"The Rich Don't Always Win" - But They Usually Do
Thursday, 25 April 2013 09:27By Salvatore Babones, Truthout | Op-Ed
(Photo: Victor1558; Edited: JR / T
A 29-year-old future journalist named William Safire was there at the exhibition representing the American building industry. Doing his job very well, he steered Nixon and his Soviet nemesis, Nikita Khrushchev, toward a walk-through display of the typical American home.
As they toured the model American home, Nixon and Khrushchev debated the relative merits of the American and Soviet systems. The debate came to a climax in the kitchen, and so it went down in history as the "kitchen debate."
Khrushchev argued that the Soviet Union had surpassed America in rockets and high technology. Nixon responded by showing Khrushchev around the model American kitchen with its modern 1950s appliances. Nixon told Khrushchev how any ordinary American, a military veteran or a steelworker earning $3 an hour (worth $24 today), could afford a brand-new home with modern appliances. And he was right.
In The Rich Don't Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970 journalist and policy analyst Sam Pizzigati tells the story of how that American workers' paradise came to be. (Seven Stories Press, 2012)
It's not a pretty story. It took violent strikes, street fights, two depressions, two world wars and the twin threats of fascism and communism to push America's ruling class to the conclusion that There Is No Alternative to a policy of ensuring livelihood with dignity for all.
By 1950, the victory of the people over plutocracy was assured. By 1970, female, black, Latino and native Americans were beginning to share in that victory. By 1980, it was all over.
The vision of an America united behind civilized, egalitarian, progressive values lasted just three decades. But what a vision it was.
Pizzigati's book is a must-read for the contemporary progressive. I read its 370 pages in just two long sittings and would have read it in one if I hadn't had to sleep. Pizzigati's focus on the nitty gritty history of the battles and debates that led to the creation of mid-century America is surprisingly gripping - and full of surprises.
Do you think southern conservatives have always been anti-worker? Think again. Alabama Senator Hugo Black championed a 30-hour work week. He proposed work-sharing to fight the Great Depression, a policy successfully implemented in Germany to counter the 2008 global downturn.
Do you think LaGuardia is nothing more than a crowded airport? Think again. New York Congressman, and later mayor, Fiorello LaGuardia was a Republican crusader for higher taxes on the wealthy - most of whom, in his day, lived right in his own city of New York.
Do you think Franklin Roosevelt raised taxes in the 1930s to make the rich pay for his New Deal policies? Think again. The symbolic 1932 jump in the top tax rate from 25 percent to 63 percent came under Republican Herbert Hoover, before Roosevelt was even elected. Not that it was Hoover's idea: The momentum for this "soak the rich" policy came from House Republicans.
Pizzigati tells the story of how Roosevelt became a full convert to policies of progressive taxation and workers' rights only under pressure from Louisiana phenomenon Huey Long. Roosevelt's "second hundred days" at the beginning of his second term offered up the Social Security Act, the Public Works Administration and the National Labor Relations Act.
But Roosevelt's real conversion came during World War II, and it came because he needed money to pursue the war. When you need seriously large amounts of money, you can only get them from the rich. Roosevelt became first frustrated, and then angry, with rich Republicans who were intent on blocking his efforts to finance the war through taxation.
The president came out swinging in 1942 with a proposal to impose an after-tax income cap of $25,000 per year (equivalent to about $350,000 today). He settled for an 88 percent tax on incomes over $200,000 (just under $3 million today). Even income over $60,000 (just under $1 million today) was taxed at 75 percent.
If Pizzigati's microscope shows us anything, however, it is that real progress is rare and difficult. It takes means, motive and opportunity. To hear Pizzigati tell it, the means are provided by aggressive social movements, the motives are provided by political exigencies and the opportunities are provided by world wars.
Pizzigati charts two episodes of real progress toward a more equal America: the first prompted by World War I and the second prompted by World War II. Both wars called for huge government revenues that could only be met by taxing the rich. Both wars also called for cooperative labor relations and direct government management of the economy.
As it happens, in both World War I and World War II America was led by left-leaning Democratic presidents, Woodrow Wilson and Franklin Roosevelt. While these two leaders may not have been radical progressives, neither was beholden to bankers or big business. Both felt strongly that the rich should help pay the costs of the nation's wars.
And both happened to fight wars at times when America's labor movement was expanding, not shrinking. Though the labor movement may not have been strong enough to impose progressive policies on its own, the labor movement was able to exert pressure. By the time of George Bush's wars of the 2000s, such pressure was nonexistent.
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