The first Monday in September is traditionally reserved for the celebration of American working men and women. It has always been a trade union holiday and that way it is akin to the Socialist May Day celebration in Europe — even though that labor holiday, too, originated in the U.S. back in 1886.
Labor Day is a good time to ask a few stupid questions. Like: Was General Dwight D. Eisenhower a communist? Or Richard M. Nixon a lefty?
Of course not. And yet domestic policies that all American presidents pursued between 1932 and 1980, both Republicans and Democrats, is what in today’s America is labeled communism or radical left.
While fighting the Cold War against Soviet communists, the United States had high taxes — and in particular, it certainly did “soak the rich.” The top individual income tax rate was 90 percent in the 1950s, dropping to 70 percent in the 1960s, more than twice as high as it is today. And the rich actually did get soaked: they paid what they owed since there were very few loopholes or tax shelters.
Those taxes went to work, benefitting the common man. A network of interstate highways was built, War on Poverty was waged, kids got job training paid for by the state and, thanks to generous government assistance, almost everyone in the country could afford to go to a top private college as long as they had the brain. The Labor Department strongly supported trade unions which fought for better wages and working conditions as well as safety in the workplace.
All that spending — and yet federal debt was being steadily paid down at the same time: it shrank from 108 percent of GDP at the end of World War II to just 30 percent by the time Ronald Reagan came into office in 1980.
All that time Soviet propaganda kept promoting Marxist dogma, claiming that under capitalism the proletariat will get progressively impoverished. Quite a few American workers believed that before World War II — not just in the Depression-ravished 1930s, when membership in the communist party peaked, but in the roaring 1920s as well. In fact, the first Red Scare in the United States took place in 1920, resulting in the arrest of some 3,000 American Communist Party activists.
In 1959, during the short-lived Nikita Khrushchev thaw, the United States government held a national exhibition in Moscow. It included a model home that the US government claimed everyone in America could afford. Khrushchev was particularly impressed by its kitchen, filled with a variety of exotic appliances such as the dishwasher, the fridge and the blender. He couldn’t believe that it was a typical kitchen in the home of an American industrial worker and he confronted Nixon, then Eisenhower’s vice president, in a series of what became known as “Kitchen Debates.”
But that was, by and large, true. In the early postwar decades, American blue-collar workers owned their houses, each family had a couple of cars, they took nice vacations, and confidently expected their kids to do even better than they in the future.
Back then, all those things were unattainable luxuries not just in the Soviet Union or the People’s Republic of China, the supposed workers’ paradise, but in Western Europe, as well.
As a result of such policies pursued by the federal government, Americans became a nation of the middle class. And, ironically, those “commie” policies won the hearts and minds of the Soviet people, allowing Washington to win the Cold War, as well.
But having won, America moved decisively to the right. In fact, the US government clearly felt it didn’t need any of that anymore. Capitalism showed its ugly laissez-faire, dog-eat-dog face. Incomes were allowed to stagnate, industrial unions were hounded out of existence and high-paying jobs disappeared.
Instead of an economy tempered and directed by the wise hand of a moderate government, the radical free-market ideology took over, with finance capitalism reigning supreme, just as Marx had predicted it would almost two hundred years earlier.
America now has an economy in which the rich get richer out of speculative asset price bubbles, paying little or nothing in taxes to the system in which they make their money. And whenever those bubbles burst, each successive crisis makes them even richer and the poor poorer. That was what happened in 2008, and, to an even more shameless degree, in the 2020 pandemic.
This happens because instead of taking care of the average American, the government and the central bankers bail out those who are responsible for causing the crises in the first place. And, moreover, they do it at taxpayer expense. Each crisis is resolved with the infusion of government funds to support bankrupt financial institutions and financial markets. Public debt, for which every American man, woman and child is responsible in equal measure, has ballooned and will surpass the size of America’s GDP next year for the first time since World War II.
The U.S. economy has thus become an engine for transferring public funds to private pockets, even as the country sinks lower and lower, reaching Third World status on such measures as disparities between the haves and have-nots, health care, poverty levels and even hunger.
This year’s Labor Day, even before the botched pandemic, you had little to celebrate unless you labored on Wall Street or in the Silicon Valley. The Economist’s Where-to-be-born quality of life Index places America in sixteenth place — below all Northern European countries, on par with Taiwan and a notch above the United Arab Emirates. Worse, the Social Progress Index, developed using the input from a number of Nobel Prize-winning economists, found this year that only three countries in the world — Brazil and Hungary along with the US — have seen their quality of life decline since 2011.
America did win the Cold War against communism by taking care of its own people. Now, by telling the people to go to hell, it seems determined to snatch defeat from the jaws of victory.
