Fiscal Restraint: An Excuse for Social Injustice

A nation does not need a king or dictator for it to be out of step with the population’s needs.  An insensitive, selfish, capitalistic republic can also provide all the necessary fodder for a nation’s breakdown.

Capitalism is a wonderful, liberating ideology, but its dark side can be just as destructive as any oligarchy hell-bent on taking all the spoils for those at the top of the financial and ruling pyramid.  The United States is losing its middle class due to the winner-take-all philosophy of capitalism, and this economic stratification is causing social unrest that could bring the entire American experience to a crashing halt.

Nicholas Carroll wrote an article that gives some historical perspective to the dwindling middle class.  It seems that when Henry Ford elevated the middle class worker from his previous position of being exploited by the producer class, simply by raising the worker’s salary to a reasonable level, the high-end earners were appalled and very scared that this new distribution of wealth would end their lucky run.  Then with the advent of unions, more fear was injected into the national debate on whether or not this advance of the new middle class would end our democratic republic and lead to a socialistic society.

This is exactly what is happening across our land today —- in Wisconsin, Indiana, Ohio —- with one huge difference: America, the nation and its states, are broke today.  There is good reason to decrease the pension benefits, employers’ health care contributions and other public funding of personal benefits.  In fact, the teachers and other civil workers in Wisconsin acknowledge the need for the state to cut back on entitlements.  The fly in the ointment, however, is that elections have consequences.  The Wisconsin governor, who was elected with 52% of the vote and quite transparent from the get-go about his intentions, has attached to his proposed legislation the removal of any and all collective bargaining rights for these workers.  This was an affront to and a bastardization of all the underlying history and principles of workers’ rights.  In fact, the protesting workers have agreed to contribute more to their own pensions and health care, but they refuse to give up the more basic right of collective bargaining.   They are correct: to forfeit material advantages is one thing, but to give up an elemental, essential ingredient of their American citizenship is a step that crosses the line and denies them part of their intrinsic worth as Americans.

Here is an interesting article on how the middle class became the underclass.  Times are tough now; our constant borrowing and spending has placed this country on the edge of financial insolvency.  It is time to decrease benefits and tighten our belts.  However, the assault by the haves on the have-nots is despicable.  Consider the following examples of government and financial hypocrisy.  Our members of Congress receive pensions, regardless of how many years they served in the halls of government, equal to their highest salaries for the rest of their lives!  I cannot get my brain around this rule.  If our government kingpins are so eager to eliminate wasteful spending, perhaps they should set the example by structuring their retirement funds based on actual time served within our current framework of a bankrupt economy.  Furthermore, what other public entity gives a whole week off, paid, for our national celebration of President’s Day?  Our Congress receives the entire week off.   Can you imagine the outcry by our elected officials if other government or civil employees received an entire week off, with full pay, for a one-day holiday?  For Heaven’s sakes, why don’t our federal lawmakers set the proper example?  How can they expect Americans to sacrifice in these hard times when their leaders have no such intentions?

My second example of the dark side of capitalism and corrupt government is the general rule that retirement accounts can be borrowed against.  The public sector and the private sector are equally guilty of downright irresponsible and fraudulent practices:  from our national program of Social Security to public pension plans to huge corporate retirement programs to small business 401K plans to individual IRA accounts, too many of them are bankrupt.  When will common sense rule the day?  These funds should not be available for borrowing against, as unsound fiscal policy will never recoup enough to make these funds whole again.  No one, not a government, not a state, not a union, not a corporation and not any individual should be allowed to raid their retirement fund for present uses.  That is precisely why they are named “retirement” accounts.

My third example of this economic inequality is that any entity, i.e. a government, a business concern or an individual, that is truly concerned with fiscal responsibility, must increase revenues while making cuts.  It is a travesty that the top earners are still receiving tax cuts in this time of economic distress.  The wealthy believe that in order for an economy to flourish and be stimulated, it is essential for the top earners to pay less taxes.  How self-serving is that?  Trickle-down policy never worked and will not solve our problems today.  A plus B equals C.  Money in, money out.  Plain and simple.  Along with making deep and stark cuts, America must raise its revenues.  Period.

So of course social unrest will follow on the heels of this unequal distribution of power and wealth.  Paul Krugman wrote about how the events in the Midwest are more a battle of power than money.  Why shouldn’t the middle class be enraged over current policy?  The wealthy get to keep a larger share of their earnings while the middle class suffers from the budget cuts.  Yes.  Our great, democratic country is just as corrupt as any monarchy is in funneling the riches of the nation, mostly made on the backs of the working class, to the wealthy and powerful.  This issue is certainly about power.  Do not let anyone tell you anything different.

Finally, America has just about reached its day of reckoning regarding their spendthrift ways.  However, everyone is going to have to sacrifice.  It is not acceptable for our Congressmen to bestow upon themselves huge pensions, based on their maximum earnings, for life, regardless of their tenure, in one breath and then in their next breath, cry poverty as the basis for slashing the pensions of public workers all the while attaching the removal of basic workers’ rights to those fiscal policies.  It is hypocrisy of the highest order and it understandably infuriates the middle class.  Not only is the middle class being subjected to a decrease in material benefits, but they are also being punished by having their rights to future negotiations rescinded.  This is the power play to which Krugman speaks.

Capitalism is an amazing philosophy.  The free-market system is at the heart of our country’s success and prosperity.  At its best, capitalism allows equal opportunity to all who are seeking a better life.  However, when its principles are misused, corrupted and tailored to favor the haves at the expense of the have-nots, it is a destructive tool that can spread mayhem and havoc to our social structure.

Michael Gerson wrote about this divisive, unfair process taking place in Wisconsin, a microcosm for the nation as a whole.  Yes, everyone needs to tighten their belts.  However, the coupling of fiscal restraints with the denial of individual rights is so much more than economic policy.  The repercussions are spilling over into the lines of social policy and a class war is on the horizon.   Our dire economic situation cannot be used as a means to rein in our citizen’s rights.  This would permit our goal of balancing the budget to be an excuse to violate individual rights.

What you see is what you will get: an explosive social reaction to unjust fiscal policy cannot be disguised as budgetary issues any longer.  Nothing short of an acknowledgement of this convoluted fiscal/social process is necessary, with the appropriate structural changes instituted across all levels of government and economic worth.  If capitalism is really going to work, we need to clean it up.  If we don’t, America’s brand of capitalism is no better than any other empty ism in this world.


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