Thursday, February 13, 2014

Going, Going, Gone: American Exceptionalism

American exceptionalism is what the political scientist Seymour Martin Lipset called "the first new nation"—a country that developed a uniquely American ideology called "Americanism"—based on liberty, egalitarianism, individualism, republicanism, populism and laissez-faire.

However, many people argue that the United States has retained the European-class inequities, race-based inequalities, imperialism and war.

Some say American exceptionalism is gone.

Having the mightiest and most powerful military that the world has ever seen, doesn't make America exceptional. An ever expanding middle-class, equal opportunity for all, fairness in the political process and worker's rights was what had also made America exceptional since World War II—when the rising tide of capitalism once lifted all boats. Now it just lifts the biggest yachts.

What had once made America exceptional, has seen that beacon of light extinguished by corporate greed—as we've witnessed since the 1970s—since the long decline of the middle-class, stagnant wages, the war on labor unions and the ever-increasing money in politics that's been corrupting the political process and limiting our representation in democracy.

Over the past 40 years the meaning of "American Exceptionalism" has since changed.

Now we have (once again) record inequality, not seen since the Roaring Twenties—with 50% of all wage earners taking home less than $28,000 a year, a decline in unionization (peaking in 1979), poverty at 16%, and over 40 million Americans out of work. A Government Accountability Office report said there were about 42.6 million "contingent workers" — meaning temporary workers (temps), direct-hire temps, on-call workers, day laborers, contract company workers, independent contractors, self-employed workers, and standard part-time workers.

There is nothing "exceptional" about that. Where are all the full-time jobs that paid a living wage, offered healthcare, paid vacations and sick days? America is not making progress, we're regressing. A recent Rasmussen poll notes that 63% of voters now think the country is headed down the wrong track.

Corporations have been making records profits and CEOs have been raking in multi-million-dollar salaries, year after year, with little of the rewards for all the increases in productivity trickling down to the 99% for the past 40 years.

America isn't the richest country in the world, only 0.01% of it's citizens are the richest in the world. Most Americans don't live in an "exceptional" country, only 0.01% of its citizens enjoy America's "exceptionalism". Just to say that living in America might be better than most other countries, doesn't make her "exceptional"—not without fairness and justice for all. Not without more egalitarianism.

New Jersey Governor Chris Christie, recently asked: "You want income equality? That’s mediocrity. I don’t think the American people want income equality. What they want is income opportunity." (Empty words.)

While discussing Christie's comments on a Fox News segment today, one pundit quiped [paraphrased]: "If the man on the street is making $50,000 a year and someone else is making $5 million, what's the problem? It would be a pretty boring country if we all drove the same car...we'd be a mediocre country."

Are these people really so out of touch with reality? That's just the point: If most people earned $50,000 a year, there wouldn't be a problem. The problem is, 77% of all wage earners earn less than $50,000 a year—and 40% earn less than $20,000 a year, while some CEOs aren't just making $5 million a year, there raking in over $96 million a year in salaries. (The AFL-CIO's top 100 list is here.)

And if you count those who are cashing in on investment income, we're talking billions:

  • Mark Zuckerberg profited nearly $2.3 billion on his share options when Facebook went public
  • Richard Kinder received just $1 in wages but more than $1.1 billion in restricted stock profits.
  • Mel Karmazin (Sirius XM Radio) had share options worth $244 million.

And it's true—they all pay a lower tax rate than Warren Buffett's secretary (or the man on the street). Someone with an income of over $36,250 a year (or more) is taxed at least 25% — and pays Social Security taxes on income up to $113,700. While the aforementioned upper-income earners only pays a 23.8% tax on capital gains and pays no Social Security tax at all on capital gains. So why does the media consistently ignore this fact? (Read Taxes: How Congress Lets the Rich Pay Less).

Somewhere along the way—since the 1970s maybe—our political and corporate leaders have lost their moral compass. There are very few real patriots in the halls of Congress or in the corporate boardrooms these days (some are no only tax dodgers, but they are draft dodgers as well). American workers (the people that gave them their power and created their wealth) have been squeezed to the point where they are barely holding on anymore—even with multiple household incomes and/or government subsidies, they can barely sustain themselves any longer.

Rather than give their employees a small raise, the big corporations have been spending billions of dollars buying out their supposed "competitors" (Comcast to buy Time Warner Cable for $45.2 billion).

And earlier, Verizon bought out Vodafone's 45% interest in Verizon Wireless for $130 billion. Here are a few more examples:

  • AOL acquires Time Warner, 2000, $186.2 billion.
  • Time Warner bought AOL for $164 billion, renamed AOL Time Warner
  • Pfizer acquires Warner-Lambert, 1999, $87.3 billion.
  • AT&T acquires BellSouth, 2006, $83.1 billion.
  • Exxon acquires Mobil, 1998, $80.3 billion.
  • Comcast acquires AT&T Broadband, 2001, $76.1 billion.
  • Bell Atlantic acquires GTE, 1998, $71.1 billion.
  • Citicorp merges with Travelers Group, 1998, $69.9 billion.
  • SBC Communications acquires Ameritech, 1998, $68.2 billion.
  • Pfizer acquires Pharmacia, 2003, $64.3 billion.
  • Pfizer acquires Wyeth, 2009, $64.2 billion
  • Yahoo! bought out for $6 billion in 1999
  • @Home bought out Excite for $7 billion
  • AT&T bought out T-Mobile for $39 billion
  • Express Scripts bought out Medco for $29 billion

But these wealthy "job creators"—the multi-billionaires—can't find an old rusty quarter buried beneath their mattresses to give their hard-working employees (so that maybe they too might have a better life). Instead they say, "We have to be globally competitive", all while milking us out over every damn penny they can squeeze out of our own torn and worn out mattresses. Now many once-middle-class workers have become "used to haves".

