The Occupy Movement – People Power Redux

The Occupy Wall Street movement that started at Zuccotti Park in the financial district of New York City on September 17 and that has since spread to 70 major American cities and 600 communities throughout the U.S. is the 2011 reiteration of the People Power movement that swept through the Philippines, Taiwan, South Korea, South Africa and all over Eastern Europe and the Soviet Union in the 1980s.

In all these cases, the countries were ruled by oligarchies composed of only 1% of the population but which owned at least 40% of the wealth.

The U.S. was immune from People Power because the income disparity in the U.S. —when Marcos was overthrown in 1986 — was “relatively” equitable with the top 12% of Americans controlling just 33% of the nation’s wealth.

But that statistic has changed dramatically. According to the U.S. Congressional Budget Office (CBO), in findings that were culled from the Internal Revenue Service (IRS) and released just this week, in the last 25 years, “Income for the top 1 percent of U.S. households grew by 275 percent, four times the increase for the next highest group, and 15 times that of the lowest income group.”

So now, as it was in the 1980s when People Power swept away the oligarchies of their countries in Asia, Africa and Europe, the top 1% of Americans now also own at least 40% of the nation’s wealth. The economic disparity chickens have come home to roost.

As Joseph Stiglitz observed in this month’s issue of Vanity Fair (“Of the 1%, by the 1%, for the 1%”), “while the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous – 12 percent in the last quarter-century alone. All the growth in recent decades has gone to those at the top.”

Americans used to believe, as Pres. John F. Kennedy once said, that “a rising tide lifts all boats”, that if the American economy improves, everyone benefits.

But somehow, in the last 25 years, the rising tide started to lift only the yachts of the top 1%. The rising tide caused the boats of the middle class and the working class to tip over and sink with much of 99% of the people forced to cling to their life boats.

The fingers of blame have often pointed to globalization which saw the outsourcing of high-paying manufacturing jobs in the US to China and the rest of the Third World where wages are dirt cheap.  Others attribute this decline to advances in labor-saving technologies that reduced the demand in the U.S. for well-paying blue-collar jobs.

In his latest book, “That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back”, Thomas Friedman explains that the way the US got out of this inequality in the 20s and 30s was for government to invest in infrastructure, education, and technology.

As Stiglitz wrote in Vanity Fair, “The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.”

Unfortunately, the 1% of Americans who control the economy do not like to spend money on common needs.  “The rich don’t need to rely on government for parks or education or medical care or personal security – they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government – one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good,” Stiglitz noted.

Just 40 years ago, the top 1% used to pay a 70% tax on their income. This tax rate was greatly reduced under successive Republican Presidents Ronald Reagan and George H. Bush.  Pres. Bill Clinton held the line at 39% resisting enormous Republican pressure to lower the tax rate for the top 1% even more. By holding the line at 39% tax on the top 1%, Clinton was able to balance the budget and deliver a $400 billion surplus to his successor.

In two terms in office, Pres. George W. Bush squandered the surplus by reducing the tax rate to the top 1% down to 35% with his tax cuts for the wealthy that promised growth. The substantial reduction in tax revenues to the government, as well as the two wars in Afghanistan and Iraq, led to the massive economic meltdown of the U.S. economy and to the current $13 trillion deficit.

The tax cuts for the top 1% did not produce growth as Bush promised it would. Instead of going back to the Clinton tax plan of 39% that actually produced growth, the Republican presidential candidates want to lower the tax rates for the wealthy even more.

This week, Texas Gov. Rick Perry unveiled his “flat tax” proposal that would end taxes on estates, dividends and capital gains and would lower the tax rate of the wealthiest 1% from 35% to 20% and increase the tax rate of what’s left of the middle class.

Republican Tea Party favorite Herman Cain would go even lower by reducing the tax rate down to 9% as his vaunted 9-9-9 plan promises to do.

Under the Perry and Cain plans, there would be virtually no money for infrastructure, education or research and development and there will be wholesale cuts to social security and Medicare.

Americans in the top 1% certainly have their champions in the Republican presidential candidates. But who champions the 99%?

The answer came on September 17 when the Occupy movement began in Zuccotti Park.

In less than a month, the Occupy movement has drawn the support of a majority of Americans. The October 13 Time Magazine survey showed that 54 percent of Americans have a favorable impression of the Occupy Wall Street protests, while only 23 percent have a negative impression. A National Journal Congressional poll found that 59 percent of Americans agree with the movement with 31 percent in disagreement.

On September 29, 2011, the protestors at Zuccotti Park issued their first collective statement, which many compare to the American Declaration of Independence in 1776.

“As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies.

As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known.”

The People Power of the 1980s and the Arab Spring of 2011 have arrived in the U.S.

(Send comments to [email protected] or mail them to the Law Offices of Rodel Rodis at 2429 Ocean Avenue, San Francisco, CA 94127 or call 415.334.7800).