Neoliberalism Doesn’t Care About a Middle Class Until it Needs One to Defend its Interests Abroad
The value of your money is dependent on the power of your military. No middle class? No military power. Russia knows this. China is not far behind.
Just the other day, I read a very interesting article by Thom Hartmann. You might know him from the liberal publication, Capital and Main. His article, What Happens When Corporations are Taxed at 50% — Like Before the Reagan Revolution?, provides some great history about the way the American economy used to work. The gist of that story?
Reagan’s tax cuts made it profitable for American CEOs to pay themselves far more than they’re worth. They made it profitable to move our manufacturing base to China. They made it profitable to engage in military adventures abroad. They made it profitable to pay workers less, cut their benefits and bust their unions. The Reagan tax cuts were, by far, the dumbest thing that Americans have ever done to themselves.
Russia and China both know this.
Hartmann’s article was about the travails of neoliberalism. I liked it. I think it was spot on. But I think we have to take it one step further. If the goal is to get people to work for money, you have to pay them what they’re worth or they won’t work. Reagan and his Republican friends seem to have missed that very important part of economics.
If you don’t pay employees what they’re worth, and you take the money to buy your second house on the coast of Spain instead, that’s inflationary. Most people don’t get this part. Money only has value when people are willing to work for it. If people don’t work, then money has little value.
Taken to the extreme, if the wealthiest people in the world rig the economy so that only they can determine their income and make money from their efforts, no one else will be willing to work for it. Worse, the military will stop defending them.
Name a billionaire you’d be willing to go to war for.
The value of the dollar is directly dependent on the power of the American military. If there is no military power, then there is no purchasing…