INTRODUCTION:

Conservative America’s Economic

Bible and New Morality

Although the dictionary definitions of both “liberal” and “conservative” are positive and complimentary, they tend to take on new, derogatory meanings when applied to contemporary political parties or ideologies. That’s unfortunate, because it encourages an ideological absolutism that closes itself off from valid opposing viewpoints.

Liberals, for example, often address significant social problems by spending government funds to benefit the poor and disadvantaged. Damn liberals, on the other hand, create a dependent class of hopeless people by wastefully spending tax dollars.

Conservatives create jobs and a growing economy by cutting taxes on the rich who will invest their money. Damn conservatives unfairly sacrifice the interests of workers in order to maximize corporate profits.

Problem is, all of the above statements are to some extent true, as are similar statements that could be made about most of our country’s problems. The direction our country should take with regard to any specific problem depends upon what’s actually happening now. Usually, that’s somewhere between the extremes, and if the politicians in power choose to close their eyes to any evidence that denies their view of reality, there is no way their solutions to problems can be effective.

The Drift to the Economic Right

Our country has drifted much too far toward what is commonly thought to be the economic strategies of America’s financial conservatives. To be sure, their traditional fundamental financial principles are sound. However, in implementing them, there are valid qualifications that always should be recognized and addressed. For example, consider the following principles that relate specifically to the issues raised later in this book:

§         Government policies should discourage inflation. True, but who is causing the inflation, how should it be discouraged, and how much should it be discouraged?

§         Taxes should be both minimal and fairly assessed. Yes, but how much is minimal and what constitutes fairness?

§         Individuals should have the right and the opportunity to achieve gainful employment. Sure, but what’s the realistic definition of “gainful” in today’s economy, especially for the bottom 40% of Americans?

§         Corporations should be free to pursue their goals and to compete in the world markets. Right, but, considering basic human rights and minimum environmental requirements, what is the proper definition of “free”?

§         Economic growth is beneficial and should be encouraged. Agreed, but how much should it be encouraged, and how can the downsides of excessive growth be avoided?

§         Everyone should be free to achieve a higher standard of living by working harder or more intelligently. Of course, but how far does the definition of “free” extend in terms of the individual’s infringement on the rights of others?

Although these are listed as conservative principles, they actually are liberal principles as well. After all, each one relates to a desirable outcome. The difference is in strategy: How should they be interpreted and applied—given the reality of the environment (social and economic, as well as physical)? In an ideal world of objective observers, conservatives would see what is happening in America exactly the same way as liberals do.

However, judging from their actions—as evidenced by Congressional legislation, executive proclamations, and judicial decisions—they interpret reality quite differently. But, then again, as the following chapters will demonstrate, maybe they do see reality the same way as liberals do. Maybe conservatives just pretend they see it differently.

The Liberal View

In his books, Politics of Rich and Poor and Boiling Point, Kevin Phillips, a former conservative Republican, documented the growing wealth and income disparity between the rich and the middle class, and clearly explained the political causes of the disparity.

Edward Wolff proved the same case beyond any reasonable doubt, and offered suggestions as to how to help solve the problem in Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It.

In There’s Nothing in the Middle of the Road but Yellow Stripes and Dead Armadillos, Jim Hightower demonstrated how corporate America has gained control of our political system, and to the detriment of the average citizen. Barlett & Steele, America: Who Really Pays the Taxes, explained how our elected officials have shifted major tax burdens from the wealthy to the middle class. William Greider, One World, Ready or Not, warned of the growing problems that unmanaged world trade is creating for our future, especially for working-class Americans.

These and a host of other writers have clearly demonstrated that most of the benefits of free trade, technological development, income tax cuts, deregulation, and so on—go to the top 20% of Americans, and almost all of the sacrifices that accompany these benefits are forced onto everyone else, especially the bottom 40%. Unfortunately, the American public has yet to catch on to these patently obvious realities, and for good reason.

To their shameful credit, conservative America’s financial community has done a fantastic job of conning the American public, and even themselves, into thinking that writers like these cannot be trusted. They accuse them of being socialists, possibly communists, or at the very least, liberals.

The Conservative View: A Classic Case of Denial

Naturally, conservative economists and politicians deny that they are conducting class warfare against working Americans. To defend themselves against this charge, they even profess ignorance about the obvious causes and effects of their class war. Take, for example, a May, 1998 article in The Wall Street Journal that proclaimed in a headline that the “U.S. Jobless Rate Drops to 28-Year Low.”  

Then, it presented a mystery: The historic low in the unemployment rate had not caused wages for working-class Americans to accelerate, as traditional economic theory said they should. In fact, as everyone knows, wages in the United States hadn’t kept up with inflation, or with economic growth, or with the rise in corporate profits, or the rise in the stock market—for over 20 years.

This is in stark contradiction to traditional economic theory.  Low unemployment was supposed to cause higher wages, rising prices and inflation. In the words of the Journal,

The fact that none of those dire consequences has come to pass even as the unemployment rate slipped under 4.5% has left economists befuddled about the very nature of the economy.¹

(Note that the Journal considers higher wages for mere workers a “dire consequence,” even in a booming economy when incomes for the top 20% of Americans are skyrocketing.)

The only mystery—and the only “befuddlement”—about this scenario is why any economists with IQs over 80 were surprised to begin with. It is possible, I suppose, that mainstream economists have been so thoroughly brainwashed by America’s right-wing think tanks that they have become incapable of interpreting what they read in their own financial publications. Their protestations of abysmal ignorance, in this sense, may be justified.

