The documentary by Jacob Kornbluth won the Special Jury Prize at the Sundance Film Festival 2013 (“With clarity, humor and heart, this timely film reveals the underpinnings of an urgent threat to American democracy. “)
Here is a summary of what has happened to democracy in the last years in the United States (and surely to other countries, still and too), explained and narrated from former US Secretary of Labor Robert Reich:
We are the 1%
The One Percent in the U.S. earns at least $380,000 per year, whereas $30,000 to $60,000 is the actual average.
As long as the gas tank is full and enough food on the table it might look alright, but the rich people with about $10 million per year get so much return, they just cannot spend it. There will not be enough spending for all people to be equal. The income becomes more and more concentrated in fewer and fewer hands.
Just like in 1928/29 after the “Great Crash” and “Great Depression” and almost exactly just like the “Great Recession” in 2007/08, the wealthy turned to the financial sector. This one bloomed and focused on a limited number of assets (housing, gold, speculative instruments etc.). The middle class had stagnating incomes, while the financial bubble was getting bigger and going deeper into debt, so the wealthy could maintain their living standards.
-> Debt bubble, economic instability, struggling middle class.
The middle class is the center of the economics. Prosperity is investments by the middle class people.
There is no effectively free market. The government sets the rules and constructs a “free” market.
But who does the government hurt and who does benefit from these rules?
“Rich” is not a “Job Creator”, it is privilege and power.
Productivity was growing again, but average earning is not rising since the 70’s anymore: something happened in the late 1970’s, folks: technological revolution, more powerful and deregulate economic markets… labor unions were declining almost exactly as the share of the middle income. The real household debt was increasing rapidly, whilst the income didn’t at all.
Wages have gone nowhere for 30 years – for just than inflation – and are exhausted.
From the mid 60’s on women started to work more and more, to the “Nine to Five”. Men and Women worked both now, also because the wages were sinking.
They had to work even more, when the housing prices raise form the mid-to –late-90’s onwards.
-> “I take a loan against my home, I can refinance my home” – that kept the middle class going
-> Debt bubble, trying to maintain the living standards.
-> Debt hole. 2008 it bursts.
Globalization & Technology –
it goes from obscurity to meaninglessness without any intervening period of coherence.
Wages are stagnating since the 70’s and the costs are rising: housing, healthcare, childcare, higher education – rising faster than inflation. 42% of the kids born in poverty in the U.S. will not get out of it (in Denmark it’s 25%, in Great Britain 30%). Just to name a few examples for average wages:
|Job||Average wage per year in 2010|
|Short Order Cook||$21,280|
|Personal Care Worker||$20,520|
|Meat Packer||1970s: $40,599||2010: $24,190|
|Bank Teller||1970s: $27,920||2010: $24,100|
So then, in 1981, Ronald Reagan fired Air Traffic Controllers, there where major assaults to unions, employers fought to bust unions. They thought they have to- in order to maintain their competitiveness.
Between 1997 and 2007 most people were doing well, particularly in inequality.
Finance was the fastest growing part in economic. People thought:
-> “The government is bad, the market is good.”
But the worries about the undermining of democracy were and are rising:
With money comes the capacity to control politics – LOBBYISTS
“We can help you with the next election, when you cooperate with us. – There’s a guy in every office!”
They are there for you, but what for? Access!
Blame (it’s just a file, it’s not that they are the only rich): People abuse their wealth by lobbying for bailouts, subsidies, and taxes etc. that are going to entrench their wealth. That’s the reason the rules changed so dramatically.
Inequality and top tax rates have had an inverse relationship.
Taxes on the top were never below 70%.
Until Reagan dropped those taxes on the top – to barely 28% (Bush & Obama to around 35%)
But most of the rich have their income in form of capital games, so they only pay about 15%
33% is the average as a married couple in the 30ies.
13.9% paid Mitt Romney in 2012, with a $86 million income it’s about 17.7%, with $10-30 million it’s around 11%.
When you give rich people tax breaks, all in the name of job creation, all that really happens is that the fat cats get fatter – that’s what happened over the last 30 years.
There is less revenue sharing for the states, because the people cannot pay more taxes any longer. So the funding of the states has to be cut out and tuition and fees for (not only) higher education go up.
Berkeley College in the 60’s had no tuition fee, in the 70’s it was a (today’s) $700 per year and now it is $15,000 for in-State residents!
2012 came Obama’s Buffett Rule: if you make more than $1 million, you should pay at least the same in taxes as middle class families (at least 30%).
-> Suddenly the “Center” moves to the right and calls Obama and Robert Reich & Alan Simpson a “Communist//Socialist”, “modern,” “Leftie” “Commie”
That’s a correlation: the highest degree of political polarization in and of the House of Representatives.
People with a lot of money can inundate the democracy with their money.
The quantity of money is new. You can actually buy a President…
If Congress and if the Executive doesn’t know how to get this straight – the ultimate guardians are up in the Supreme Court…
The contrasts between the values we share and the reality we live in is the fundamental foundation for social change:
Society is pulling apart, looking for someone to blame (e.g. Muslims), losing the moral foundation stone, the undermined democracy.
-> Tea Party
-> Occupy Movement
It does not matter from which country you are or if you call yourself liberal or republican or whatever:
In which countries the workers make what value for building an iPhone?
Little over 700 people vote at the lecture:
The iPhone is assembled in China, but the pieces are from elsewhere around the world.
It does not matter from which country YOU are.
If politics is not out there, it starts right here!
Are you ready to take action?