Along with the US imperialist occupation and war on Iraq, and an increase in US imperialist intervention elsewhere there has also been an ongoing war which is taking place at home here in the US.
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It is a war on the US working 
class, and this war also extends to all working class people of all nations.
class, and this war also extends to all working class people of all nations.___
Imperialism and class warfare are all connected to the capitalist socio-economic system.
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I am posting part of an article about this class warfare, as well as a link to a program with an interview and discussion with author Jack Rasmus.
Class War At Home: Discussion with Jack Rasmus, author of
new book" The War At Home: The Corporate Offensive From Ronald Reagan to George W. Bush"
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The Trillion Dollar Income Shift, PART 1
by Jack Rasmuscopyright 2007
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For three decades a ‘Great Leveling’ of incomes between classes in America occurred as the standard of living rose for tens of millions of American workers and their families from 1942 to the mid-1970s. American working class families received a share of record gains in productivity. Real wages rose. Guaranteed retirement benefits—private pensions and social security—were greatly expanded. Health insurance plans were negotiated. Medicare was added for the aged. K-12 public education was truly free and public colleges and universities nearly so. Unions represented 25%-35% of the work force, and typically 60% and more in key strategic sectors like construction, manufacturing, and transport. The tax burden for workers rose relatively slowly and corporations and the wealthy still paid a fair share.
For three decades a ‘Great Leveling’ of incomes between classes in America occurred as the standard of living rose for tens of millions of American workers and their families from 1942 to the mid-1970s. American working class families received a share of record gains in productivity. Real wages rose. Guaranteed retirement benefits—private pensions and social security—were greatly expanded. Health insurance plans were negotiated. Medicare was added for the aged. K-12 public education was truly free and public colleges and universities nearly so. Unions represented 25%-35% of the work force, and typically 60% and more in key strategic sectors like construction, manufacturing, and transport. The tax burden for workers rose relatively slowly and corporations and the wealthy still paid a fair share.
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Then, after three decades, the hourglass of history was inverted. Stood on its head. The ‘Great Leveling’ of incomes became, after a brief interregnum from 1974-1978, a ‘Great Reversal’. From the mid-1970s until the present a widening income gap began to open up, as it once had in the decade leading up to the Great Depression after 1929. Income inequality grew as income shifted from working class families to the wealthiest households and corporations. From the early 1980s on income inequality widened, deepened, and accelerated until today well over $1 trillion in income is being transferred every year from the roughly 90 million working class families in America to corporations and the wealthiest non-working class households.
Then, after three decades, the hourglass of history was inverted. Stood on its head. The ‘Great Leveling’ of incomes became, after a brief interregnum from 1974-1978, a ‘Great Reversal’. From the mid-1970s until the present a widening income gap began to open up, as it once had in the decade leading up to the Great Depression after 1929. Income inequality grew as income shifted from working class families to the wealthiest households and corporations. From the early 1980s on income inequality widened, deepened, and accelerated until today well over $1 trillion in income is being transferred every year from the roughly 90 million working class families in America to corporations and the wealthiest non-working class households.
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How did this happen?—a question more important perhaps than even the current income gap itself.
How did this happen?—a question more important perhaps than even the current income gap itself.
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After expanding both in scope and magnitude since the late 1970s, today’s widening income gap has finally begun to penetrate the periphery of public debate. Driven by policies, corporate and government, that have enabled and made it possible, growing inequality of incomes in America can no longer be hidden from public scrutiny.
After expanding both in scope and magnitude since the late 1970s, today’s widening income gap has finally begun to penetrate the periphery of public debate. Driven by policies, corporate and government, that have enabled and made it possible, growing inequality of incomes in America can no longer be hidden from public scrutiny.
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From thoughtful analyses of shifting income shares by young academic-economists like Emmanuel Saez of the University of California, Berkeley, to focused commentary on the topic by media-economists, like New York Times columnist Paul Krugman, to pop-art economists, pro-Business rebuttalists, and panicky editorial page writers of the Wall St. Journal—all acknowledge to one degree or another the growing inequality of incomes in the U.S.
From thoughtful analyses of shifting income shares by young academic-economists like Emmanuel Saez of the University of California, Berkeley, to focused commentary on the topic by media-economists, like New York Times columnist Paul Krugman, to pop-art economists, pro-Business rebuttalists, and panicky editorial page writers of the Wall St. Journal—all acknowledge to one degree or another the growing inequality of incomes in the U.S.