Or, if these huge corporations aren't buying out other companies, they're buying back their outstanding company shares to increase the value of the CEO's stock options (over the past year Apple bought back $40 billion is stock).

Many investors believe that stock buybacks are a waste of shareholders' money. Investors would rather that companies "show them the money" by paying dividends. So these big companies are not only stiffing their employees, but they have also been screwing their investors too—as well as the government by dodging taxes. (New Study: Corporate Welfare Makes the Rich Lazy — even though some billionaires claim they work harder than everybody else).

In 2012/13 (as of April of last year), here are some other stock buybacks:

  • Home Depot bought back $17 billion in outstanding company shares
  • AT&T bought back $11 billion in outstanding company shares
  • GE bought back $10 billion in outstanding company shares
  • PepsiCo bought back $10 billion in outstanding company shares
  • United Parcel Service bought back $10 billion in outstanding company shares
  • American Express bought back $9.9 billion in outstanding company shares
  • 3M bought back $7.5 billion in outstanding company shares
  • United Technologies bought back $5.4 in outstanding company shares
  • Texas Instruments bought back $5 billion in outstanding company shares
  • Lowe’s Cos. bought back $5 billion in outstanding company shares
  • Qualcomm bought back $5 billion in outstanding company shares
  • Bank of America bought back $5 billion in outstanding company shares

Naturally, there were many more buyouts and stock buybacks, but you get the general idea.

And all while our "captains of industry" and our "pillars of the community" are doing this, they are also giving millions of dollars every year to politicians and superPACs to usurp democracy—to weaken labor laws and dodge taxes (rather than give their employees a fair share of the American pie).

Pretty soon we'll have one corporation running the entire damn country!

We lose $450 billion a year from tax evasion alone. Corporations (and individuals) have been addicted to hoarding trillions of dollars in offshore tax havens.

But yet, they whine and complain about taxes like greedy and unethical spoiled brats who refuse to share their toys with the neighbor's kids—paying record low "EFFECTIVE" tax rates on capital gains and corporate earnings.

And while they bitterly complain about taxes, they're also paying their "think tanks" to wage their class war by spreading their propaganda—such as claiming America has the highest tax rates in the world. But if the tax rate was 100%, and they only paid 1% (because of the loopholes they bribed from Congress), what difference does it matter what the "statutory" tax rates actually are?

Then our esteemed top 0.01% will spend millions of dollars every year to bust labor unions as they bicker like cheap bastards over raising the minimum wage, keeping millions of American workers on food stamps. And they also believe that only THEY should be entitled to afford access to good healthcare.

Rather than create jobs, the "job creators" have paid themselves millions of dollars every year by manipulating the market and their stocks, while also killing the economy for everybody else.

Capitalism has failed in America starting in 1979, with the decline of unions, the offshoring of jobs, dirty money in politics and congressional corruption. America really is in decline—as inequality is at record levels—as it has been, for decades. Just look across the nation at all the shuttered factories, the crumbling infrastructure and the abandoned ghost towns (Detroit is on the way, and now their are stealing our pensions too.).

They call this "creative destruction", but it's really been the destruction of America's Exceptionalism.

An excellent article on this subject in the National Journal argues that most Americans used to have much more faith in capitalism; but when you just look at young people, American Exceptionalism is basically gone.

"Where Gingrich and company go wrong is in claiming that the Obama presidency is the cause of this decline. It's actually the result. Ironically, the people most responsible for eroding American exceptionalism are the very conservatives who most fear its demise."

Reagaonomics? Trickle-down? Starve the beast? But the article goes on to argue that it's the belief in limited government and free enterprise that we lost, and that too many people have less religious affiliation, and that's another reason why we are in decline. But the article also goes on to note:

"Ronald Reagan in the 1980s, Newt Gingrich in the 1990s, George W. Bush in the 2000s—pushed many of the policies that have boosted inequality [and] decades of conservative policy have contributed to America's relative lack of economic mobility...Since the 1970s, the conservative movement has used the myth of a classless America to redistribute wealth upward, thus hardening class divisions, at least relative to other nations. It's no surprise that the young, having no memory of the more equal, more mobile America of popular legend."

Fifty percent of Americans over 65 believe America stands above all others as the greatest nation on earth—but only 27 percent of Americans ages 18 to 29 believe that.

Thirty years ago, a vast majority of Americans identified as members of the middle class. But since 1988, the percentage of Americans who call themselves members of the “have-nots” has doubled. Today’s young people are more likely to believe success is a matter of luck, not effort, as it once was in earlier generations.

If American Exceptionalism isn't already dead, then it has been dying a very slow and painful slow death for the past 40 years. Meanwhile, Shanghai, China has done exceptionally well over the past 40 years.

Shanghai, China - 1987 and 2014

Below are related links about the people who destroyed this economy for the 99% — many, by offshoring jobs to China.

* I posted a slightly different version of this post at the Economic Populist under "American Exceptionalism is Dead"

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