Wednesday, September 27, 2006

Must Read Interview!

BuzzFlash interview: Thom Hartmann
Coming to the defense of the embattled, and shrinking, middle class

"Middle Class" was, until recently, a description that most Americans felt described them. We all felt we were middle class if we had a steady income, a decent home, and a shot at an even better life. But today, as Thom Hartmann helps us understand, the middle class reality is slipping away. As author Paul Loeb has written, Hartmann's new book, Screwed, "explores why, showing how this is no accidental process, but rather the product of conscious political choices, choices we can change with enough courage and commitment. Like all of Thom's great work it helps show us the way forward." BuzzFlash and Thom Hartmann talk here about the myth of a free market economy and government's role as the arbiter of trade and wealth.

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BuzzFlash: Your new book is "Screwed, The Undeclared War Against the Middle Class and What We Can Do About It". First of all, what is your rough sketch definition of the middle class?

Thom Hartmann: I would use the definition that Teddy Roosevelt came up with when he defined a living wage as being pretty much the same thing. Somebody who’s earning a living wage is probably in the middle class. Working a normal work week, one person is able to support a family in a way that they can put their children through school, including college, they can pay for all of their medical and health expenses, they can have enough set aside for a safe retirement, they can have enough to take and enjoy a vacation every year, they can live comfortably and meet the needs of their family -- I guess that’s pretty much it. I can’t remember his words, but I think that that’s pretty much it. I play that sound clip of him from 1912 all the time on the radio program.

BuzzFlash: A lot of your writing is concerned about American politics and the Revolutionary and Constitutional heritage of the United States. How does that point in our history relate to the issue of the American middle class?

Thom Hartmann: Well, we’ve had two periods in the United States when there was a substantial middle class. The first was from the time that the country was founded up to about ten-fifteen years before the Civil War. That middle class was established by virtue of cheap land -- cheap resources, basically. The person-to-resource ratio was such that there was a lot of wealth. Granted, many of those resources came from stealing land from Native Americans and enslaving Africans. But nonetheless, setting aside the obvious moral issues of that, that middle class came about as a result of basically cheap land and cheap labor.

The second middle class came about starting in the late 1930s as a result of Franklin Roosevelt intentionally interfering in the marketplace. The passage of the Wagner Act in 1935 and a series of specific interventions in the marketplace said to business essentially: if you want to play the game of business in the United States, you’re going to play by federal rules that are going to establish a middle class, and not just make a profit. What’s significant about these two periods is that, in both cases, the middle class emerged as a consequence of something that violated the normal rules of laissez-faire free market capitalist economy. The first was that cheap land and labor, which was, in a way, similar to the original Renaissance, because after the black death in Europe where there were so few people, labor was in such demand, and the wealth-to-person ratio dramatically increased because of the death of a third of the population of Europe.

Whenever you see a normal functioning economy without intervention, without government regulation and without participation of either workers through unions or the people through government, what you’ll find is the normal outcome of laissez-faire economics -- which is no middle class, or a very, very small mercantile middle class. In Europe for a couple of thousand years, you had a small class of wealthy ruling elites, and a very, very large class of working poor, and then a very small class of people in the middle who were able to carve out a middle for themselves, usually by virtue of expertise. They are the expert jewelers or the expert watchmakers, the stonecutters, and also the small shopkeepers -- the butcher, the baker, the candlestick maker. But not their employees.

The lesson of this is that a middle class is not a normal phenomenon. A middle class has to be created. It will either be created by external circumstances, as in the case of Europe after the black death, or the United States in the colonial times, or it’ll be created by internal circumstances -- the people through their elected representatives saying we’re going to modify the rules of the economy to intentionally create a middle class. That’s what Europe has done largely since the 1940s, although you could argue that that movement started in the 19th Century. And that’s what the United States did, starting with Franklin Roosevelt, and intentionally stopped doing, or began the radical slowdown of, starting with the election of Ronald Reagan in 1981.

BuzzFlash: Many people think of the post-World War II era as the golden era of the middle class. Is that a correct assumption or stereotype?

Thom Hartmann: Yes, it truly was. We saw real wages rise, and rise substantially, from the 1930s right up through the late seventies, early eighties, depending on which numbers you're looking at. We’ve seen the wages of the middle class basically erode since that time, although the wealthiest among us have seen an explosion in their wealth since Reagan began changing the economic direction of the ship of state.

BuzzFlash: The title of your book is certainly provocative -- Screwed -- The Undeclared War Against the Middle Class -- but who’s conducting this war?

Thom Hartmann: There are two groups of people participating in the destruction of the American middle class. The first is those who benefit directly from it economically -- basically the "pure capitalists," or people who derive most or all of their income from their investments, and simply want to maximize return on investment. Some very wealthy families have been working in this direction -- for example, the Walton family, who helped fund the ten-plus-year effort to change the use of the term estate tax to "death tax."

Then the second group is the ideologues, the true believers -- the libertarians and objectivists who read Ayn Rand and truly believe that pure unrestrained laissez-faire capitalism is not only a good economic system, but is also a good political system. They’re perhaps the most dangerous and destructive. Those are the Grover Norquists of the world. And they get it that there’s something in it for them.
~ snip ~

BuzzFlash: Let me close with one recollection, which certainly is a telling moment that speaks to your book. Bush had one of his many staged townhall meetings. There was a woman on stage with him and he was asking her what her family life was like, and did she work? And yes, she worked three jobs. She needed to work three jobs. And he said, “That’s fantastic. That’s so American,” or something to that effect. Here is a woman working three jobs just to get by, and Bush praises her for being such a good American. It used to be the dream of the middle class that if you worked one solid job, you had the night with your family. You had weekends off. You could afford your kid’s college tuition. You could save for retirement. Bush's new role model is a woman with a family who works three jobs. What does that say to you?

Thom Hartmann: It perfectly crystallizes the entire thing. George W. Bush was born a multi-millionaire and feels the entitlements of being a member of the ruling class economically and politically. He apparently was not raised with the sense of noblesse oblige that, at least, Joe Kennedy was good enough to impart to his children -- that if you’re wealthy, you have some obligation to society. And so you’re just seeing it in a very raw form -- the belief that there are rulers and there are the ruled. There is the overclass and there is the underclass. And there’s really no need for a middle class in Bush’s world, in the conservative world.

BuzzFlash: And the role of the underclass is to work three jobs.

Thom Hartmann: That’s right. Because if you’re working three jobs, you’re not going to be politically active. You’re not going to be a pain in the butt. You’re not going to be uppity. You’re not going to be problematic for the political and economic forces that are running the country. You’re not going to be in anybody’s way because you’re out there working. So let’s just pat them on the head and say, yeah, keep it up. That is the conservative role model.

This is a great interview, defining how a middle class comes about, and how we can work to save ours. Please, if you have the time, go read the whole thing.

hattip to Working For Change Buzz Flash


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