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Shifting Income to the Wealthiest 1%
Shifting Income to the Wealthiest 1%
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Income inequality in America today is not, as one might assume, about the upper 20% or even 10% wealthiest gaining at the expense of the rest. It is about the very rich, the extremely rich, the mega-rich gaining an ever-increasing relative share of national income while the middle, the working class, and the poor stagnate or decline in terms of their share of that income. It is about corporations and the wealthiest 1% households (the very rich), and even the top 0.1% (extremely rich) and 0.01% (mega rich), accruing for themselves a greater relative share of income at the expense of the rest and, in particular, at the expense of the lower 80% income groups in which fall virtually all the 90 million working class families and the government’s estimated 108 million non-supervisory workers in the U.S. workforce.
Income inequality in America today is not, as one might assume, about the upper 20% or even 10% wealthiest gaining at the expense of the rest. It is about the very rich, the extremely rich, the mega-rich gaining an ever-increasing relative share of national income while the middle, the working class, and the poor stagnate or decline in terms of their share of that income. It is about corporations and the wealthiest 1% households (the very rich), and even the top 0.1% (extremely rich) and 0.01% (mega rich), accruing for themselves a greater relative share of income at the expense of the rest and, in particular, at the expense of the lower 80% income groups in which fall virtually all the 90 million working class families and the government’s estimated 108 million non-supervisory workers in the U.S. workforce.
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There are approximately 114 million households in the U.S. today. The wealthiest 1% make up 1.4 million households. They now receive between 19%-21.5% of the annual Gross Domestic Product (GDP) of the United States, depending on the source cited. That’s up from 8% in 1980. Today’s 19%-21.5% also represents a nearly full recovery of the roughly 22% share of national income the top 1% received in 1928 just prior to the stock market crash of 1929, the depression of the 1930s, and the ‘Great Leveling’ of class incomes that followed. That same 1% today also hold more than 35% of all assets and wealth of the country—about $17 trillion. They own 51% of all stocks and 70% of all bonds, own homes worth $3 million and have a net worth of $6 million. The bottom 50% of all households, nearly 60 million families—all working class—in comparison own only 2.5% of the country’s total assets and wealth.
There are approximately 114 million households in the U.S. today. The wealthiest 1% make up 1.4 million households. They now receive between 19%-21.5% of the annual Gross Domestic Product (GDP) of the United States, depending on the source cited. That’s up from 8% in 1980. Today’s 19%-21.5% also represents a nearly full recovery of the roughly 22% share of national income the top 1% received in 1928 just prior to the stock market crash of 1929, the depression of the 1930s, and the ‘Great Leveling’ of class incomes that followed. That same 1% today also hold more than 35% of all assets and wealth of the country—about $17 trillion. They own 51% of all stocks and 70% of all bonds, own homes worth $3 million and have a net worth of $6 million. The bottom 50% of all households, nearly 60 million families—all working class—in comparison own only 2.5% of the country’s total assets and wealth.
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The 0.1% extremely rich, 140,000 households, did even better than the top 1% and the 0.01% mega-rich, only 14,000 households, did better than they, as data later in this article will illustrate. Despite the 2001 Bush recession and the dot.com stock bust earlier this decade, since 2000 the number of millionaires in the U.S. rose from 6 to 7.5 million (which excludes home asset values in the calculation), according to a 2006 report by the corporate research firm, the Boston Consulting Group. One hundred new billionaires were also created since 2001.
The 0.1% extremely rich, 140,000 households, did even better than the top 1% and the 0.01% mega-rich, only 14,000 households, did better than they, as data later in this article will illustrate. Despite the 2001 Bush recession and the dot.com stock bust earlier this decade, since 2000 the number of millionaires in the U.S. rose from 6 to 7.5 million (which excludes home asset values in the calculation), according to a 2006 report by the corporate research firm, the Boston Consulting Group. One hundred new billionaires were also created since 2001.
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Meanwhile real weekly earnings of 100 million workers are less today than in 1980 when Ronald Reagan took office—a virtual quarter century pay freeze! According to the U.S. Commerce Department the median (midpoint) households (where male workers earn about $41,000 a year and female workers $31,000 a year) have experienced a decline of 5.9% in income the past five years alone. Below the median, thirty-seven million workers and their families now live below the U.S. government’s official poverty level and sixteen million of them earn less than $9,800 for a family of four. Even workers above the median have done poorly. Except for a few years in the late 1990s, even college educated workers’ real wages have stagnated, growing less than a half of one percent a year from 1979 through 2005 and actually declining in 2004-05.
Meanwhile real weekly earnings of 100 million workers are less today than in 1980 when Ronald Reagan took office—a virtual quarter century pay freeze! According to the U.S. Commerce Department the median (midpoint) households (where male workers earn about $41,000 a year and female workers $31,000 a year) have experienced a decline of 5.9% in income the past five years alone. Below the median, thirty-seven million workers and their families now live below the U.S. government’s official poverty level and sixteen million of them earn less than $9,800 for a family of four. Even workers above the median have done poorly. Except for a few years in the late 1990s, even college educated workers’ real wages have stagnated, growing less than a half of one percent a year from 1979 through 2005 and actually declining in 2004-05.
