Wednesday, March 02, 2005

March 1, 2005

Ownership What?

I’m going to give you an example of how this White House gets away with making pronouncements that are provably untrue. You know, like “Social Security is going broke,” and “Saddam had an active nuclear program,” or “Global warming has not been proven.”

I am going to tell you two things. And, while one will cancel out the other, one will prevail over the other:

1) George Bush wants to create an ownership society in which ordinary Americans own their home, stocks and bonds and retire with secure retirement savings.
2) During the last decade the income gap between average Americans and the wealthy widened. During the 1990’s average American’s wages grew by only 4% while the wealthy saw their income jump by 24%.

The second fact was part of a story today in my local paper written by one of the most meticulous journalists I know, Mary Fricker. (Mary was a co-author of Inside Job: The Looting of America’s Savings and Loans along with me and Paul Muolo.)

The study compares the bottom and top one-fifth of the county's estimated 100,000 working families, ranked by average income and adjusted for inflation. In Sonoma County, the average income for these groups in 1999 was $24,000 and $180,000, respectively. (Press Democrat)

What Mary Fricker reported in today’s Santa Rosa Press Democrat, is not unique to our semi-rural Northern California community. It is happening across America. As outsourcing strips America of its once good paying blue collar jobs the men and women who once were able to make a solid living off that work have been forced into low-paying service industry work or to take Wal-Marty type retail jobs.

Mary’s piece drove this point home by checking the same wage comparisons for the previous decade. She discovered that during the 1980s wages for both the wealthy and average Americans grew as almost precisely the same amount, about 24%.

Now, back to George Bush’s Ownership Society and why he gets away with it. Mary’s story, and those like it, will appear for a day then disappear from the news and the public’s mind. But George W. Bush will repeat his “ownership society,” nonsequtor continuously.

That’s how it works. That’s why a lie repeated often enough can trump truth. That’s how George Bush and Karl Rove succeed.

Here’s the problem. It’s simple math. Nothing complicated. If worker’s wages grew by only 4% during the 1990’s when inflation averaged 3% a year, what that means is that workers real wages— and spending power -- actually shrank by 27%.

This would appear to create a big problem for George because ownership generally requires that someone first be able to buy things, like a home. But, with real wages dropping by a quarter and home prices during the same time increasing by over 100%, just how are average workers going to be able to manage that?

The White House press corps could help here, if they only would. From now on every single time George Bush leans out from the podium with that “Listen up. I’m- about-to say-something-really-smart,” smirk on his face, and tells them how he wants to build an “ownership society,” reporters should demand that he reconcile that vision with falling real wages. How George? How do they buy things without money? (After all, not everyone is a member of the Bush clan.)

And, reporters should ask that question every single time Bush utters the words “Ownership Society.” And keep asking until the White House can provide numbers that don’t cause Excel to crash.

Then reporters need to also probe the President’s position on immigration. Bush wants to let more Mexican workers into the country to work in low-wage jobs. That will increase the number of workers vying for those jobs. Capitalism hardwires the value of everything to available supply, the more of something there is the less it’s worth. Therefore the more workers there are vying for available work, the lower wages will be driven.

Bush claims that these guest workers will only take jobs Americans don’t want. There is some truth in that, but it has little to do with the type of work, but rather the low wages and crappy working conditions. If the minimum wage were raised to a livable wage and indexed regionally to the cost of living, Americans would take many of those jobs.

But conservatives refuse to raise the minimum wage because their constituents want cheap labor, and they don’t care where it comes from. And, if they don’t get it here they will move operations to a country that will provide cheap, compliant workers.

But here again we have a problem. American consumers provide the bulk of the fuel for the world’s mercantile machine. That fuel supply has been shrinking. And it cannot be replace by the wealthy, even though they now have an excess of fuel. Even Bill Gates can only watch so many wide-screen TV’s, drive so many cars and take so many vacations before his shopping itch has been well scratched. It took a village to raise the kind of robust economy we had in the 1960s.

So, just who is going to pull the wagon for producers of consumer goods now? Who is going to realize George Bush’s grand vision of an Ownership Society? Ownership takes moola George, and you and your supporters are dead set against giving enough of it to the very people who would be owners, if they could. Am I missing something here?

I am not losing any sleep over whether George will not live to see his Ownership Society. But I am deeply concerned about where the widening wealth gap between top 1 percent of Americans and the rest of us is leading. Logic tells you it can lead only one place -- back to a country where a few realize all their dreams and more while everyone else struggles month to month just trying to own the bare essentials of life.

Maybe that’s what George means by Ownership. Anyway, that’s what we’re going to get unless the wage gap starts to close, and fast.

By Stephen Pizzo
Raconteur at Large

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