulings such as Citizens United where
corporations are deemed to have the same rights as people under the
Constitution. You now have individuals and companies competing with one another
over rights afforded us under the Constitution. What happens when those
interests collide? Who prevails has yet to be determined. However with the
current conservative make up of the court court and recent rulings one can only
wonder how long it will be before the pendulum swings even further to the side
of big business. Pile on the narrative that some who have unprecedented
means claim that those that do not are “takers,” we are backing into the making
of a class war. What is even more unbelievable is that those that have think
that they have accumulated wealth all on their own, without anyone else’s
assistance.
So the answer, Mr. Perkins is that all this has not happened in a vacuum.
When stock price is more important that long term corporate growth and societal
well-being, the citizenry becomes fed up. With unemployment high, with jobs
evaporating and moving overseas the natives, for lack of a better term, are
beginning to get restless. People start to ask a fundamental question: do the
people of this country exist to prop up business and corporate interests or are
these entities a byproduct of our way of life: democracy, capitalism? The
United States is no longer a leader in education or health care or even quality
of life. Statistically the United States is not even near the best country to
be able to start from nothing and get a head despite what our elected official
proclaim in high profile rhetorical speeches. Wages for the middle class have
been stagnant since the 1980s while those in the 1% have gained
disproportionately.
So don’t worry about your money, your status and your way of life. It is
not in imminent danger. You have enough of even middle class and working class
people fooled. But it won’t be long if there is not a change and you may say to
yourself, “we have seen the enemy and he is us.”