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For the first time since the U.S. government began to collect the data in 1947, wages and salaries no longer constitute more than half of total national income. In contrast, corporate profits are at their highest levels since World War II, having risen double digits every quarter in the last three and a half years alone and 21.3% in the most recent year, 2005, according to Dow-Jones ‘Market Watch’. Corporate profit margins are higher than they have been in more than half a century, according to Merrill Lynch economist, David Rosenberg.
For the first time since the U.S. government began to collect the data in 1947, wages and salaries no longer constitute more than half of total national income. In contrast, corporate profits are at their highest levels since World War II, having risen double digits every quarter in the last three and a half years alone and 21.3% in the most recent year, 2005, according to Dow-Jones ‘Market Watch’. Corporate profit margins are higher than they have been in more than half a century, according to Merrill Lynch economist, David Rosenberg.
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After tax profits are now equal to 8.5% of the U.S. Gross Domestic Product—that’s more than a $ trillion dollars—and the highest since the end of World War II in 1945. A June 2006 report by the leading Investment Bank, Goldman Sachs, aptly summed it up: “The most important contribution to the higher profit margins over the past five years has been a decline in Labor’s share of national income.”
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It was once said by President John F. Kennedy in the early 1960s that “a rising (economic) tide lifts all boats”. But that was a different time. A different America. Today, under George W. Bush, we are told the economy has been booming. And indeed GDP, the stock market, corporate profits, and the incomes of the wealthy have been rising. But tens of millions of American families have been thrown overboard, left to tread water or drown, while the wealthiest passengers celebrate into the night in the ballrooms of the new Titanic economy in America.
It was once said by President John F. Kennedy in the early 1960s that “a rising (economic) tide lifts all boats”. But that was a different time. A different America. Today, under George W. Bush, we are told the economy has been booming. And indeed GDP, the stock market, corporate profits, and the incomes of the wealthy have been rising. But tens of millions of American families have been thrown overboard, left to tread water or drown, while the wealthiest passengers celebrate into the night in the ballrooms of the new Titanic economy in America.
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The $1.09 Trillion Low-End Estimate
The $1.09 Trillion Low-End Estimate
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The most telling statistic of what it all means comes from the U.S. Department of Commerce. It states that wages and salaries as of April 2006 constituted only 45.3% of GDP, a decline from 50.0% in 2001 and 53.6% in 1970. Furthermore, as the U.S. government itself estimates, “each percentage point now equals about $132 billion”!
The most telling statistic of what it all means comes from the U.S. Department of Commerce. It states that wages and salaries as of April 2006 constituted only 45.3% of GDP, a decline from 50.0% in 2001 and 53.6% in 1970. Furthermore, as the U.S. government itself estimates, “each percentage point now equals about $132 billion”!
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In other words, the roughly 8.3% drop (53.6-45.3) in labor’s share by 2005 represents an annual shift in relative income today of about $1.09 trillion. That’s $1.09 trillion that now occurs every year, and is rising!
In other words, the roughly 8.3% drop (53.6-45.3) in labor’s share by 2005 represents an annual shift in relative income today of about $1.09 trillion. That’s $1.09 trillion that now occurs every year, and is rising!
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That $1.09 trillion shift is equivalent to every one of 108 million non-supervisory workers in the U.S. today writing out a check each year, every year, for $12,100 and signing it over to the other 24 million upper-class households—about 40% of which would go to the wealthiest 1.4 million families.
That $1.09 trillion shift is equivalent to every one of 108 million non-supervisory workers in the U.S. today writing out a check each year, every year, for $12,100 and signing it over to the other 24 million upper-class households—about 40% of which would go to the wealthiest 1.4 million families.
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And not yet included in the $1.09 trillion annual figure are additional income transfers from labor to corporations as a consequence of employers shifting a greater share of the costs of health care to their workers in recent years; the destruction and only partial payouts to workers from the discontinuing of tens of thousands of defined benefit pension plans since the 1980s; and the transfer of hundreds of billions more every year in workers’ payroll tax payments (i.e. deferred wages) from the Social Security Trust fund to the U.S. general budget since the 1980s.
And not yet included in the $1.09 trillion annual figure are additional income transfers from labor to corporations as a consequence of employers shifting a greater share of the costs of health care to their workers in recent years; the destruction and only partial payouts to workers from the discontinuing of tens of thousands of defined benefit pension plans since the 1980s; and the transfer of hundreds of billions more every year in workers’ payroll tax payments (i.e. deferred wages) from the Social Security Trust fund to the U.S. general budget since the 1980s.
