Sunday, November 13, 2011

Return of the robber barons

Return of the robber barons:
JP Morgan
J.P. Morgan himself

(Edward Steichen)

Recently I began to re-read Howard Zinn’s A People's History of the United States and in the chapter “Robber Barons and Rebels” I was struck by the similarity of what was happening from the 1870s through the early part of the 20th century and today.

All quoted sections, unless otherwise noted, are from A People's History of the United States.

[T]he strikes of the white workers would not be tolerated; the industrial and political elites of North and South would take hold of the country and organize the greatest march of economic growth in human history. They would do it with the aid of, and at the expense of, black labor, white labor, Chinese labor European immigrant labor, female labor, rewarding them differently by race, sex national origin, social class, in such a way to create separate levels of oppression—a skillful terracing to stabilize the pyramid of wealth.

Sound familiar? It should. It is the same divide and conquer strategy the Republican party of today is using. Making teachers and other public servants pariahs, splitting the have-a-littles from the have-nots. Making soldiers into heroes, until they speak out against the system they served and fought for … then they are attacked and called cowards for speaking out against the very oppression they were fighting. Organized labor was the enemy of the robber barons then and is again today—even though the most productive time in our nation's history was from the post-WWII years to roughly the mid-seventies when the unions were at the height of their power.

While some multimillionaires started in poverty, most did not. A study of the origins of 303 textile, railroad and steel executives of the 1870s showed that 90 percent came from middle- or upper-class families. The Horatio Alger stories of “rags to riches” were true for a few men, but mostly a myth and a useful myth for control.

Recently a right-wing friend told me that the reason he supports tax cuts for the rich is because he will someday be rich. I do not know how he will ever become rich—he is underwater on his mortgage and up to his eyeballs in credit card debt. But he will vote against his own best interests because of the myth that everyone, if they work hard enough, can become a millionaire in the United States. Mr. Zinn has it right: The myth of rags to riches is one to control the masses. It worked in the gilded age and it works today.

In 1895 the gold reserve of the United States was depleted, while twenty-six New York City banks had $129 million in gold in their vaults. A syndicate of bankers headed by J.P. Morgan & Company, August Belmont and Company, the National City Bank and others offered to give the government gold in exchange for bonds. President Grover Cleveland agreed. The bankers immediately resold the bonds at higher prices, making $18 million profit.

Nice to know the banks were just as corrupt then as they are now. The more things change, the more they stay the same. JP Morgan is now JP Morgan Chase and the National City Bank is now PNC—and they are both still ripping off the U.S. government.

And so it went, in industry after industry—shrewd, efficient businessmen building empires, choking out competition, maintaining high prices, keeping wages low, using government subsidies. These industries were the first beneficiaries of the “welfare state.”

High prices, low wages and government subsidies … sound familiar? If not it should. Look at the profits the oil industry is pulling in, and how much money they get from the U.S. government. How much money has the government given the banking industry alone over the last few years? The more things change the more they stay the same.

Meanwhile, the government of the United States was behaving almost exactly as Karl Marx described a capitalist state: pretending neutrality to maintain order, but serving the interests of the rich. [Emphasis added]

I think the above quote speaks for itself and needs no further iteration from me.

[T]he Supreme Court, despite its look of somber, black robed fairness, was doing its bit for the ruling elite. How could it be independent, with its members chosen by the President and ratified by the Senate? How could it be neutral between the rich and poor when its members were often former wealthy lawyers, and almost always from the upper class.

Citizens United, anyone? Ronald Reagan, George H.W. Bush and George W. Bush pushed the Supreme Court not to the right but to the corporations. Sure, they will throw a bone or two out the right-wing faithful now and again on social issues, but for the most part the Supreme Court and the leaders of the Republican Party of today really don’t give a rat’s ass about abortion or gay marriage (they do use social issues to drive people to the polls, but that is about the extent of it). They only care about corporate profits and how to protect them. That is how we got Citizens United and money equaling speech. It was not about speech, it was about giving corporations more power.

We are the 99 percent and we have been for close 150 years. Other than a few brief years during the postwar period we have not gained any ground on the 1 percent. Of late we have lost ground. We have learned nothing from our history: If the robber barons of old were given an inch, they took a mile. The modern day robber barons were not only given an inch—they were given the keys to the castle with deregulation. They made and are making millions at the expense of millions.

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