Surprise, surprise U.S. is becoming a class-bound society

Published 2:32 pm Tuesday, April 3, 2007

A press release crossed my desk the other day that should have been both surprising and shocking, but it was neither for it simply confirmed something I have been thinking for a long time, and most especially since George W. Bush became president.

The title of the press release says: “United States becoming less of a meritocracy, and more of a class-bound society, Fed study says.”

Now, if this was from some so-called liberal study group, it would be easy to dismiss, at least by some in our society, but it’s not. This is a study by the U.S. Federal Reserve system, the Church of the Almighty Dollar, the most hide-bound, conservative government organization ever devised. To those folks, if it ain’t money, if it ain’t in favor of money and lots of it for the right folks — the wealthy, you know — it don’t count.

Frankly, to me that’s what makes the study — Intergenerational Economic Mobility in the U.S., 1940-2000 — most frightening. An organization dedicated to the almighty dollar issues a report warning that the United States “is no better than France or Britain. It’s actually lower than Canada and approaching the rigidity of Brazil.”

What all this means is that despite the occasional rags-to-riches story, “Income mobility has declined in the last 20 years,” says one of the report’s authors, Bhathker Mazumder, an economist with the Federal Reserve Bank of Chicago.

The absolute proof of this, of course, are the George Bush tax cuts aimed at helping the wealthy, most especially the one that would eliminate taxation on estates.

Think very carefully on that. The whole idea of eliminating the so-called “death tax” was to preserve whatever wealth the middle class may have accumulated, especially that of “small businessmen” and farmers.

Another “small” fact revealed in the report is that nearly one in five American households have “zero net worth or actually owes more than it owns. And the odds of a son or daughter rising above their parents in such a financial predicament have shrunk.”

Here’s another little bit of food for thought.

There are several methods through our incorporation and the federal tax system to preserve businesses and farms, especially given the way that farming has evolved. Let’s deal with just the “small family farmer,” a person who almost doesn’t exist anymore, except in the guise of the hobby farmer. Most agricultural enterprise today involves large, corporate farms.

Many small farmers, such as poultry farmers, actually are sharecroppers who may own their own land and the houses in which the chickens or turkeys are raised, but really little else. Their income is a “share” of the profitability of the poultry they raise while buying both the chicks and the means of raising the chicks from the processor. Can you see here who gets most of the profit?

That same form of production is moving into more and more fields of agricultural production because it allows the big boys — the corporations — to take the least risk while the contract producer has at stake not only his livelihood but everything he owns.

Many small businesses today also are franchises in which the franchise owner takes the greatest risk.

What estates are there to preserve, especially in farming where so few of the heirs of the farmers wish to return to the farm and the struggles of their parents for so little return? Again, there are tax means for families to preserve most of that, though such preservations may not be palatable for they are so cold-blooded in concept.

Excuse my being sidetracked for a moment. I spent 15 years covering farmers and what is happening to them because of the tax structure that rewards size and wealth and discounts small and average and a government at all levels which can not understand how the economics of farming works for actual farmers, nor does it want to.

The point simply is that despite all the lies and propaganda about the Bush tax cuts, they reward the wealthy, that is, they promote a class-bound society, something with which Bush and his crowd are very comfortable. After all, a few generations after your family made the wealth which you so comfortably enjoy, why would you want all these upstarts to actually live the American dream and accumulate wealth of their own. In doing so, they may take away some of yours.

The authors make the point that most Americans don’t believe that a society built on meritocracy is vanishing while one bound by class and position is taking its place. How well the lies and propaganda are working!

Remember Tennessee Ernie Ford singing “another day older and deeper in debt”? If it was true then, it most certainly is truer today. The United States Federal Reserve system has made that abundantly clear.