By 2009, as the real estate–banking collapse widened the chasm, nearly half of American families had a debt load that exceeded their assets, leaving them with zero net worth. That same year Goldman Sachs, one of the principal malefactors in the collapse, realized profits of $13.4 billion after paying enormous sums for salaries, bonuses, and the creature-comfort expenses of its top-tier executives. Total compensation for an average employee in the firm neared $500,000.15 Presumably none of them fell into foreclosure.
A November 2011 report by the Pew Charitable Trusts’ Economic Mobility Project pointed out that most children who grow up along the top or bottom of the American income spectrum keep their respective places all their lives. The practice of “legacy” admissions in our elite universities, for example, is naked affirmative action in favor of the silver-spoon set. America once had the highest proportion of college grads in the world. Now, thanks to deteriorating educational systems and less accessible systems of higher learning, we’ve fallen to twelfth.16
Much of this can be attributed to the waning political power of the nonrich as the rising impact of big money works its will. When the Great Recession struck, state and local governments laid off hundreds of thousands of middle-class teachers. It was a double whammy, devastating teacher families and, by weakening public education, making it harder for children of the nonelite to climb up from the economic basement. Although George Orwell’s 1984 was seen by many as a harbinger of the future, totalitarian government never came to America. What we got instead was closer to Aldous Huxley’s Brave New World, in which alphas and epsilons stay locked in place.
What’s happening to America’s class structure is well illustrated by passenger airliners. Year after year business and first-class grow more opulent and expensive, whereas passengers in the coach or economy sections are crowded together like lima beans in a can. They pay extra for pillows, blankets, legroom, or a better spot in the security line. Food, if available, costs extra and is a close approximation of prison fare that’s been wrapped for transport.
Around the time Congress was passing the more regressive tax structure put forth by President George W. Bush, it dutifully enacted legislation to stiffen bankruptcy laws and make it much more difficult for citizens burdened by unmanageable debt to get out from under it. A key provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 erected barriers to filing a Chapter 7 bankruptcy, under which most debts are forgiven. Instead the law required debt-ridden citizens to file under Chapter 13, which kept much of their debt on the books. Bankruptcy judges were still prevented by law from modifying mortgages, although there’s no logic to this exemption. It exists only because the financial giants that buy and sell mortgages have the clout in Congress to make it exist.
Senator Bernie Sanders (I-VT), the only avowed socialist in Congress, managed to attach an amendment that established a periodic audit of the Federal Reserve to the scandalously tepid Wall Street Reform Act. “As a result of this audit, we now know that as the crisis raged the Federal Reserve provided more than $16 trillion” in secret loans to financial institutions and other well-placed corporations around the world, Sanders reported. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”17 President Obama, the election-year champion of “change,” waited until the fourth year of his first term to propose a task force to investigate the now-cold trail of shady and downright illegal mortgage-lending practices that led to the housing crisis.
Hard-right fanatics spent many thousands of work hours and millions of dollars to win the right to inject unlimited cash into political campaigns. When the Roberts court approved unlimited, untraceable corporate spending for campaign ads in its Citizens United ruling, those same fanatics quickly began to argue that the additional cash wouldn’t make a difference. But long before the ruling, U.S. politics had moved decidedly to the right, a dynamic that had much to do with expanding the Gulag.
Over the last seventy-five years, the liberal stance on economic issues has drifted slowly to the right. Democratic president Bill Clinton, for example, signed the Financial Services Modernization Act, which repealed the Depression-era Glass-Steagall Act and removed barriers between banking, insurance, and Wall Street securities trading. Clinton also signed off on the Commodity Futures Modernization Act, which allowed all sorts of cowboy speculation in derivatives—including deadly credit default swaps—free of federal oversight. It’s difficult to imagine Franklin D. Roosevelt, or for that matter, Republican trustbuster Teddy Roosevelt, working on behalf of such measures.
In the meantime, the Grand Old Party (GOP) rapidly became a party in which even conservatives like Alan Simpson, Bob Dole, and President George H. W. Bush were considered much too liberal. The party of Lincoln and Eisenhower is now the party of novelist Ayn Rand, whose pompous pulp fictional contempt for the nonrich is combined with relentless preaching that acute selfishness is a moral imperative. Still, as Republicans embrace the concept of downsizing budgets, there are signs that some of them may accept reforms in the criminal justice system. The conservative policy group Right on Crime declares that it’s “possible to cut both crime rates and costly incarceration rates” and that prisons “are not the solution for every type of offender. And in some instances, they have the unintended consequence of hardening nonviolent, low-risk offenders—making them a greater risk to the public than when they entered.” Among signatories to the group’s statement of principles are conservative chieftains Jeb Bush, Newt Gingrich, and Grover Norquist.18
Still, in stratified twenty-first-century America, society continues kicking people after they’re knocked to the ground. In May 2011 Florida governor Rick Scott signed a bill that forces welfare recipients to submit urine, blood, or hair samples for drug testing. Positive results carry an immediate six-month removal from the revamped welfare program established by Clinton and then–House Speaker Gingrich. The program in 2009 paid average annual cash assistance of $5,100 to a family of three. The Florida drug penalty is a collective punishment for the entire family. A second positive test results in an additional three-year ban on state assistance.
Backers of measures like these assume the poor are a sociological other, a group that’s roughly approximate to the incarcerated. In 2012 congressional Republicans led by Senator John Barrasso (R-WY) sought to require that the unemployed submit to drug testing in order to receive jobless benefits. The status of unemployment made them, in Barrasso’s mind, criminal suspects. The senator never thought to include among these suspects the financial insiders who plunged the economy into crisis by playing fast and loose with the law. Even as the $16 trillion in federal assistance rained down on them, not one had to pee in a cup.
15
Crazy Consequences
ON APRIL 15, 2010, MICHELLE LYN TAYLOR, AT THE AGE OF THIRTY-FOUR, WAS sentenced to life in prison after being convicted of lewdness with a minor under fourteen. Her crime was to force a thirteen-year-old boy to touch her breast through her clothing and ask if he’d like to have sex with her. Although she accepted responsibility for her actions, she said she had no memory of the offense, which took place two years before she was sentenced.1