What’s even more amazing are the protestations of ignorance by the Fed itself. A year after the Journal article, in May 1999, Barron’s explained the bafflement of the Fed’s braintrust about our “enviable” economy:

It’s the most intriguing question in modern economics: Can the United States’ rule-shattering streak of torrid growth, minuscule inflation and roaring equities continue? Nowhere is it getting more attention than at the Federal Reserve Board, which nowadays might be thought of as the world’s most powerful think tank. Its braintrust of Ph.D.s is struggling to figure out what’s going on in the economy and, more importantly, how to maintain its enviable performance….

The fact that inflation remains so tame at a time when unemployment is sliding and the pool of available labor is shrinking can’t be easily explained away, she [Fed vice-chairman Alice Rivlin] explains.²

Can’t be explained away? Given the Fed’s chronic preoccupation with the fear that wages might be about to go up—and its publicly stated commitment to make sure that won’t happen—the only condition that can’t be explained away is why American workers continue to vote for the conservative politicians who deliberately created their wage stagnation.

It’s all there, in The Wall Street Journal, Forbes, Fortune, Barron’s and Business Week, among others. Daily, they clearly describe how financial conservatives have turned conventional economic wisdom on its head and prevented normal market forces from increasing working-class wages. There is absolutely no mystery about it.

A Guided Tour of Conservative Values and Strategies      

Since those who are doing so well in our society refuse to be swayed by the documented, reasoned discourse of others, it’s time to direct attention to their own words. This book is a guided tour of conservative America’s financial values and strategies.

For those who are not regular readers of financial publications, it can be a starting point for understanding the massive amounts of material that say the same thing: Financial conservatives are ruthlessly taking unfair advantage of working Americans—and they are feeling virtuous about it.

Their concerted action is not so much a conspiracy as it is a religion, complete with its own set of values and moral standards. Today, the morality of any given action is to be judged solely by its impact on the bottom line. Greed, traditionally considered as one of the seven deadly vices, has now become a virtue. Our federal government’s economic practices are to be judged by their adherence to the new conservative bible, rather than by their impact on society.

This bible consists primarily of five books:

• The Book of The Wall Street Journal
• The Book of Forbes
• The Book of Fortune
• The Book of Barron’s
• The Book of Business Week

There are other, lesser books written by prestigious conservatives, but the above are the main ones. They are published on a daily, weekly or biweekly basis, and serve as a communication network for strategic planning. America’s financial elite set common goals, coordinate activities, and morally rationalize their callous behaviors by constantly referring to their new testament and chanting its gospel:

• High incomes and tax cuts for the wealthy are good because they create jobs. Wage increases for workers are always bad because they cause inflation.

§         Corporate profits are good. Legislative protections of working conditions are expensive, benefit primarily workers, and are therefore bad.

§         Economic growth is good, as long as it increases corporate profits. Economic growth is excessive—and bad, if wages start to go up.

§         The Chamber of Commerce and the National Association of Manufacturers are good for American workers. Labor unions are bad for them.

§         And so on, as will be covered later.  

Then conservatives proselytize each other and the general news media. They are exceptionally good at this, because they have huge sums of money to finance their activities, and they own most of the major TV networks and newspapers. They are even able to con many of their victims—working-class Americans—into voting for Republicans and conservative Democrats, and against their own best interests. These are the very same politicians who made the laws that led to the gross injustices described in the following chapters.

Schizophrenia of America’s Right Wing

The Wall Street Journal, Forbes, Fortune, Barron’s, and Business Week are first-rate publications. Each is outstanding in a different way. However, they also have a schizophrenic mix of qualities that is important to understand.

Their factual reports of news events usually meet the standards of professional journalists about as well as most good news publications. Their coverage of what is actually happening in business boardrooms, the manufacturing floor, international trade and so on, is often our best source of information.

Their editorial policies and their interpretations of news events, however, seem to come from right-wing-outer-space somewhere.  They toss professional journalistic standards out the window and become pure propagandists for the rich and powerful. After reading their editorials, one has to wonder: Do the editors ever read their own news stories? How can they possibly believe what they are trying to get their own readers to believe?

Because of this schizophrenic mix, The Wall Street Journal, Forbes, Fortune, Barron’s, and Business Week become valid, accurate and verifiable sources of two self-incriminating bodies of evidence. First, their editorials (and even a few of their news stories) present clear statements of the philosophies, goals, strategies, and biases of America’s financial conservatives (fundamentally Republican and conservative Democrat, wealthy, formally educated, and/or powerful).

Second, their news stories present the undeniable disastrous results of those philosophies, goals, strategies, and biases on our society and workers—as conservatives themselves know them to be.

An appreciation of this journalistic version of a common mental illness should help readers understand how the following articles from the same publications contradict themselves. The combination of their accurate news reports, and their deliberately intended-to-deceive opinion pieces expose the true values and strategies of today’s financial conservatives.

The Brief

Although this book is separated into nineteen chapters, in a sense it is one argument, broken into sequential parts. To facilitate easier understanding and to demonstrate the logical flow of the total argument, it is encapsulated in the next section, “The Brief.”

Each point in The Brief is fairly complete in itself, but has a reference chapter that goes into greater detail. Each chapter presents a slightly different angle to an issue, or an added increment to an on-going discussion.

The cumulative result of the evidence is indisputable: Conservatives, as a matter of policy and strategy, are waging financial warfare against working-class Americans, they are denying that they’re doing it, and, so far, they’ve been getting away with it.