Class Warfare in America: The Big Winners


Wherever there are people, there is class warfare even though we don’t want to think it exists. It is a result of human instincts to grab a bigger share of money or natural resources. Class warfare exists within a country and also between countries. As it continues to worsen, class warfare will culminate in a revolution where the existing ruling regime is toppled and replaced by a new one for better or worse.

Communist countries like to say they don’t have class warfare because everybody is made equal as a classless proletariat. However, they have created a new class, which is the communist party that rules over all the rest. Within the communist party, there is class warfare between the different layers as members fight for power and control. Besides, there is class warfare among the people trying to court favors from different layers of the communist party.

Capitalist countries are no different. They claim that people get rich because they work harder and smarter. This is true to a certain extent. Nevertheless, when you get richer to a higher level, you will belong to a new class full of privileges such as market size able to crush your competitors; preferential treatment by banks and business associates; hired guns ready to serve your needs; and the ability to bribe government officials to get what you want. In a capitalist country, market competition cannot solve the inequality and class problems. The rich tend to get richer and the poor poorer through economic Darwinism.

Class warfare used to be a minor issue in America because it is a land of opportunity where people get rich by opening new frontiers and inventing new ways of doing things. Yet, the American Dream appears to be increasingly out of reach.  In recent decades, pro-business government policies, especially tax cuts for the rich and relaxed business regulations, are bringing class warfare to the surface. The following are the major players that are winning the game:

The relentless rise in oil prices since the OPEC embargo of 1973 puts a brake on the US economy that mostly runs on oil. The rise in gasoline prices makes life increasingly tougher for the consumers, but it brings huge windfalls to the oil companies. Every politician pays lip service to committing to reduce oil dependence, but no serious policies have been enacted. Why? The oil companies are determined to keep the oil and money flowing with their deep-pocket influence on politicians. This has frustrated the development of alternative energy for decades.

The power of the defense and weapons industries is too big to ignore. It is demonstrated by their influence on foreign policies regarding wars and military assistance. As you know, the US has waged numerous wars of choice (not of necessity) under false pretense, the two major ones being Vietnam and Iraq. Although being complete failures in terms of human and material costs, the wars of choice have created huge profits for the defense contractors. Furthermore, in the current effort to cut federal deficits, most politicians dare not talk about cutting defense. Why? The powerful defense contractors are watching over their shoulders.

No other industry has the widespread influence comparable to the big banks and Wall Street because they deal directly with money. They constantly want reduced government regulations to let them operate with a free hand. The big banks got what they wanted during the Bush years. The consequence is the financial meltdown of 2008 due to reckless lending in the housing market. The financial meltdown brought about the current big recession from which the world is still recovering after all these years.

The medical profession is a big winner especially the drug companies, the health insurers, and the hospitals. They have profited in the runaway health care inflation for more than two decades where health care costs keep rising much faster than the rate of general inflation. The power of the drug companies is demonstrated in the so-called Prescription Drugs for Seniors enacted by the Bush Administration, where the government pays for the costs of senior citizens but cannot question the prices that the drug companies charge.

Finally, there is a group of successful companies that are able to harness the market phenomena of the 21st century — globalization, the Internet, mobile technology, and social media. These companies include: Apple, Google, WalMart, McDonalds, Coca Cola, and a host of others. They have achieved expanding their markets from local to global. They have also achieved large cost reductions by shifting manufacturing to low-cost countries. You cannot blame these multinationals for outsourcing jobs overseas. They are only doing their best to compete in the global market. As expert survivors, these companies don’t need to employ deep-pocket influence on the government at home like their business counterparts.

I have just identified the big winners of the class warfare in America. They have made tremendous profits even during the current recession. The government is either colluding with the big winners or kowtowing to their demands. This has created an unprecedented income gap between rich and poor, thus giving rise to the Occupy Wall Street movement that pits the ordinary 99% against the rich 1%. In my next essay, I will talk about the ordinary citizens who wind up being the big losers in the class warfare in America.

September 2012

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About stockfessor

I like humors, music and karaoke.
This entry was posted in 21st Century, Business/Investment, Economics/Politics. Bookmark the permalink.

One Response to Class Warfare in America: The Big Winners

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