February 25, 2018
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America’s Social Compact in tatters

By Lynn Parsons, Special to the BDN

Robert McElvain’s column “Prescription for disaster” in last Friday’s Bangor Daily News should be required reading for anyone interested in a rational overview of the nation’s debt crisis. McElvain is a respected scholar, not a partisan propagandist. He correctly points out that President Barack Obama’s predicament comes not from too much spending, but from too little. But there are a few facts that he might have added.

In 1945, at the end of World War II, the national debt stood at 118 percent of the national income. Did the world come to an end in 1946? No. Why?

Because for the next 36 years, presidents and Congresses from both parties followed economic and social policies that grew the nation’s economy faster than its debt. It did so through wise spending such as the GI Bill of Rights, the interstate highway system, Medicare, Medicaid, Head Start, Food Stamps, the Women, Infants, and Children program and a host of similar expenditures.

Behind all of this was an unstated Social Compact that acknowledged that those who had much had a moral and fiscal responsibility for those who had little. It assumed that in a real democracy government could, and should, play a role in smoothing away the rough edges from competitive capitalism, so that capitalism’s undeniable successes would not be marred by increased economic inequality, nor by growing social alienation.

What was the result? When the much-reviled Jimmy Carter turned the White House over to Ronald Reagan in 1981, the national debt had dropped to 33 percent of the national income.

Then class warfare began. Behind Reagan’s appealing persona and sunny disposition lay a well-planned effort to attack, undermine and ultimately destroy the Social Compact. And it is still going on today.

The attack had three elements. First, strengthen the strong by granting them relief from their tax “burden” so that the proportionate cost of government would be transferred from them to the middle and working classes.

Second, attack organized labor and its allies through both legislation and regulation, so that one of the most important supporters of the Social Compact would be permanently weakened.

Third, pack the courts and federal regulatory agencies with enough ideologues committed to undermining the compact, so that laws and institutions committed to defending public interest against private greed would be permanently marginalized.

This is nothing less than class warfare, and most of us are losing. Consider the following results:

1. When George W. Bush and the class warriors handed the White House over to Barack Obama, the nation’s debt had skyrocketed to 70 percent of the national income: the result of unneeded tax breaks, submissive federal regulators and blank checks handed to the military. (He also passed on two futile and unwinnable wars and the worst financial crisis since Herbert Hoover turned the White House over to Franklin Roosevelt in 1933.)

2. Wealth inequality in America is now the greatest it has been since the 1920s. The richest 1 percent control 34 percent of the nation’s wealth, and the richest 10 percent control 72 percent.

3. While CEOs have seen their salaries and bonuses rise to stratospheric levels in the midst of others’ misery, the real value of wages paid to American hourly workers has remained the same as it was in 1980.

4. In 1980, the United States ranked 16th among the world’s nations in its infant mortality rate. By 2009 it slipped to 34th, just behind Croatia and Cuba. Today, life expectancy ranks us 50th in the world, behind all of Western Europe, Japan, Australia and New Zealand, but just ahead of Taiwan.

5. To entrench themselves against any future revival of the Social Compact, today’s class warriors propose to do away entirely with the tax on inheritance, have proclaimed that speech and money are the same (and therefore cannot be restricted in political campaigns) and have launched an attack on practically everything with the word “public” in front of it: schoolteachers, judges, librarians, social workers and universities, to name just a few.

6. Obama seems to be ready to join the class warriors by slashing elements of the compact. If he does, he will betray the thousands who came to Grant Park in Chicago in 2008 to cheer his election and the millions who came to Washington in 2009 to see him inaugurated.

7) Maine’s own class warriors have not been idle, either. This year Gov. Paul LePage and his allies increased the disposable income for the richest Mainers by lowering their state taxes, while subtracting from the disposable income of public employees by raising their contributions to their pensions. And next year they plan to go after organized labor.

Ironically, most of today’s class warriors profess to be Christians, accepting Jesus of Nazareth as their “personal savior.” But you will not hear them quote the founder of their religion in his Sermon on the Mount, when he famously blessed the poor and the peacemakers, and said it was easier for a camel to go through the eye of a needle than a for rich man to enter the Kingdom of Heaven.

In his final book, written as he was dying from Lou Gehrig’s disease, the essayist and historian Tony Judt despaired of the nation’s future, and quoted the English poet Oliver Goldsmith:

“Ill fares the land, to hastening ills a prey

Where wealth accumulates, and men decay.”

Lynn H. Parsons of Castine is professor emeritus of American history at the State University of New York, College at Brockport and co-chairman of the Social Justice Committee of the Unitarian Universalist Congregation of Castine.

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