First published on ZNet, February 12, 2014. The United States’ corporate mass media and political class conduct fake debates and childish presentations of issues for the public – for the deliberately bewildered herd. Meanwhile, honest and candid discussion occurs with within the nation’s business and political establishment, which needs and wants to know what’s actually going in the world so as to function effectively in the interests of investors.
Just Ask Business: Goodbye J.C Penney, Hello Barneys
For an excellent example, look at a recent New York Times article that has received considerable attention in the last couple of weeks: “The Middle Class is Steadily Eroding – Just Ask the Business World,” by Nelson D. Schwartz. I was less than shocked by Schwartz’s main finding – that retail outlets catering to the rich and the poor are both doing well while those that targeting the middle class are doing poorly, something that reflects the sharp polarization of wealth and income in the U.S. today:
“In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models…..luxury gambling properties like Wynn and the Venetian in Las Vegas are booming, drawing in more high rollers than regional casinos in Atlantic City, upstate New York and Connecticut, which attract a less affluent clientele who are not betting as much, said Steven Kent, an analyst at Goldman Sachs….Among hotels, revenue per room in the high-end category, which includes brands like the Four Seasons and St. Regis, grew 7.5 percent in 2013, compared with a 4.1 percent gain for midscale properties like Best Western, ….Sears and J. C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits…Loehmann’s, where generations of middle-class shoppers hunted for marked-down designer labels in the famed Back Room, is now being liquidated after three trips to bankruptcy court since 1999.” (NYT, February 2, 2014, A1)
An Old Story
This is an important story that deserves coverage, but it’s not exactly new. I’ve been clipping media reports (usually from the business sections of major newspapers or from explicitly business-oriented magazine likeBusiness Week) with the same basic finding for many years across the Second New Gilded of savage and deepening inequality we’ve been experiencing in the U.S. since the Reagan years.
Four years ago, a study from the American advertising industry’s top trade journal Advertising Age (AA) reported that the American middle class had become economically irrelevant. The great global recession, AA found, had shined “a spotlight on the yawning divide between the richest American and everyone else,” signaling that “mass affluence is over.” Since “the incomes of most American workers have remained more or less static since the late 1970s” even as “the income of the rich (and the very rich) has grown exponentially,” AA explained, a “small plutocracy of wealthy elites drives a larger and larger share of total consumer spending and has outsize purchasing influence… More than ever before, the wealthiest households will be the households with significant disposable income to spend.”
Remember all the excitement nearly a decade ago when Citigroup economist Ajay Kapur had the audacity to tell investors that the U.S. was a “plutonomy” in which “There are rich consumers, few in number but disproportionate in the gigantic slice of income and consumption they take …And then there are the rest, the ‘non-rich, the multitudinous many . . . accounting for a surprisingly small bite of the national pie’”? The “plutonomy” story was already technically old, in 2005. By that time, the U.S. was already by far and away for some time the most wealth-top-heavy and unequal state nation among the world’s rich (“developed”) states.How could that harsh reality not be reflected in the spending patterns studied by market researchers and economists and reported on by business journalists?
There’s another and bigger problem with the Schwartz story, one it shares with others in the same mode I’ve looked at over the decades: a failure to place this growing inequality within the social-systemic and institutional context of capitalism, which is characterized by a strong inherent tendency towards the concentration of wealth and income in ever fewer hands. Just ask that Marxist your brother knows who teaches economics as an adjunct instructor down at the community college. Or just look up “capitalism” in the Webster’s New Twentieth Century Dictionary Unabridged.
Sham Debates for the Rabble, Honest Discussion for the Few
I did find one passage in Schwartz’s article particularly interesting and useful, however. “As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening,” Schwartz wrote, “in corporate America there really is no debate at all…the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence. Within top consulting firms and among Wall Street analysts, the shift is being described with a frankness more often associated with left-wing academics than business experts” (emphasis added).
