01 Nov Leo Gerard – Sacrilege: Wall Street Worship
Americans have been worshiping a bull. Too many citizens, and particularly politicians, prostrate themselves to Wall Street’s bronze idol.
They revere financial titans who pay themselves and their minions millions to manipulate money and gamble recklessly. Politicians gave tribute to the financiers with tax breaks and bailouts when the bankers’ bad bets threatened to bankrupt their institutions.
This false idolatry produced a nation gripped by massive unemployment, a nation in which destructive income inequality has risen beyond robber baron levels, a nation where greed has been perverted from sin to good, a nation where politicians genuflect to money changers, not majority citizens.
Salvation for the majority is not more failed trickle-down economics or more deregulation so that Wall Street can resume committing unfettered wagering. Redemption is political and economic systems devoted to serving the common good, not the affluent few.
These concepts — that governments should protect majorities and that the international financial collapse is an opportunity to transform the system into one supporting a more fraternal and just human family — are contained in a report released last week by the Pope’s Council for Justice and Peace. It says:
“The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence.”
Those values mandate economic and political systems that transcend “personal utility for the good of the community,” the report says, then adds:
“The primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics, which is responsible for the common good – over the economy and finance.”
This is exactly what the 99 percenters — the Occupy Wall Street activists of every faith — have been saying. They want systems that work for the vast majority of citizens, not just the 1 percent at the top.
A day after the Pontifical Council reported that inequitable distribution of wealth has increased both between individuals and nations, the non-partisan Congressional Budget Office documented a massive spike in income inequality within the United States from 1979 to 2007.
The household income of the nation’s richest 1 percent grew 275 percent during that nearly 30-year period, according to the CBO report.
By contrast, the income of the middle class rose by one-seventh of that — 40 percent. For the poor, the increase was one-fifteenth of that for the rich — only 18 percent over 30 years.
The result is that the richest 20 percent of households got more money in those 30 years than the entire bottom 80 percent. That is redistribution of wealth – moving it from the poor and middle class to the richest.
The CBO study cites several factors contributing to the rising inequality, including federal tax policy. The CBO says tax policy fed inequity as the incomes of the wealthiest rose astronomically and their federal tax burden shrank.
This pattern is consistent internationally. The Organization for Economic Cooperation and Development determined that from the mid-1980s to the mid-2000s income inequality increased in three-quarters of the 30 developed countries studied.
If basic morality fails as a reason to reverse these trends, then the Pontifical Council suggested another. Such inequality leads to instability and violence:
“If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid.”
So far, the violence surrounding the 99 percenters in the “Occupy” movement has come from the government and police and not the other way around, thus the photos and videos of defenseless women pepper-sprayed by an officer in New York and a bleeding, critically-injured Iraq war veteran struck down by police in Oakland.
Historically, it wasn’t always that way. During another spike in the nation’s history of income inequality, in the first two decades of the 1900s, violence was turned on the rich. An anarchist shot robber baron Henry Clay Frick and bombings terrorized industrialists. As the socialist movement surged, Andrew Carnegie wrote that the gulf between rich and poor threatened the survival of capitalism.
Also ignoring morality, just consider that income inequality impedes economic development. An International Monetary Fund study found high levels of inequality retards economic recovery while relatively equal income distribution supports sustained growth. Numerous academic studies have reached the same conclusion – inequality diminishes economic expansion, for many reasons, including its tendency to provoke political and social unrest.
Yet conservative politicians continue to demand changes that would make matters worse. Candidates Herman Cain and Rick Perry, seeking the Republican nomination for president, have proffered flat tax plans that would compound the burden on the middle class and poor. On being informed that his would increase income inequality, Perry said, “I don’t care about that.”
When Democrats on the debt-reduction super committee suggested raising $1.3 trillion in tax revenues, including levies on the rich, a measure consistently supported by huge majorities of the American public, Republicans summarily rejected the proposal, calling it absurd.
The answer to the question, “What would Jesus do?” in this case is clear. The only gospel story in which Jesus engaged in violence is the cleansing of the temple of moneychangers. Morality demands an end to Wall Street worship and a new era in which both politics and financial markets work for the majority, for the common good.
Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. He serves as co-chairman of the BlueGreen Alliance and on the boards of Campaign for America’s Future and the Economic Policy Institute. He is a member of the IMF and ICEM global labor federations and was instrumental in creating Workers Uniting, the first global union. Follow @USWBlogger