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Slick, the Chumps and the Bars: How the Free Market Is Sucking the Middle Class Dry

Tuesday, 17 September 2013 09:18 By John F. Miglio, Online Review of Books & Current Affairs | Op-Ed
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OK, by this time you've read enough articles written by liberal and mainstream economists about how the middle class is being squeezed by the free market, how workers' jobs are being outsourced and lost to automation, and how the disparity in wealth between the super rich and everyone else has reached epic proportions. You've also read the counter arguments proposed by die-hard libertarians and Ayn Rand acolytes who maintain that all of society's ills stem from Big Government.

It's been my experience that in order to truly understand a problem, you need to either live through it yourself, or understand it on a level that resonates with your own personal experience. So with this in mind, let's analyze our current economic situation vis-à-vis a simple example that cuts through all the arguments and charts and statistics and gets to the heart of the matter.

Here's the setup: Ten guys (or gals) are old friends who have been playing poker every Friday night for decades. Each one brings $100 to the game. Over the decades, every time they play, each player either wins a little or loses a little.

On the way home from the game, each player stops in his local bar, has a beer and a sandwich, and spends $20. As a result, the owners of ten bars count on making money every Friday night from their steady poker player patrons. It's been that way for decades and the bar owners have become friends with their regular customers.

Everybody is happy. Then one day one of the players (we'll call him Slick) serendipitously bumps into a professional poker player who shows him a foolproof trick to stack the odds in his favor and beat the average player at poker every time.

Although he is not convinced it will work, Slick takes his inside knowledge to the next game, and sure enough, he wins all the money ($900) from his fellow players (we'll call them the Chumps). On the way home that night, instead of spending his usual $20 dollars at his local bar, Slick celebrates his good fortune and goes to a more upscale bar and spends $100. Then he goes home and stashes the remaining $800 under his mattress.

His fellow poker players, unfortunately, have lost all their money, so not only do they have less money to spend in the general economy for the next week, but they forgo their beer and sandwiches at their local bars and go directly home. Thus all nine of the bar owners don't make any money on their regulars for that night.

Although Slick feels a little guilty at scamming his fellow players, greed gets the better of him, and he uses the same technique at their next game and rakes in another $900 as the Chumps lose all their money. Once again, Slick goes to the upscale bar after the game, drops a C-note, and stashes another $800 under his mattress when he gets home. And once again the Chumps spend less money in the general economy and skip their weekly beer and sandwiches at their local bars.

The third week produces the same outcome. By this time, the Chumps are pissed off and tapped out. Moreover, they can't believe Slick is so lucky that he has won all their money three weeks in a row. When they accuse him of somehow rigging the game, Slick feigns innocence and says they're just poor sports.

Now let's freeze frame it here for a moment. In real life, the Chumps would either stop playing poker with Slick or beat the hell out of him and take their money back.

But this is a hypothetical situation and a metaphor for where we are right now in our economy. If you haven't already guessed, Slick represents the upper one percent of the population that controls Wall Street and Corporate America. The Chumps represent the middle class, and the bar owners represent the general economy.

So, throughout the years, when all the players at the poker game were either winning or losing a little, the wealth was spread around and everyone prospered. But once Slick rigged the game in his favor, everyone else-with the exception of the upscale bar owner-lost out.

In addition, since Slick won cash and stashed the money under his mattress, he paid no tax on his winnings; plus he took his three weeks' worth of winnings ($2,400) out of circulation in the general economy.

This represents how the super rich and large corporations in our country today stash their cash in places like the Cayman Islands to the tune of trillions of dollars-yes, trillions! And to make matters worse, they get away with paying little or no tax on it.

Thus the problem with our economy today is quite simple: The upper one percent has sucked the middle class dry while they have stashed their money offshore and left the general economy in a depressed state. And as long as the super rich and the corporate elite pay off the politicians to rig the tax code and economic policies so they can keep winning this rigged game, nothing will change.

Unfortunately, unlike the example of the nine losing poker players, American citizens cannot stop playing the game of free market capitalism or force the upper once percent to give them their money back.

As a result, average Americans are stuck in a depressed economy with high unemployment, declining wages, and an enormous income gap between rich and poor that will continue to produce a lower standard of living for years to come.

Progressives like Ralph Nader and Bernie Sanders have been railing about this problem for decades. So has yours truly. Unfortunately, the members of the mainstream news media, who are employed by the same super rich individuals and corporations that write the tax code and create the economic policies, are not only downplaying the rigged game, but currently repeating the free market mantra that the only way to balance our budget and improve our economy is through austerity, i.e., to cut entitlements like Social Security, Medicare, and Medicaid.

This is basically the same policy the Europeans have been pursuing for the past several years, and as we now know, it hasn't worked. In fact, they are currently in the process of re-evaluating and changing it.

Nevertheless, Republicans in Congress are still adamant about cutting entitlements and not raising taxes on the rich, even in light of recent studies that have debunked the idea that austerity is the best way to balance the budget and create economic growth.

Anyone with half a brain knew this all along, of course. Unfortunately, many middle-class Americans bought into the free market scam under Ronald Reagan and went along with the idea until recently. Now, at long last, they're waking up from their somnambulistic trance and beginning to realize they've been played for chumps all these years, just like the nine poker players in my hypothetical example.

Better late than never, of course. But will they be able to do anything about it? The Occupy movement was a good start, and it highlighted the country's economic inequities and social problems. But it didn't have the power to break the symbiotic relationship between our corrupt elected officials and the upper one percent.

In addition, although President Obama always talks a good game, he has done very little to confront the upper one percent in any substantive way. In fact, when you have Eric Holder, his craven attorney general, come out and declare that Big Banks are not only too big too fail, but too big to prosecute, all hope is lost. We've crossed the line from plutocracy to outright fascism.

The result is that average Americans are angry, bewildered, and depressed, but they don't know what to do. How can they fight back? Signing petitions and attending rallies so far has done little to change the power structure in Washington. And sadly, many citizens have given up and are simply becoming inured to subsisting at a lower standard of living and working harder for less money, just like the horse in Orwell's Animal Farm.

Is there any hope? Not in the short term. But don't forget, all empires, especially those governed by a ruling class rife with greed and corruption and indifference to its own citizens, eventually fall of their own weight.

And the American Empire is no exception. The only question is how long will it take to tumble?

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

John F. Miglio

John F. Miglio is the editor of the Online Review of Books & Current Affairs and author of Sunshine Assassins, a futuristic political thriller.


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