Is Obama Provoking Class Warfare?

Republicans are attacking Obama’s project as a model that reincorporates class warfare in the debate over the president’s economic rescue plan.

Before, they spoke of the problems of “racial tensions,” but the U.S. citizens proved that conflict baseless and henceforth irrelevant by their vote in the last presidential election. The real issue at hand, as evident in the president’s impressive document (A New Era of Responsibility: Renewing America’s Promise, Office of Management and Budget, 135 pages), is the ratification of what I have repeatedly expressed, again and again, in this column: For every developed country, the past decade has proved disastrous for the wage earner and has witnessed an extreme concentration – or expropriation – of income in a small minority.

The previously cited document from the White House does not ignore this very harsh reality. The title on page nine gives it away: “Accumulating wealth and closing doors to the middle class.” U.S. society was designed to form and develop a great middle class. The report denounces the dismantling of said model: “…the Nation’s top 400 taxpayers made more than $263 million on average in 2006, but paid income taxes at the lowest rate in the 15 years in which these data have been reported. In constant dollars, the average income of the top 400 taxpayers nearly quadrupled since 1992” (page 9). However, it does not stop there.

Furthermore, it adds, “It’s no surprise, then, that wealth began to be ever more concentrated at the top. By 2004, the wealthiest 10 percent of households held 70 percent of total wealth, and the combined net worth of the top 1 percent of families was larger than that of the bottom 90 percent. In fact, the top 1 percent took home more than 22 percent of total national income, up from 10 percent in 1980…” That explains the enormous decline of the role of wages (which in Mexico is barely 30 percent of the GDP) in the U.S.’s GDP.

“There is nothing wrong with people succeeding and making money. But there is something wrong when the opportunity for all Americans to get ahead, to enter the middle class, and to create a better life for their children becomes more and more elusive… Between 2000 and 2007, median income among households headed by those under 65 fell by $1,951. To keep up, more and more Americans have turned to credit and debt: by 2007, household debt as a percentage of disposable personal income was 133.7 percent. And some Americans have not been able to keep up, falling out of the middle class and into poverty. From 2000 to 2007, the number of Americans living in poverty increased by nearly 5.7 million, and 1.7 more children lived in poverty in 2007 than in 2000. In fact, 18 percent of children, about 13 million in total, lived in poverty in 2007” (page 8).

Class warfare? “These problems then were made worse by policies that benefited those at the top at the expense of almost all Americans…”

The readers of this column know that I have repeated over and over that in the last decade, the concentration of income in developed countries has led to an immense expropriation of earnings (those of wages in societies mostly composed of new middle classes). Additionally, the mechanism of corruption converted these groups into debtors as a result of a model that destroyed savings and instead praised credit and consumption.

This process paralyzed development (humanity’s historic advancement from one economic level to another) and destroyed the ethic foundations of coexistence, also giving rise to the failure of the ruling class and the most powerful bankers, who escaped their priorities in avid stupidity. The president defines it as “ignoring our long-term challenges.” The reading has made an impact on me and I pass it on as a harsh and necessary analysis.