So there’s a sham public “debate” about whether drastically deepening inequality actually exists staged for the bafflement of the multitude. But when corporate elites and their well-paid coordinators and experts talk amongst themselves beyond the hearing of the rabble (the rest of us), the harsh authoritarian reality imposed by the top-down class war the rich have been waging on and (as Warren Buffett likes to say) winning against the nation’s working class majority is a no-brainer. These guys have to know what’s actually going on. They don’t want to invest in fading and failing markets like U.S. middle-class retail when there’s big money to be made in sales to the rich and the growing ranks of lower-class bargain-basement proles – or to “emerging middle class markets” in places like China, India, and Brazil. The New Gilded Age isn’t about $17 per-person tabs at Olive Garden. It’s about $71 per-person bills at the Capital Grille and $3 lunch deals at Taco Johns.
Schwartz’s passage (the second one quote above) reminds me of something similar relating to the ever-escalating problem of climate change. Thanks to the remarkable lobbying, campaign finance, advertising, and public relations power of the coal and oil corporations and “carbon capital” more broadly, much of the U.S. public has been led to believe that there is a serious debate among scientists about (a) the existence of global warming and (b) human causation of global warming. Inside elite business and government planning circles, however, it is widely and well known that (c) no such debate exists and (d) greenhouse gas emissions from capitalism’s massive exploitation of fossil fuels have significantly altered planetary ecosystems in ways that can be expected to cause epic disruptions of social and material existence across the world. The nation’s leading corporations and financiers and the Empire – the Pentagon, the CIA, the NSA –cannot afford ignorance about real world earth system developments if they are to plan effectively to protect privilege’s profit rate and keep the carbon flowing out of the ground and into the air in the new age of anthropogenic (really capitogenic) global warming. So what if all earth science indications are that we have to get off fossil fuels fast if humanity expects a decent and desirable future? As Noam Chomsky observed two and half years ago in an important speech in Chapel Hill, North Carolina:
“If you look at the [sham public climate change] debate, on one side is maybe 98 percent of the relevant scientists in the world, on the other side are a couple of serious scientists who question it, a handful, and Jim Inhofe or some other senator. So it’s a debate. And the citizen has to kind of make a decision between these two sides. The Times had a comical front-page article maybe a couple months ago in which the headline said that meteorologists question global warming….That’s one side of the debate. The other side…is practically every scientist who knows anything about it. Again, the citizen is supposed to decide. Do I trust these meteorologists? They tell me whether to wear a raincoat tomorrow. And what do I know about the scientists? They’re sitting in some laboratory somewhere… So, yes, people are confused, and understandably….It’s interesting that these debates leave out almost entirely a third part of the debate, namely, a very substantial number of scientists, competent scientists, who think that the scientific consensus is much too optimistic. A group of scientists at MIT came out with a report about a year ago describing what they called the most comprehensive modeling of the climate that had ever been done. Their conclusion, which was unreported in public media was that unless we terminate use of fossil fuels almost immediately, it’s finished. We’ll never be able to overcome the consequences. That’s not part of the debate.”
Exterminst Growth Ideology
Which brings me back to Schwartz’s article. What, according to Schwartz and the experts he consulted, is the leading problem (besides declining profits for investors in middle class retail and job loss there) posed by the extreme inequality evident in U.S. consumer markets (and in other areas, including the nation’s money-soaked political system? Is it, perhaps, that this inequality consigns millions upon millions of Americans to abject poverty and insecurity through no fault of their own – this while a fantastically rich and frankly parasitic few enjoy lives of opulent luxury? Is it that inequality of outcome is in fact inequality of opportunity– a blunt repudiation of the national mythology of upward mobility through hard and honest work? Is it that economic inequality is strongly linked to and correlated with environmental spoliation (a problem I’ll return to in a moment)? Is it that popular governance is impossible when economic and hence political power is gathered in the hands of a narrow elite, consistent with Supreme Court Justice Louis Brandies’ 1941 admonition (channeling Western wisdom as old as Aristotle): “We must make our choice. We may have democracy in this country, or we may have wealth concentrated in the hands of a few, but we cannot have both”? 
No, the problem cited by Schwartz and his experts is that, to quote Washington University economist Steven Fazzari, “It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind.” Never mind that modern capitalism’s addiction to endless material expansion and accumulation lay behind the environmental crisis, threatening to destroy life on finite Earth in the not-so-distant future .
