For the public's benefit, conservatives are shrugging their shoulders and expressing puzzlement. It's as though they have no idea why the incomes of middle and low income Americans are stagnating.

     Somehow workers have found themselves in a world market, and with no negotiating power. It must have been caused by the movement of the stars. Or an unusual economic phenomenon. Or a happenstance evolution of the economy.


     If you drive a truck, work on an assembly line, wait tables, type reports, or are in a job that requires manual labor and has few formal educational requirements—and you don't know why your wages are stagnating—you had better read what conservatives wrote in our most prestigious financial publications in the mid-1990s.

     The mid-1990s are important because those were the years when conservatives expressed their true values. The unemployment rate was going down to below 6%, and they openly debated about the best ways to keep wages from going up.

     So, if you really want to know what the true strategies of conservatives, and their intended consequences, read on:



Increasingly, companies are giving hiring bonuses to attract skilled workers. This has a one-time impact and avoids raising actual wage rates. Nevertheless, note that by December average hourly earnings for production workers were increasing at around 3% annual rate. That is up from around a 2.2% annual rate 12 months earlier.

Forbes Magazine, January 30, 1995

     When a few skilled workers get a little additional income, it's "ugly"? You can count on it: when the 160 partners of Goldman Sachs each got a $5,000,000 bonus for 1993, Forbes didn't consider it ugly. And Forbes is in the same crowd that says that anyone who criticizes the incomes of our highest paid citizens is "envious of the rich."


Are too many Americans at work these days for the economy's own good? Absolutely says Martin Feldstein... "We are...into the danger zone." Nonsense, retorts Dana Mead...Economists who talk that way...don't understand how American companies have tied wage increases to productivity gains, shifted work overseas and learned to produce more with fewer people.

Wall Street Journal, January 24, 1995

     Bear in mind: These guys are debating about whether or not the Fed should stomp harder on working class incomes by raising the prime interest rate. It's a delicate balance. They want corporations to flourish and investors to become wealthy, but not so much that benefits might trickle down to workers. That could be inflationary.


The 'Nineties,' need we remind you, are a period of insecurity and cost control, a time when workers feel lucky to have a job, let alone one that pays well...If American labor sought inordinate increases, manufacturers could simply move production abroad and employ foreign labor at a far cheaper rate.

Barron's, May 30, 1994

     What great news! The final solution! If raising the prime interest rate doesn't keep workers' wages low, we can always ship their jobs overseas--and everyone knows it.


Labor markets are their tightest in five years...labor costs are growing at the slowest pace on record...Puny pay gains among union members make it hard to see how any upward push on wages will gel among workers generally.

BusinessWeek, May 8, 1995

     What a relief. Even labor unions know they can no longer bargain for higher wages. (Oh, by the way, if you ever doubted the beneficial effects that unions have had on wages throughout our history, even for non-unionized workers, note that Business Week sees the connection.)

What Conservatives are Unintentionally Telling Us

     Remember, these publications and their patrons are not innocent bystanders in our "free" economy. They are consciously, deliberately, and ruthlessly pursuing a planned strategy to keep wages as low as possible for workers, and profits for investors and the established wealthy as high as possible.

     They do it by getting politicians elected to office who enact policies that redistribute the wealth from middle and low income Americans to our wealthiest citizens. These politicians manipulate the prime interest rate, make workers vulnerable to the most vicious competition from other countries, oppose all pro-labor legislation, and stack the courts with conservative judges who always find in favor of corporations in disputes with workers—among other things.

     And how have these people been getting their favored politicians elected in the 80s and 90s? By conning the public—in the very same ways they conned the public in the late 20s and the mid 40s.

     Well financed conservative think tanks like Empower America, The Heritage Foundation and the American Enterprise Institute, and propagandists like Rush Limbaugh, Mona Charen and George Will, breathed new life into the same old cliches that got us into trouble before: wealth trickles down, higher taxes on our richest citizens causes joblessness, wealth is not a zero-sum game, government regulations destroy the free market, unions are bad for the economy—and on and on.


     Incidentally, if you are not too concerned about what is happening to working class Americans, watch out. According to the American Management Association, 54.6% of jobs cut by 400 large corporations in the 12 months ending in June, 1993 were in mana gement, supervisory, technical and professional positions.

     In addition, because of computers and satellite technology, high skill jobs are now going overseas. Engineering tasks, computer programming, product design, and all kinds of advanced technical projects can easily be transported to other countries with lower wage rates. Even clerical tasks are now being shipped to other English speaking countries.

     Despite these developments and their obvious cause/effect relationships, accomplished propagandists have been able to misdirect the anger of an astonishing number of Americans. A leader of a state militia group recently complained that the stock market is making new highs, and pay and working conditions for our lowest paid citizens are steadily getting worse.

     Although he denounced what happened in Oklahoma City, he said that the anger against the government is justified. I agree, but too many people have identified the wrong part of the government.

     The fundamental cause of the deteriorating quality of life for the bottom half of Americans is not the government workers who deal with the public. Certainly the BATF, FBI, IRS, the Forest Service and so on make mistakes, but they in no way are responsible for the huge income disparity between the rich and everyone else. Our main problem isn't even welfare, crime, or government waste and fraud, although they certainly are issues that need to be seriously addressed.

     Our most basic problem: the politicians who ruthlessly control economic conditions in our country in order to favor the established wealthy, the highly educated, and the entrenched powerful—at the expense of those who truly work the hardest for an honest living. The "family values" of too many politicians today are limited to the families of those who have the most power and who make the biggest cash contributions.

     These politicians place working class Americans into the same category as machinery—a cost of production to be minimized. The welfare of their families is irrelevant. Since their work can now be done by the most brutalized people elsewhere in the world, they are, in effect, no longer to be valued as important human contributors to our society.

The Basic Questions

     So, who created the income disparity between the top 20% of Americans and everyone else? Think about it. Which politicians say: benefit me and the rich first and wealth will trickle down to you? That's been our nation's motto since the 80s began (as it was in the 20s). Which politicians say: benefit low and middle income people first, and wealth will percolate up? That was the predominant motto from the mid 30s to the 80s. And which was the better period for most Americans and our nation as a whole?

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