The New Gilded Age
by Nancy Goldstein
www.rawstory.com, January 5, 2006
In the summer of 1863, Lincoln's enactment
of the draft--the first federal conscription in America--set off
widespread rioting in the streets of New York City. The mandate's
most reviled feature was a "commutation" rule that allowed
sons of privilege to buy their way out of enlistment for the 21st
century equivalent of $6,000. For the northern European immigrants
who comprised over half of the city's population, starving cheek-to-jowl
in the corroding tenements of the Lower East Side, the rule proved
that Lincoln's "rich man's war" against the South had
become a fight for poor, and thereby expendable, men to resolve.
Nearly a century and a half later, the
wealthy don't even have to pay for the privilege of sending less
well connected sons and daughters off to war to die in their stead.
The draft has been rendered unnecessary by the tens of thousands
of young men and women--disproportionately low income or working-class,
over a third of them people of color--who "choose" to
enlist while the children of better-off folk, who have other viable
options for educational and professional advancement, are able
to choose lines of work where they're less likely to be killed.
Welcome to the new Gilded Age. Once more,
a small number of individuals have exploited the latest technology
and their powerful personal connections to amass incredible wealth
at the expense of an exploited majority.
Like its earlier incarnation at the end
of the 19th century, the new Gilded Age is marked by huge discrepancies
in income between a minority of very rich people and the majority
of the rest of us (even Alan Greenspan says so), a tendency to
make underprivileged people do all the dirty work, widespread
abuse of corporate and political power, and profligate spending
in the face of increasing national poverty. The same mass media
that used to naively assert that every man could become an Andrew
Carnegie now makes the same implicit claim through "The Apprentice."
Yet the excesses of this latest iteration,
made possible by the take-from-the-poor-and-give-to-the-rich policies
of the Bush administration, have not led to any of the upheavals
that marked the end of the first Gilded Age--strikes, riots, the
creation of labor unions, legislation to rein in the excesses
of big business--or any of the attempts to protect the rights
of consumers, workers, immigrants, or the poor that followed,
during the Progressive era.
For this new Gilded Age is made palatable
by the illusion that people "choose" to be either rich
or poor. That they "choose" to be either captains of
Wall Street or foot soldiers in Iraq. That they "choose"
to be safe and sound in Crawford or shivering awaiting rescue
on their rooftops in New Orleans.
In the new Gilded Age, no powerful government
ever fails its citizenry and there are no catastrophes in the
lives of low-income people--only lucky loafers enjoying the benefits
of noblesse oblige. Or, as Barbara Bush said of the thousands
of evacuees huddled in the Astrodome: "This is working very
well for them."
The tranquility of this new Gilded Age
is secured by the substitution of consumer choice for genuine
political choice, and abetted by a lazy, corporate-run media.
John Berger, the brilliant British Marxist art historian of the
60s, was right: give the people enough kinds of ketchup to choose
from and they'll be too busy wandering the supermarket aisles
to ever stop and contemplate whether they enjoy the same degree
of variety or agency regarding their government.
The less privileged are lulled into fantasies
of choice, power, and control by cheap, "personalized"
consumer goods secured by easy credit. But lose your job and blow
your "interest only" mortgage, and neither your special
ring tone nor your personally programmed iPod will protect you
from the brutal realities of this time.
Because despite all the talk about "personal
responsibility" and an "ownership society," the
golden insignia of the new Gilded Age is a double standard that
allows the wealthy and powerful to network, plea bargain, or buy
their way out of their obligations while holding the feet of less
privileged people to the fire at every turn.
Consider the difference in accountability
between individuals unable to pay their debts and corporations
that default on their pension plans.
Under the new bankruptcy law enacted last
year by a Congress eager to reward their campaign contributors
in the credit industry, the vast majority of common folk saddled
by unmanageable debt--usually because of severe misfortune, such
as medical emergencies, job loss, or divorce - will be deemed
to be in possession of "excess income" and will no longer
be permitted to wipe the slate clean. Instead, they'll be put
on an accelerated payment schedule for a 3-5 year period at a
much higher rate of interest and forced to pay for "fiscal
management" classes in addition to lawyers' fees.
How poor will you have to be to avoid
this fate? Let's put it this way. A couple each earning measly
minimum wage for a total of $21,840 per year with no dependents?
According to the new "means test," that couple is $9,720
over the so-called poverty threshold, or stated similarly, earning
80.2% "excess" annual income. Those sluggards will just
have to pay up.
But it's an entirely different story when
corporations fail to meet their financial obligations to their
workers--which is increasingly the case. As Roger Lowenstein notes
in a recent article on the end of pensions, "Corporations
were happy to offer rich retirement plans to their workers as
long as accounting tricks and federal insurance made it easy to
delay the day of reckoning."
And why not? When the day of reckoning
comes, the firm won't sell off its assets to pay for the failed
plan or garnish the wages of the CEO (who, on average, earned
$9.84 million, or 358 times the average worker's pay last year).
Debt from the failed plan becomes the responsibility of the government's
pension insurer, the Pension Benefit Guaranty Corporation (PBGC)--currently
in the red to the tune of $23 billion (and estimated to bloom
to $100 billion within two decades). Which means that average
taxpayers like you and me will pay the corporation's debts while
it goes merrily on its way.
Because that's what "personal responsibility"
really means to this administration. When it comes to covering
bad debt from corporations that underestimate how much they need
to put away to keep their commitments, it's on us. Ditto for when
businesses game the system by exploiting lax rules that allow
them to get away with inadequately funding their pension plans.
Or promise the world to their workers, knowing that there's a
safety net if they ever get in too deep. And when it comes to
shouldering debt from bad individual luck, that's on us too.
Welcome to the new Gilded Age. It's back
and it's better than ever - if you're one of the gilded.
Nancy Goldstein can be reached at email@example.com.
Her next column will appear on Thursday, January 19th.