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It is not surprising that the more prescient defenders of the status quo today see the looming potential threat in this situation. Janet Yellen, President of the San Francisco district of the Federal Reserve Board, recently pointed out the growing inequality may well lead to resistance to globalization (read: free trade and U.S. foreign direct investment), affect social cohesion, “and could ultimately undermine democracy’. In a somewhat less direct terms, the new Secretary of the U.S. Treasury, Henry Paulson, an ex-Goldman Sachs Investment Bank CEO transferred to the Bush economic team last summer, has raised similar concerns.
It is not surprising that the more prescient defenders of the status quo today see the looming potential threat in this situation. Janet Yellen, President of the San Francisco district of the Federal Reserve Board, recently pointed out the growing inequality may well lead to resistance to globalization (read: free trade and U.S. foreign direct investment), affect social cohesion, “and could ultimately undermine democracy’. In a somewhat less direct terms, the new Secretary of the U.S. Treasury, Henry Paulson, an ex-Goldman Sachs Investment Bank CEO transferred to the Bush economic team last summer, has raised similar concerns.
Recently some politicians have also begun to pick up on the theme of growing inequality, sensing as they campaigned in November’s Congressional elections the growing popular discontent of millions who hear every day from Bush & company how great the economy is doing, but know they are personally losing economic ground. As the newly elected Democratic Senator from Virginia, James Webb, no liberal by any means, put it in a recent editorial, “wages and salaries are at all-time lows as a percentage of the national wealth” and “America’s top tier has grown infinitely richer the past 25 years…The tax codes protect them, just as they protect corporate America, through a vast system of loopholes.”
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Meanwhile, Fox News pundits squeal ‘class war, you’re talking class war’ at such comments—as if that wasn’t exactly what has been happening economically now for more than a quarter century to tens of millions of American workers and their families.
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The Limitations of Government Data
The Limitations of Government Data
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Debate and discussion on income inequality in America today almost always refer to one or more of four U.S. government data sources. Given the undeniable magnitude of the income gap, all show evidence of its existence and growth. However, for different reasons all the four sources seriously underestimate that gap with the result that official estimates of income inequality in the U.S. are even more grossly understated. The gap is even worse, much worse, than it is reported.
Debate and discussion on income inequality in America today almost always refer to one or more of four U.S. government data sources. Given the undeniable magnitude of the income gap, all show evidence of its existence and growth. However, for different reasons all the four sources seriously underestimate that gap with the result that official estimates of income inequality in the U.S. are even more grossly understated. The gap is even worse, much worse, than it is reported.
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The four sources are the U.S. Census Bureau, the Congressional Budget Office, and the Federal Reserve Board and the Department of Labor surveys. Except for one source, the Congressional Budget Office (CBO), all conveniently do not estimate the income of the wealthiest 1% households separately but lump them into broader groups with the result that the extreme concentration now occurring at the very top of the income scale is blurred and lost in a set of much larger numbers. The Department of Labor goes so far as to define the “rich” as the top third (33%) of households with annual income levels of only $70,000 a year. With that logic, Bill Gates and your average dockworker are considered no different in terms of income.
The four sources are the U.S. Census Bureau, the Congressional Budget Office, and the Federal Reserve Board and the Department of Labor surveys. Except for one source, the Congressional Budget Office (CBO), all conveniently do not estimate the income of the wealthiest 1% households separately but lump them into broader groups with the result that the extreme concentration now occurring at the very top of the income scale is blurred and lost in a set of much larger numbers. The Department of Labor goes so far as to define the “rich” as the top third (33%) of households with annual income levels of only $70,000 a year. With that logic, Bill Gates and your average dockworker are considered no different in terms of income.
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A major failing of two of the survey sources, Federal Reserve and Department of Labor, is that they are based on interview surveys of the very rich and extremely rich (the mega-rich of billionaires and their near-cousins are never bothered with such government survey requests). Government representatives either call or visit in home with the wealthy and ask them to reveal their most private financial situation. Why the super-rich would be inclined to thus reveal the details of their finances to government interviewers—after manipulating tax shelters and the like as most do and paying numerous lawyers and high-priced accountants large fees to hide their income—is an interesting and grossly naive assumption.
A major failing of two of the survey sources, Federal Reserve and Department of Labor, is that they are based on interview surveys of the very rich and extremely rich (the mega-rich of billionaires and their near-cousins are never bothered with such government survey requests). Government representatives either call or visit in home with the wealthy and ask them to reveal their most private financial situation. Why the super-rich would be inclined to thus reveal the details of their finances to government interviewers—after manipulating tax shelters and the like as most do and paying numerous lawyers and high-priced accountants large fees to hide their income—is an interesting and grossly naive assumption.
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