The wealth gap in America is widening exponentially, and we can all see and feel it. It took about a generation to achieve, but the middle class in this country has been decimated. Most American people strongly agree on that fact, but are confused as to how it happened, or who to blame for it.
They don’t really know who to blame for it, or how it came to be because nobody talks about it. The narrative always veers away from talking about it because it’s not politically correct to to talk about wealth inequality as that amounts to bringing up issues of class warfare.
So, wealth inequality is never discussed in the mainstream channels, and the American middle class quietly and anonymously disappeared without much fanfare, and without the people knowing who is actually responsible, or who to hold accountable.
Ask the average American today who they think is responsible for the disappearance of the middle class, and they would invariably blame one of the two political parties. Yes, it’s either the Republican party, or the Democratic party, depending on the political affiliation of the person answering the question.
They’ll be right, and wrong, at the same time when they blame it on either one of the political parties. They’ll be right because the people responsible will be found in both political parties, but they’ll be wrong because these people don’t represent the beliefs and platforms of those parties.
Yes, the people who caused the demise of the middle class can be found in both parties because they took over the parties and usurped their true ideologies with one that set up the demise of the middle class and the American dream.
Republicans are not to blame: Their old-school platform of a smaller federal government, fiscal conservatism, more power to the states, and belief that a lightly regulated path to working hard and standing on your own two feet is what made America the global bastion of entrepreneurship and helped create a middle class that is laudable and fair.
Those two parties, with their visions and flaws balanced by democracy and each other, made America great…at one time.
What really happened is that greedy, neo-con, profiteering crony capitalists hijacked the Republican party, while greedy, neo-lib, profiteering crony capitalists hijacked Democratic party. Together, as a new class of elites joined the Masters of the Universe, they began manipulating state apparatuses and banking for fun and profit.
At the point where this take over of the political parties happened was when the wealth migration to the top began, no matter which party was in control of the government. The policies became the same; make the few rich people much richer as quickly as possible.
The major tools used by the neo-cons and the neo-libs to engineer the wealth migration was bank deregulation. Of course, it goes without saying that behind it all were Presidents Ronald Reagan and Bill Clinton.
The neo-con Republican President Reagan set it off with the overturning of longstanding public and economic protections, starting with the Depository Institutions Deregulation and Monetary Control Act of 1980, a Trojan horse that let banks establish holding companies and gave the Fed more power over more banks.
That major deregulatory action was followed quickly by the Garn-St. Germain Depository Institutions Act of 1982, which leveled the playing field for banks and their holding companies experiencing competitive disintermediation and decreasing profitability.
This carried on under neo-lib Democrat President Bill Clinton under whom a series of subsequent rules- and regulations-trimming by banks’ congressional cronies culminated in the Gramm-Leach-Bliley Act of 1999, whose main function was the total repeal of the Depression-era Glass-Steagall Act that had for decades separated insured, deposit-taking commercial banks from swashbuckling investment banks.
That’s how elitist Democrats and Republicans paved a super highway for the financialization of the American economy and their enrichment from the country’s transformation.
Financialization is defined as the “growing scale and profitability of the finance sector at the expense of the rest of the economy and the shrinking regulation of its rules and returns.” The success or failure of the financial sector has had serious effect on the rest of the economy and most of its returns have gone to the wealthy which has driven inequality to the heights we see today.
As the New Deal regulations were slowly dismantled, by the aforementioned actors, the financial sector growth accelerated along with risks and speculation. The employment and total sales of the finance industry grew from 10% of GDP in 1970 to 20% by 2010. The emphasis was no longer on making things – it was on making money from money.
Without financialization, we never would have had the subprime mortgage crisis and the market and financial system crashes. This is because home mortgages used to originate locally, with banks, thrifts, and credit unions that knew their communities, as well as the value of properties and creditworthiness of borrowers in those communities. Mortgage loans mostly stayed on the books of lending institutions until maturity or until properties were sold.
That was great for stability and fairness, and making sure things remain sustainable… but the trouble was, no one got filthy stinking rich on it.
To cut a long story short, neo-cons and neo-libs took over the two political parties, and deregulated the banking and financial system. That gave birth to financialization which cut up what was once an economy for everyone, and handed it over to a few rich folks who now make out like bandits while everybody else struggles for crumbs.
So who were the faceless Republican and Democratic politicians who helped carry out the deregulations behind the wholesale transformation of America, and where are they now?
Well, many of them are still in Congress as your senators and House members. Others are cabinet secretaries and principal regulators. These so called guardians of American prosperity have become filthy rich at the expense of the middle class, on whose backs and from whose labor and savings they’ve enriched themselves (and their reelection war chests).
They’re still there in our government, plotting more ways to suck Americans dry while we fight over which political party is guilty, and which is not. It’s not the political parties that are responsible for the demise of America’s middle class, it’s the neo-cons and neo-libs who run them these days.
Americans need to be working to take the parties back and bring back the original platforms in order to get the economy working for everyone once again.