Winning Battles, Losing the Long War–and a Poem

Homeless woman sleeping in the park.

In this week’s post, I’ll share my perspective on some political and economic developments. If you’d prefer something lighthearted, skip down to the cosmically-inspired poem at the end. It will take you out of this world.

The Empire Struck Back

When I was in my 20s, crusading against the Vietnam War and for the rights of women, gays, and ethnic minorities, I thought we were going to make a revolution. Many of my co-crusaders shared the same fantasy. But we had no historical perspective, and didn’t understand why, and under what circumstances, revolutions happen.

We did win certain battles but now are on the verge of losing whatever we’d gained. Gay marriage is legal, at least until the GOP-controlled Supreme Court finds a way to reverse that decision. Abortion/reproductive rights became legal, though SCOTUS is expected to take them away again. They’ve steadily chipped away at voting rights for Blacks and others in heavily Democratic districts.

Why are we losing? IMO, we failed to overturn, or even significantly alter, the vast economic apparatus that runs this country. As cartoonist Johnny Hart pointed out with respect to the Golden Rule, “Whoever has the gold makes the rules.” The rulers are never interested in social justice, which would undermine their domination—far better to keep the peasants fighting amongst themselves.

A Sudden Spike in Inflation

You don’t need an economist to tell you that prices, like the cow in the nursery rhyme, have jumped over the moon. Just walk through the aisles of the grocery store. But economists and pundits have different explanations for the spike—averaging 7.5% this year. The Guardian, a liberal paper, presents the generally accepted view: “Inflation in America has been driven higher by soaring demand and a lack of supply caused by Covid-19’s global impact on trade.”

Robert Reich, former U.S. Secretary of Labor, and also an economist, accepts this explanation but adds: “[It] doesn’t explain why big and hugely-profitable corporations are passing these cost increases on to their customers in the form of higher prices. If corporations were competing vigorously against each other, they’d swallow these cost increases in order to keep their prices as low as possible — especially when they’re making huge profits. Yet corporations have been raising prices even as they rake in record profits. That’s because they face so little competition that they can easily coordinate price increases with the handful of other big companies in their industry.”

Government “solutions”

The U.S. government hasn’t enforced anti-trust legislation in years, and it won’t as long as those corporations own almost all our politicians. The Federal Reserve Board is planning to raise interest rates in order to bring down prices. But Prof. Joseph Stiglitz (Nobel laureate in economics) says that “a large across-the-board increase in interest rates” would be worse than the disease: “We should not attack a supply-side problem by lowering demand and increasing unemployment. That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.”

Inflation is running high in the UK as well. The Bank of England has raised interest rates and proposes restricting wage increases. Neither the U.S. nor UK are breathing a word about price controls, which were most recently employed in the 1970s to combat inflation. In other words, this time we let the workers—and only the workers—take the hit.

Reich counters: “Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage…wage-price spirals used to be a problem [but it is no longer the case] because the typical worker today has little or no bargaining power.”

Workers have little to no bargaining power because most don’t have unions. Union membership in the private sector peaked in 1945 at 33.5% but then slowly declined. It’s now 6.2%. Reasons include the Taft-Hartley Act of 1947, which enshrined “right-to-work” laws, and companies shipping manufacturing overseas in the 1970s. In 1980 voters were dissatisfied with high unemployment and worsening inflation. Blaming this on the incombent Carter administration, they elected Ronald Reagan, who rewarded them with an increased assault on labor unions. Middle class incomes declined correspondingly.

Running on the Hamster Wheel

The purchasing power of ordinary American workers—at least the white ones—was at its peak after World War II. I’m going by what I’ve seen, as well as including government figures, since they don’t give the whole picture. The Consumer Price Index (CPI) tells you that you need $10 today to buy what $1 bought in 1950, but that’s only about inflation.  It’s based on a market basket of consumer goods and services in urban areas. The basket includes common household purchases, such as cereal, milk, coffee, clothing, and medical care—items necessary to basic survival.