Schwartz, Fazzari and indeed much of what passes for a liberal intellectual class (including heralded “progressives” like Paul Krugman) in America have been cognitively captured by “the growth ideology.” As Le Monde’s ecological editor Herve Kempf noted in his aptly titled book How the Rich Are Destroying the Earth(2007), “the oligarchy” sees the pursuit of material growth as “the solution to the social crisis,” the “sole means of fighting poverty and unemployment,” and the “only means of getting societies to accept extreme inequalities without questioning them. . . . Growth,” Kempf explained, “would allow the overall level of wealth to arise and consequently improve the lot of the poor without—and this part is never spelled out [by the economic elite]—any need to modify the distribution of wealth.”
“Growth,” the liberal economist Henry Wallich explained (approvingly) in 1972, “is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable.”
Sadly, however, growth on the current carbon-capitalist model has put humanity – not to mention thousands of other sentient beings on Earth – on the path to near-term (historically speaking) extinction. The rich are not only hogging up a disproportionate share of the consumption pie and consigning millions to chronic material misery and uncertainty. They are dissolving democracy (what’s left of it) in the acid grip of plutocracy while poisoning the pie for every one else, ultimately even themselves. “There is,” a wise environmental slogan reminds us, “No Economy on a Dead Planet.” There is No Planet B.
Paul Street is the author of “Capitalism: The Real Enemy,” Chapter 1 in Francis Goldin et al., IMAGINE: Living in a Socialist USA (New York: Harper Collins, January 2014). Street’s next book is They Rule: The 1% v. Democracy (Boulder, CO: Paradigm Publishers, 2014:http://www.paradigmpublishers.com/books/BookDetail.aspx?productID=367810).
2. Quoted in Sam Pizzigati, “Madison Avenue Declares ‘Mass Affluence’ Over,” Campaign for America’s Future, May 30, 2011, www.ourfuture.org/print/67690.
3. Noam Chomsky, Making the Future: Occupations, Interventions, Empire, and Resistance (San Francisco: City Lights Books, 2012), 303–304.Robert Frank, The High-Beta Rich (New York: Crown, 2011), 156; Robert Frank, “U.S. Economy Is Increasingly Tied to the Rich,” Wall Street Journal, August 5, 2010.
4. Paul Street, Empire and Inequality: American and the World Since 9/11 (Boulder, CO: Paradigm, 2004),
5. See, for example, National Public Radio, “Pentagon, CIA Eye New Threat: Climate Change” (December 12, 2009), http://www.npr.org/templates/story/story.php?storyId=121352495.
6. For why I only half-playfully use this term, see Paul Street. “Why I am an Eco-Socialist,”http://www.youtube.com/watch?v=buHmNaTGanU&feature=c4-overview&list=UUIZ_969hFecsMFl7N7ERP3Q (discussion of capitalism and climate change starts at minute 16).
7. Noam Chomsky, “Human Intelligence and the Environment,” University of North Carolina, Chapel Hill, September 30, 2011, http://www.chomsky.info/talks/20100930.htm
8. Joseph E. Stiglitz, Price of Inequality, (New York: W.W. Norton, 2012), 17-20.
9. For important discussion and findings in this regard, see Richard Wilkinson and Kate Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger (New York: Bloomsbury, 2009), 217-232.
10. Quoted on the Website of Brandeis University at http://www.brandeis.edu/legacyfund/bio.html and inHarvard Magazine (March 2011) at http://harvardmagazine.com/2011/03/quotable-harvard. The original source in the latter is Labor, October 14, 1941.
11. Richard Smith, “Beyond Growth or Beyond Capitalism,” Real World Economic Review, issue 53, June 26, 2010, reprinted with revisions at Truthout (January 15, 2014), http://www.truth-out.org/news/item/21215-beyond-growth-or-beyond-capitalism; John Bellamy and Brett Clark, “The Planetary Emergency,” Monthly Review, Vol. 54, Issue 7 (December 2012),http://monthlyreview.org/2012/12/01/the-planetary-emergency; Joel Kovel, “The Future Will be Ecosocialist Because Without Ecosocialism There Will be No Future,” Chapter 2 in Francis Goldin, Debby Smith, and Michael Steven Smith, IMAGINE Living in a Socialist USA (New York: Harper Collins, 2014).
12. Herve Kempf, How the Rich Are Destroying the Earth (White River Junction, VT: Chelsea Green, 2007), 70, 73.
13. Wallich is quoted in William Greider, Come Home America: The Rise and Fall (and Redeeming Promise) of Our Country (New York: Rodale, 2009), 202.