If you look at the figures, you will find out that inequality in America is now approaching the level of the 1920s, before all social reforms were conducted. Even though the productivity of an average American worker has risen since 1973 by about 50%, most wages, even those of well-educated Americans, either were not increased or increased to a negligible extent since this date.
A good guide for the understanding why it has happened is the book by Paul Krugman “The Conscience of a Liberal”. In his research of the past eighty years of American history he investigates the social, political and economic reasons for this recent inequality.
Starting his research with New Deal years, Krugman comes to the conclusion that the Golden Age of the American history, marked by the emergence of a strong middle class, was above all the result of strong unions, high taxes and a policy of wage dumping.
At the beginning of the 80s however a new political movement opposing this kind of strong state policy began to form. Initial supporters of the movement were mostly the representatives of small and medium sized enterprises. As the biggest part of welfare performance in post-war America was generated not by the state but by the private actors, they sought to disburden themselves from the unions. After the industry and population centre shifted to the South and West, they tried to ensure that unions would not follow this route.
Over the years, the movement became highly ideological and firmly settled down among Republicans. The maxims they tried to defend were religion, the fight against communism during the cold war and of course, the interests of business. The culmination of this movement’s successes were the ruling years of George W. Bush. During his incumbency one of the most adamant opposers of a strong government, Grover Norquist, managed to cut taxes to an unprecedented level. Another ultra conservative Republican, Rick Santorium, responsible for the recruitment policy succeeded to flood the whole Washington lobby with those who were extremely loyal to the Republican Party.
Paul Krugman argues that the recent inequality situation in the US is, first of all, the result of this movement members’ activities and not of globalisation, immigration or technological change as many people claim. He points out that the last three hypotheses cannot explain why inequality in the USA is much higher than in any other developed country or also why salaries of those with good college degrees have stagnated.
Krugman offers two answers to the question why voters did not opt out Republicans. For one thing, Republicans change topics during the campaigns. Even though their first bills after victory were about business, during the election campaign of 2004 they made national defence and weapons of mass destruction the main issue of discussion. Furthermore, they are the masters of “dog whistle politics”. This means, they use language which some particular groups in society may interpret differently. For example, many of George W. Bush's speeches are quite appealing to religious extremists and are just a little bit overblown for a regular American.
At the end of the book, Krugman makes several positive and rather future-oriented statements. He claims that the period of conservative dominance is over and brings forward two arguments why it is so. First of all, he refers to the “mechanical” change which American society recently experienced. Because of high immigration rates every fifth American is now not “white”. How it is politically significant is exemplified in Florida. During the Reagan incumbency, this was a typical conservative state. But after the structure of the population changed because of growth of Hispanic immigrants, Florida became a progressive, liberal state. Secondly, as Krugman states “Americans are just better now”. The political orientation and expectations of the voters have changed
Health care reform would be a good way to start.
Natalia Ruban is an intern at the Atlantic Community and a graduate student of Political Science at the Free University of Berlin.
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June 22, 2008
ilyas m mohsin, ppp, Platinum Contributor (250)
As private/ personal interests dominate the capitalistic system at a large scale in the US, social/ economic equality tends to become a euphemism. Compare the US of today with the one of 1950s and you find out what a colossal change has taken place in concepts/ reality, Paul' theory of liberal voters' conversion notwithstanding.
President Eisenhower had warned of the spreading power of "Military Industrial Complex" in 1960.and today this entity exerts major influence on US policy etc. As money makes the mare go, and given the naivette of the Americans, generally, the voters are sold versions which suit such 'special interests'.
Nehru wirtes in his book 'The discovery of India' that he once met an
American journalist and the former asked the latter about US democracy. The journalist told him that the bottomline of their democracy was that rich kept on supporting the poor to an extent so that the latter do not kill the former out of desperation. Seems a good comment shorn of philosophic paradigms concerning liberals, Conservatives and then neocons too!