An Answer to the Liberal Narrative

We humans are social animals.  More than that, we are story-telling animals.  We tell ourselves stories about how the world came to be, how it works, and how it will be in the future.

In recent years our postmodern friends have told us that "narratives" are in fact apologies for power; they are stories put about by the ruling class to make their rule seem soft and cuddly.  You could say that a narrative is the velvet glove hiding the mailed fist of power.

Here's a liberal narrative, that I received today from a liberal I shall call "Pete."  I suspect that he read my screed on the Chicago teachers' strike.  Here's what he writes (the paragraphs are mine):

You look like such a nice guy. It makes me sad that you have become a public debater who always argues one side even though you know the other side has compelling arguments as well.

I was born in 1946 in Southern California. My pals and I knew there was such a thing as a millionaire but few names came to mind; Rockefeller, J. Paul Getty, Carnegie - that was about it. A lot of people had enough money to more than get by, they had enough for ball games, the fair, movies and summer vacations or trips to the beach.

No one asked for or demanded an outrageous salary because after the first $200,000 or after the first $400,000 the government took it all. The 91% tax wasn’t a tool to redistribute wealth, it was a tool to prevent individuals from earning million or multi million dollar salaries. The result was that everyone had more. Because upper management costs were low , more money went to capital investment, employees made more and everyone profited. From the 1940’s to the mid 1960’s the tax rate remained at 91% with a Republican President and a Democratic President and there was a healthy distribution of wealth. Movie stars didn’t ask for millions, nor did studio execs, producers etc and it didn’t cost $25 to see a movie. Athletes did ask for 20 million, managers weren’t paid millions etc and it was cheap to see a game.

This list goes on endlessly and every time someone demands and receives a disproportionate share of the money everyone else has to pay. The old networks can’t afford to show games. They go to cable where we pay for ESPN. The money goes from our pockets to ESPN to the Franchise and to the player. There’s an unbalance sheet, money keeps moving in one direction. The CEO of United Health is paid $36,000,000 a year. United Health doesn’t pay her salary they don’t have any money. We pay her, money out of our pocket, money into hers.

The explosive growth in salaries happened during Reagans terms in office. Rates were slashed controls were lifted and it was a fight to see who could be the highest paid exec, movie star, athlete, CEO etc. That was the beginning of class warfare in America. Not a shot was fired. No one showed up for the skins. That was the beginning of the end of the middle class in America. Who’s going to be the first trillionaire? Time magazines Woman of the Year.

There will be massive demonstrations, civil disobedience etc because the story is getting out. What’s going to happen is that tax on earnings over $5,000,000 will be again taxed in the 90% range, and even more draconian the Estate Tax will go through the roof. In making the justification case you are acting the Pied Piper and little good will come from that. What I don’t understand is why. Everyone doesn’t have good intentions maybe that’s the best answer.

Let's think about the answer to this narrative.  It's the answer, I suppose, that Mitt Romney dare not make.

• Yes, the immediate postwar period was a halcyon period in its way.  Except for Jim Crow in the South.  But it is also true that the economy was a kind of racket, run by big government, big corporations, and big unions.  In other words, if you were a little guy, you'd better keep out of the  way of the big bruisers.  As for the high tax rates, I recall that Ronald Reagan, a highly-paid Hollywood star just stopped working rather than pay the high taxes.  And as for the good jobs at good wages?  Let's not forget Michael Barone's comment:
  
  As it happens, I grew up in Detroit and for a time lived next door to factory workers. And I know something that has eluded the liberal nostalgiacs. Which is that people hated those jobs.
• There's a good argument to make that the "good jobs at good wages" era ended in the stagflation of the Carter era.  So Reagan didn't break a healthy system but tried to fix a broken one.  At any rate, according to the capitalist narrative, capitalism is "creative destruction."  Let us be clear what this means.  It means that the world is going to change, as old ways get demolished and get replaced by new ways.  Capitalism makes the offer that, if you submit to "creative destruction," then we will all prosper faster.  The liberal narrative about good jobs at good wages doesn't tell us what happens when things go wrong, when some brilliant government program or investment starts losing money year after year.  E.g., has the GM bailout really solved anything, or just kicked the ball down the road?  What do you do about Medicare and its $40 trillion unfunded liability?
  
  Thus the conservative narrative about the Reagan years is that the extraordinary profits came from extraordinary opportunities thrown up by the moribund economy at the end of the "good jobs at good wages" years.
• The question is: what comes next?  My emailer "Pete" looks to riots in the streets as people rise up against folks like the CEO of United Health that makes $36,000,000 a year. (But do you realize, Pete, that insurance companies are a peculiar product of the current crony capitalist health industry where we the people get to run around paying for our health care with the equivalent of someone else's credit card?)
  
  Frankly, I do expect riots in the streets.  The educated elite ruling class has promised benefits to its supporters that cannot possibly be paid.  Being expert politicians, they will probably succeed in creating scapegoats like Big Oil and Big Insurance.  No doubt, like the coal miners in Zola's Germinal, the rioters will burn down, in their rage, the very thing that provides them with work and life.

And then we have to figure out how to rebuild America out of the ruins.  There will be, of course, extraordinary profits to be made in the creative period immediately after the wholesale destruction.