(This column has been modified to reflect that the author is a 19-year resident of Fairbanks.)
The Occupy Wall Street protests have spread rapidly across the country and Alaska by energizing a middle class that is struggling to survive in an economy that is increasingly rigged against them. For the last 30 years, working Americans and small business owners have fallen further behind as the multinational corporations and billionaires that buy influence within our government received no-bid contracts, bailouts, and immunity from many laws, taxes, and regulations.
Forty years ago, a single full-time job was enough to keep most families firmly in the middle class with a nice home, a good education, and a comfortable retirement. As wages stagnated and the costs of education, energy, and health care rose, families had to have two working parents, work more hours, and take on debt to stay in the middle class. Now, even these coping mechanisms are not enough. Median household income hasn’t increased over the last 15 years, half of all mortgages are underwater, and 20 percent of children live in poverty.
The decline of the middle class did not occur because we became a poorer country, it occurred because our economy stopped working for the middle class. GDP has continued to grow, productivity has climbed, and corporate profits and CEO pay are near all-time highs, but the share of income going to labor has plummeted because most of the gains of a growing economy have gone to make the top 1 percent even richer.
The root cause of our problems is that we have an electoral system that is fundamentally corrupted by powerful lobbyists and rich campaign contributors. Government decisions now consistently favor multinational corporations over small businesses, agribusiness over family farms, and the rich over the middle class.
Wall Street is the poster child of this system of crony capitalism.
The financial sector used complex derivatives, predatory lending, and hordes of lobbyists pushing deregulation to skim off 40 percent of all corporate profits in the U.S. without producing anything of value.
After their reckless gambling nearly destroyed the global economy, Wall Street was bailed out by the taxpayers, executives received multimillion dollar bonuses, and the middle class lost their house, job, and/or retirement savings. There still has been no accountability and no serious reform because as Senator Durbin said of congress, the banks “own the place.”
Globalization is another clear example. Economists claim that globalization is good for the U.S. economy because the loss of manufacturing jobs is offset by cheap consumer goods and increased corporate profits. In theory, it should make us all richer, but the people who lose their jobs are not the same people making the increased profits. So, working Americans are forced to accept jobs with low wages and no benefits in order to compete with foreign sweatshops while corporate CEO’s and large shareholders are taking, and keeping, the profits. These CEO’s get immensely rich by laying off American workers, moving jobs overseas, and evading taxes but politicians of both parties still push trade pacts without fair labor rules and refuse to close loopholes that allow offshore tax havens.
Everybody agrees that people who work hard and follow the rules on a level playing field should be rewarded, but too many people and corporations are getting rich by using lobbyists to privatize profits while socializing the costs. The result is that the 400 richest families have more wealth than 155 million Americans combined and yet hedge fund managers that make over $1 billion a year, over 2,200 times more than the president of the United States, get a special tax loophole that allows them to pay a lower tax rate than a teacher.
The problems in our country are systemic and bipartisan. We keep electing different politicians and parties, but the same people remain in charge. Our corrupt government has caused many Americans to become cynical and give up on representative democracy altogether. The occupy Wall Street protesters, to their credit, are not giving up. They are betting that the voices of the 99 percent can drown out the money of the richest 1 percent to make government work for us again. It is a long shot, but it is also the last hope for the American middle class.
• Prichard is a 19-year resident of Fairbanks