Jerry Landay
January 19, 2006

The meltdown of the middle class

Here's one of the net outcomes of the radical-right agitprop machine:

There's bankruptcy and there's bankruptcy. We learn that in 2005, more than two million Americans filed for bankruptcy -- one in every 53 American households -- many having fallen prey to excessive medical costs, and/or maxed out on their credit cards. It's the highest number of bankruptcies on record. It coincided with Congressional passage of legislation misleadingly labeled The Bankruptcy Abuse Prevention and Consumer Protection Law. Some protection. Simon Legree would love it. The law toughens the ground rules for declaring bankruptcy, as well as hoisting the bar to get out of it. Now, many Americans may never escape the clutches of indebtedness. We may yet re-establish the Dickensian poorhouse, where debtors can spend cold days breaking rocks while their mates and offspring shiver inside.

Some 400 senior executives of the UAL Corporation, the parent company of United Airlines, will divide among themselves 10 million shares of company stock -- or eight percent of the total shares the company plans to issue when it comes out of bankruptcy. This, after the working stiffs voluntarily took pay cuts and gave up other perks to help salvage the outfit. It's much the same with senior executives at the Delphi Corporation, who have given themselves generous rewards for mismanaging the company into bankruptcy. As Gretchen Morganstern points out in the New York Times, "outsized pay at troubled companies is a disturbing new trend."

It's a subset of a much larger trend in which the gulf between the privileged management class and the rest of us grows wider and wider, in which a new corporate aristocracy will preside over ever more impoverished proles, a destructive socioeconomic process in which the middle class merges into the underclass. You can define the middle class by what it earns -- somewhere, say, between $45,000 and $95,000 a year. More importantly, you can define it by what it stands for. The middle class has been the architect and maintainer of a healthy democracy -- well educated, informed, aware. It works hard, the living symbol of upward mobility, a place you can always reach if you try. Out of the great middle class came the potent activist concern for equal opportunity, the defense of the poor and needy, and enlightened justice.

But the middle class in America is eroding as the national wealth is shifted upward. It's getting tougher to hold onto jobs headed overseas, to afford suitable housing, to meet escalating bills for energy, medical care, education, food and transportation. Peter Gosselin, the stellar economics writer for the Los Angeles Times, reported in December on the way the Bush administration and its friends are approaching the rebuilding of New Orleans -- turning reconstruction increasingly over to the private sector, letting the strong win and the weak lose. "The situation in which residents find themselves is an extreme example of a trend underway for a quarter-century," Gosselin writes, "a shift of economic risk from business and government to working families, and an increasing reliance on free markets to manage society's problems."

When powerful people become fearful, the easy way out is to wrap themselves in the sacred dogma of "me." The formula eases stomach cramps and relieves brain strain. That describes members of the Church of Latter-Day American business. "We're the chosen; Heaven-sent capitalism made us successful. Why can't you folks do the same as I did?" Their absence of empathy is as stunning as their sociopathic abandonment of any responsibility to their society.

And so, we see the "real men" in company after company, and their servants in Washington, declaring -- "The public interest be damned." We witness them slashing wages -- boff! Abandoning defined-benefit pensions -- wham! Slashing pledged medical benefits for their retirees -- bam! Walking away from unemployment benefits --- biff! Shipping off American jobs to China and Malaysia -- bang! Moving whole operations to India -- whop! Doing their best to wipe out what's left of the trade unions by labeling them regressive -- whiff! They are skimming what's left of the cream off the top while their country is increasingly laid waste.

The game of Darwinian economics -- "I'm okay, Jack, let the unfit and unlucky perish" -- and the enshrinement of market-miracle theology is really the systematic looting, Abramoff-and-Enron-style, of the pockets and purses of the middle class. It is preventing government from doing what it does best -- operating at a scale that is beyond the capability of lone individuals. It is the soiling of their American nest. Peter Gosselin quotes Louisiana Congressman Richard Baker, who puts his finger on the fatal fallacy of market theology: "It does no good to stand up, just one person or family, because there's nothing left where they once lived -- no schools or grocery stores, doctors or banks, police stations or fire trucks. We've got to go into the business of restoring whole communities."

It doesn't take either a political scientist or a rocket scientist to see where this once-great nation -- and the great middle class that built it -- are headed. Harvard Professor Elizabeth Warren aptly sums it up: she calls it a game of feast and famine -- "starving the shareholders and creditors while the management grows fat on big salaries." If the middle class goes, America goes.

Jerry M. Landay of Bristol, Rhode Island has written for Mediatransparency on the right-radical agitprop machine. He is a former CBS News correspondent and journalism professor.