America’s first Civil War was formally declared and fought using traditional means. It was the deadliest war in our history, a fact that resonates with the fierceness of the passions it aroused. It’s deadliness had a more prosaic cause, however: the invention of smokeless gunpowder allowed defenders to mow down the massed assault formations that were effective in prior wars. Confronted with that deadliness, the North (principally under Sherman) recognized that to win it had to destroy the productive capacity of the South. So the first Civil War was our first exercise in industrialized warfare.
But the victors struggled for a cause that we could recognize as noble: preservation of democracy against the forces of division, and liberation of an enslaved population.
The second Civil War was not formally declared, but it ran through the first half of the twentieth century. Though the issues in the conflict were the cause of many revolutions throughout history, in the American case the war was fought principally in political circles. The conflict centered around the rights of inherited wealth, which tempts its holders to impoverish the public so that it can acquire tangible property.
The first stages of this war were violent: coal mine and port operators responded to strikes by sending in security forces to gun down striking workers. It was this violence that pushed the early labor unions into the arms of organized crime. Public revulsion led to legalization of trade unionism with declared rights for workers and procedures for management of workplace grievances.
That effort was only a pre-amble, however. The real action came during the Great Depression. The owner class sat on its hands in the aftermath of the financial collapse, refusing to invest in production because there were no buyers. Those that did have money were able to buy at cut-rate prices. The deflationary pressure caused the real value of their dollar deposits to increase with every factory closure. They had no interest in priming the pump to restart the economy.
There were two courses forward for the public: the first was international communism, the second was to set up the federal government as the employer and purchaser of last resort. It was fear of violent Communist rebellion that stimulated Roosevelt to accept Keynes’ theory of deficit spending and establish a federal bureaucracy that could secure the well-being of the middle class against the rapacious profit-seekers that had destroyed the financial system.
The third America Civil War has been running since 1980. It has united the racism of the defeated South to the greed of the financial class. It has been funded and organized by large multi-national businesses that are no longer checked by federal power.
The primary methods of the assault on middle-class security have been these:
Deregulation of industries that protect the middle-class
This began under Reagan with deregulation of the Savings and Loan industry, an action continued under Alan Greenspan at the Federal Reserve, who refused to step in to control predatory real estate lenders in the first decade of this century. The first disaster cost America $500 billion dollars. While the second disaster is normally described as having a similar cost, in fact it is far larger: to cover for its incompetence the Federal Reserve has accumulated $3,000 billion dollars in assets, a position that was acquired by issuing debt to itself.
(In effect, through the Federal Resrve the federal government is no longer the employer of last resort. It is the purchaser of last resort, thereby guaranteeing asset prices for the rich at the expense of the rest of the public.)
But it didn’t stop with the financial system. Environmental Protection, Food and Drug Administration, Occupational Safety and Health, and the Internal Revenue Service have all been systematically assaulted by conservative politicians that are beholden to the rich.
These attacks have been rationalized by the huge federal debt, a debt generated by Republican resistance to revenue increases. The latest tax bill is a perfect case in point: after accounting for price increases in essential services such as health care, the bill will benefit only the most wealthy of all Americans. It is a con, pure and simple.
Federal indebtedness is now going to be used to justify elimination of Social Security and Medicare, two programs financed by the middle class through wage garnishing and taxation. According to policy declared by Paul Ryan, those programs are going to be handed over to private investment firms, where (if the precedent established with the Savings and Loan industry holds) they will be gutted.
When he came into office, Barack Obama reached out to American business leaders for ideas on how to get the economy rolling again. What he found was that the prescriptions offered were not linked to concrete industrial commitments. Rather, the prescriptions reflected a culture of blame-avoidance whereby which industrialists shifted responsibility for their ineffectuality to the federal government.
These attitudes reflect the decoupling of executive compensation from value generation. Direct compensation for executives is already in the tens of millions of dollars a year, but it is supplemented by stock bonuses that can run into hundreds of millions of dollars. Bonuses are direct transfers of wealth from shareholders to executives. There is no way to justify these kinds of compensation levels, because what makes a company successful are the motivation and creative capacity of its workers. Executive compensation practices outrages and demoralizes those workers.
Paradoxically, when a company is in trouble, executive compensation negotiations become more and more unbalanced. A new executive with a fat compensation package rolls in, promising great change, and confronts a workforce hostile to their presence.
What is true is that when the company fails, the executives are left with huge pots of money that they can use to paper over their failure, and that money has been invested in think-tanks and politicians that blame governmental regulation for the failures of American business.
In fact, the forces that hobble American business are overwhelming global economic trends. Executives need to be honest and humble regarding their failures and worth.
Disenfranchisement of the Politically Sophisticated
To cement their privileges, the monied classes have financed the political polarization of the American Heartland. The federal legislature and electoral college are both tilted to small states, where each voter has three times as much weight as voters in large states. Small states have urban centers with politically sophisticated populations, but even there gerrymandering of districts has given weight to rural populations that survive principally through exploitation of natural resources.
The rhetoric of this polarization is astonishing. ObamaCare was “health care for black people.” The National Rifle Association protects the public by ensuring that we have the firepower to fight back against a tyrannical government. Illegal immigrants are not an exploited industrial sub-class, but stealers of blue-collar jobs.
The purveyors of these positions do not feel the need to provide factual substantiation. They simply lie. They are catering to a sub-population that has been conditioned by fear to seek powerful protectors, and so are susceptible to promises offered by the wealthy.
The end-game is visible in Kansas and Oklahoma and other states that followed the “less is more” rhetoric of government. Essential public services are collapsing. Opioid addiction is driving down life expectancy nationally. It is the Hunger Games brought to life.
Transfer of Executive Power to the Speaker of the House
When Franklin Roosevelt, architecture of the federal system that protects middle-class rights, died during his fourth term, the Constitution was amended to limit presidents to two terms in office.
While this is sound public policy, it has not addressed the dangers of life-time office holders in Congress. This has allowed Paul Ryan, occupant of a safe seat in Minnesota, to build a political empire that has given him control of the federal government. That control is effectuated behind the scenes, out of the public limelight. With control of the judiciary, taxation and budgeting, Caucus leaders such as Ryan and McConnell now have the ability to act unilaterally and arbitrarily to remake the federal government.
It is clear that their prescription is to return as much of the country’s wealth to the upper class as they can. That class includes the class of lifetime holders of political office such as themselves.
Next: Prognosis for the Future…