Loyola University Chicago Loyola eCommons School of Business: Faculty Publications and Other Works Faculty Publications 10-2018 The Creation and Destruction of the Great American Middle Class (1930-2010) Stanley F. Stasch Loyola University Chicago, [email protected] Follow this and additional works at: https://ecommons.luc.edu/business_facpubs Part of the Finance and Financial Management Commons, and the History Commons Recommended Citation Stasch, Stanley F., "The Creation and Destruction of the Great American Middle Class (1930-2010)" (2018). School of Business: Faculty Publications and Other Works. Paper 5. http://ecommons.luc.edu/ business_facpubs/5 This Book is brought to you for free and open access by the Faculty Publications at Loyola eCommons. It has been accepted for inclusion in School of Business: Faculty Publications and Other Works by an authorized administrator of Loyola eCommons. For more information, please contact [email protected]. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License. © 2018 Stanley F. Stasch. (CC Licensed) Stanley F. Stasch Professor Emeritus Loyola University Chicago THE THIRD EDITION THE CREATION AND DESTRUCTION of the GREAT AMERICAN MIDDLE CLASS (1930-2010), and … …the Second, Conservative Great Worldwide Depression In Less Than Eighty Years A Free, Online American History Course* Stanley F. Stasch, Ph.D. Professor Emeritus Quinlan School of Business Loyola University Chicago *The equivalent of a 200 page book Stanley F. Stasch Professor Emeritus Loyola University Chicago INTRODUCTION TO THE THIRD EDITION This third edition of “The Creation and Destruction of the Great American Middle Class: 1930-2010” was written because four important matters, which should be a part of this history, were not included in the earlier editions. Although the first amendment of the U.S. Constitution clearly states that “Congress shall make no laws respecting the establishment of religion,” religion and/or religious clerics and/or religious institutions became significant factors in the U.S. political process and, as such, played very important roles in the destruction of the great American middle class. This important aspect of influencing government policy- making was brought to light in 2015 by the publication of Kevin Kruse’s fine book, One Nation Under God. Both President Eisenhower and the 1950s Congress invited Christian clerics and the Christian religion to participate in governmental activities. That official beginning emerged out of the 1930s-1940s efforts by prominent business executives to claim that the free enterprise system was a gift from God, and that President Roosevelt’s New Deal Programs were the work of the Devil. These events eventually enabled Christian evangelicals to take “moderate or strong” political control of some 30-40 state legislatures. As Christian evangelicals and the Republican Party strengthened their alliance over the years, that development led to the gerrymandering of U.S. Congressional district boundaries in many states, and that resulted in the Republican Party taking firm control of the U.S. House of Representatives. Republican control of the House throughout most of the 1990s and 2000s contributed very significantly to the great growth of income inequality during those decades, and religion in politics made that possible. Although the first two editions included some discussion of the emergence of private equity firms, such firms were not highlighted nearly to the extent that they deserved. This is the second of the four important matters noted in the first paragraph above. Private equity firms contributed to the destruction of the great American middle class because of their harsh treatment of the employees in the firms they acquired and of the communities in which those firms were located. But those types of firms also gave their owners huge tax breaks which, when combined with the wealth created by their harsh treatment of employees, made their owners astronomically wealthy. There were thousands of such owners, and those owners used their wealth to financially support the gerrymandering efforts noted in above paragraph. In 2016, Jane Mayer published her excellent book, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right.” Her story describes the third important matter that should be part of this course. Charles and David Koch made their billions in the fossil fuel industries, predominantly coal and oil. They invited numerous other billionaires to join with them in financing various quasi-political organizations and activities designed to reduce their taxes and to completely dismantle the government regulations imposed on the industries that were the sources of their wealth. For example, in the early years of the 2000s, polls showed that more than 70 percent of the population favored regulating carbon emissions that caused global warming. Koch-brothers-sponsored organizations reportedly spent hundreds of millions of dollars discrediting environmental scientists and their findings. They were successful! By 2010, 48 percent of