First, you and I elected every one of the members of Congress and all the presidents who marshaled in the era of unchecked capitalism. Beginning with the Reagan Revolution in 1980, and ending, well it hasn't really ended yet if you look at how many Wall Streeters have been appointed to key economic and political offices by President Obama. Did anyone with an IQ of more than two digits really believe that fundamental change would result from the political campaigns of Barack Obama and John McCain, which amassed over 1.5 billion dollars to buy our votes? All the real reformers were choked to death by the big money boys early in the primary season and we all just sat back and watched. And what, now we are shocked by the outcome? Bigger than ever Wall Street bonuses, huge profits for investment bankers, and no financial reforms of any kind. Representative democracy does not work if the electorate allows its votes to be purchased by the biggest spender. Oh yeah, in case you haven't noticed, those same toadies of Wall Street bought themselves the Supreme Court too. With a 5-4 deregulation majority now firmly in charge, we got to witness the transformation of corporations into real people with full constitutional rights. Which isn't even close to an earlier decision by the same court that determined that money and speech were the same thing, and therefore equally protected by the First Amendment.
Ah, but today's rant is not just another populist diatribe against American economic elites. For you and I are not just politically complicit in the mess we now find ourselves in, but we own a great deal of the economic blame too. Now before you think I have drunk the Libertarian Kool Aid, let me explain. In 1973, the year we suffered through OPEC choking off the supply of gasoline to the United States, and while we were watching the televised Congressional Watergate hearings, something very important began to happen to middle class America. That was the year that our real income stopped growing. From that year, right up to today, the value of our wages and salaries has not increased. . . at all. Oh yeah, that was also the last year that top corporate salaries and bonuses averaged from ten to twenty times higher than ours. Today, while we have not seen any real economic growth in our families, the moguls of Wall Street now make hundreds of times our annual pay. Can anyone say billionaire?
From 1945 to 1973, thanks to a combination of industrial, rather than financial growth, robust government regulations, a real graduated income tax system, the collective bargaining power of organized labor, and a willingness on the part of the American people to pay their way, we all got wealthier. So what the heck happened? Beyond neglecting our basic constitutional duties to both send qualified representatives into government, and then monitoring their behavior while in office, we began to substitute personal debt for real income. One can make a pretty good argument that American consumers would have paid more attention to the stagnation of the middle class, at the hands of the latter day robber barons on Wall Street, had we not been able to convert our homes into ATM machines. But every time we re-financed our mortgages, or took out a second to buy a boat, a car, or that custom pool in the back yard, a personal choice was made to assume more debt. No matter how enticing the combination of Wall Street and Madison Avenue made things look, in the end we all were to blame for the great housing bubble. To put it simply, there would have been no bundled mortgage securities and no credit default swaps if we had been more prudent and less greedy.
But once the bubble burst, the latter day populists, like the Tea Partiers, began to build their constituencies by blaming the evil triumvirate of Big Banks, Wall Street and Washington. The economic conspiracy theory goes as follows: Americans were tricked into buying sub-prime loans to get into homes they could not afford. Then, they were wooed by consumer advertisements to chase a standard of living they could not afford. At best, this is about a half truth. To be sure, predatory lenders were out there and they were aggressively marketing their voodoo lending packages. But it was always our choice to assume any unwise risk. All the truth in lending laws mean nothing if consumers were so desperate to buy into a materialistic version of the "Good Life," that they did not read the contracts they were about to sign. Certainly, shame on the banks and our political leaders for creating this mess, but shame too on us for blindly going along like so many brainless lemmings.
Imagine where we might be today if we hadn't borrowed to sustain our life styles, but only spent what we were making. Do you think that we would have stood idly by while a few of us amassed trillions of dollars in speculative wealth? By 1980 we would have seen that we were actually falling behind economically and the rush to deregulate the financial industry might instead have been a rush to more fairly distribute the great wealth of our country. Meanwhile the fat cats are laughing all the way to their "too big to fail" bank. For while our wages went down over the last forty years, our economic productivity went up. So let me see. . . if I was actually making less, but I was ever more productive, then where did all that wealth go that I created? See, I knew you would get it.
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