Not included in the CPI, however, are purchases that make for a life well lived. For example, the cost of an education: tuition-free when I attended City College of New York from 1960-1965. Today the annual fees are $410 and tuition is $6,930.

Or a summer vacation: when I was a child in the late ‘40s and early ‘50s, my father could support a family of five on $70/week take home pay. We lived in a tiny apartment, but owned a second-hand car. We were also able to rent a bungalow in the Catskills for the entire summer. Today only the wealthy can afford a summer in the country.

Starting in the early ‘60s, when women were entering paid employment in large numbers, the real power of wages declined, so that it takes both parents to support a family at the same level as we enjoyed. IMO, this is no coincidence, any more than the fact that women are usually paid less than men for the same work. Employers found they can get two for the price of one. Today Mom and Dad both must run on the hamster wheel, fast as they can.

Business is booming for Kroger’s, however. It’s the fourth largest employer in the Fortune 500, with sales growth of at least 13.7% over the past two years. CEO Rodney McMullen was paid $$22.4 million in 2020. Meanwhile around 75% percent of Kroger workers said they were “food insecure”—current jargon that means they often went hungry and relied on food stamps. About 14% said they were homeless or had been homeless in the previous year. An additional 63% said their wages didn’t cover basic expenses every month.

And it’s not just Kroger’s. Amazon, Walmart, and McDonald’s are among the top corporations whose employees are so poorly paid they receive food stamps and Medicaid. According to a U. Chicago study, about 40% of homeless on the streets and over 50% of those in shelters have been in paid employed during the past year.

A Contrary Point of View

Mark J. Perry, economist at the conservative American Enterprise Institute (AEI), says that workers are better off than in the 1950s, and there is no wage stagnation. Why? He presents a chart, showing that household appliances cost less in terms of the number of hours you have to work in order to pay for them. For example, in 1959 it would take a worker paid $2.09/hr almost 129 hours to pay for a color TV. In 2013 a worker paid $19.30/hr would only have to work around 27 hours for the same appliance.

As Mark Twain put it, “figures don’t lie, but liars figure.” What Perry neglects to mention is that almost 86% of American households had TV in 1959, but only between 1% and 2% had color. Networks broadcast almost exclusively in black and white. Color TVs were a luxury item back then and were priced accordingly. Today you can’t buy a black and white TV, except as an antique.

The cost of other appliances also went down, as corporations shipped the manufacturing jobs to low wage countries. They also made as many parts as possible out of plastic and built obsolescence into the gadgets, so you’ll have to replace them a lot sooner.

Perry doesn’t give figures about the cost of necessities like food and housing–which would undermine his argument. You can live without a TV but you need a roof overhead. (Or you can sleep in a tent or your broken-down car, as an increasing number of Americans are doing, including many who work full-time.) In the 1950s, we were told to budget 25% of income for housing. Then it went up to 30%, and now one in four Americans are paying 50% or more.

A note about Mr. Perry and the American Enterprise Institute: Perry is a “man’s rights” activist and has opposed hikes in the minimum wage. The AEI is a neoconservative “think tank” promoting free market capitalism in an era of huge monopolies. Many of its members are climate change skeptics—no surprise, considering that Exxon Mobil is one of their significant donors.

What Next?

I’ll talk about that in my next post. Meanwhile, here’s the promised poem:

Seeing the Light

A million miles beyond the moon
the James Webb spreads its mirrors.
The first of its photos arrive in June,
the farthest stars brought nearer.

The giant telescope’s designed,
we’re told, to take us through eternal night
to that moment in time the Divine One said,
“Let there be light!”

Will we see an enormous hand
as painted by Michelangelo?
Is the Creator an old white man,
or an octopus, or antelope?

A cosmic cockroach? Koala bear?
An apple tree, or pokeweed in the yard?
Some unimaginably weird
life-form from another star?

Each creature, with its every breath, declares,
“I was made in the image of God.”