the population reported that global warming was “greatly exaggerated.” Those Koch- led billionaire groups were using their wealth to change public opinion in their favor, and to elect Congressional candidates who would lower their taxes and do their bidding. Those billionaire groups are Introduction - 1 Stanley F. Stasch Professor Emeritus Loyola University Chicago extremely wealthy, and they are not going to stop trying to use their wealth to their favor and to the detriment of the general population. Reportedly, each of the Koch brothers’ wealth grew from $14 billion in 2009 to over $40 billion in 2015. While earlier editions discussed the main causes of the decline of labor unions, they did not present important details as to how that was done. This is the fourth matter noted above. New research uncovered contemporary books by Thomas Geoghegan and Michael Goldfield that addressed that topic. They reported how, under President Reagan’s administration, the National Labor Relations Board was illicitly transformed from an agency specifically authorized to help workers organize into labor unions, into one intentionally devoted to working directly in opposition to that very goal. That led directly to the destruction of labor unions and, hence, to the destruction of the great American middle class. Books That Encouraged the Third Edition Kevin M. Kruse, One Nation Under God: How Corporate America Invented Christian America, (Basic Books, 2015). Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, (Doubleday, 2016). Thomas Geoghegan, Which Side Are You On? Trying to be for Labor When It’s Flat on Its Back, (The New Press, 1991). Michael Goldfield, The Decline of Organized Labor in the United States, (The University of Chicago Press, 1987). Stanley F. Stasch September 2018 ([email protected]) Introduction - 2 Stanley F. Stasch Professor Emeritus Loyola University Chicago INTRODUCTION TO THE EXPANDED EDITION This expanded edition of “The Creation and Destruction of the Great American Middle Class (1930- 2010)” includes sixteen instances of “stealth government actions taken against the American people.” One section in Chapter 35 of the course describes how “the uninformed/misinformed public contributed to the destruction of the middle class.” Americans have a civic duty and a personal responsibility to avoid being uninformed about government matters that affect them. In many cases, therefore, if individuals are uninformed, it is through their own choice. But much of what happens in government occurs “behind the scenes” or “in the dark,” in such a manner that the citizenry is deprived of accurate information about matters of importance to them. In situations like that, citizens are deliberately “misinformed.” Typically when that occurs, a special interests group influences the government to do something that favors its welfare. Alternatively, sometimes the special interests group convinces government to do nothing that prevents the special interests group from taking some action that is beneficial to itself but harmful to others. Both of those types of events receive little or no publicity that brings them to the public’s attention in a manner that causes the citizenry to be broadly and fully informed. In such situations, the U.S. Government acts as a “stealth government” working against the general welfare of the American people. During the most recent four decades (1970-2010) there were at least sixteen occasions when the U.S. Government acted in this manner. Many of those events were actions taken by the government, but occasionally they were only the quiet absence of any government action when some kind of action would have been appropriate “to promote the general welfare” and/or “to establish justice,” which are two of the six explicit goals of the U.S. Constitution. Those events were not included in the original edition of the course because—I believed at the time—they might have had a confusing effect on the main story of the cause of the destruction of the great American middle class. Any one of those sixteen events, by itself, would not have had the power to destroy the great American middle class. But when several of them were working together, they became a force that created greater income inequality. Sixteen such events are described in this expanded edition, and together they represented a powerful set of forces that worked to create even greater income inequality. Consequently, they should be part of this history because they tell the story of how “stealth government” worked against the general welfare of the American people by taking money from lower and middle class citizens and distributing it to selected members of the upper class. Such governmental activities can rightly be labelled “welfare for the rich.” The original edition of the course tells the main story of how the business community/Republican Party/ conservative Democrats faction (“the faction”) engineered the destruction of labor unions in the private sector, which then led to the destruction of the great American middle class.