Disenfranchisement, New Feudalism, and the Ghost of an American Dream

Credit: Robert Meganck

The inability to pursue the American dream becomes even more evident when looking at the overall assets that younger generations hold in comparison to baby boomers and older. Millenials are hardly able to own their own property, let alone have any type of savings built up in case of emergency. The average person doesn’t even have $400 on hand to pay for an emergency medical or accident bill, and nearly half of the workforce is unable to afford a one bedroom rental due to stagnated wages and a reliance on living paycheck to paycheck. Now think about how exponentially worse it is going to be for THEIR children in a few years.

Regardless of the booms and busts natural to capitalism, the median household income has slowed from a healthy 41% gain between 1970-2000 down to a paltry 0.3% growth from 2000 to the present. The percentage of income going to upper class households has also surpassed that of the middle class for the first time since its (the middle class’s) inception. Nearly half of the income, 48% of profits generated, in the country goes to a very small percentage of its inhabitants. 5% or less to be specific. 43% of profits are now channeled into the middle class (a 20% reduction since 1970,) and 9% goes to the lower class. (a 7% reduction, but consider losing $70 for every $1000 made if you already have no home or car).

 The actual amount of wealth, and percentage of growth for it, significantly favors the top five percent of Americans. In the 1970’s the upper class held around three times as much wealth compared to the working class. As of now they hold just under eight times more wealth than middle class Americans, over 10 times the lower class, and additionally, were the only income group to increase their median household income during the great recession. In 2008, as has been our government’s consistent policy, the same corporations and hedge funds that caused the average American to lose everything were bailed out by the government. The individuals siphoning obscene wealth off of them got their bootstraps tied to a giant balloon funded by politicians who were scavenging on the profits, while back on Earth everything went to shit. Families saw their entire savings evaporate, struggled to pay bills and the general cost of living, and many lost their homes. 

The most disheartening part about this reality is that we have been brainwashed into allowing the wealthy and government to take advantage of us for their own benefit. Systems and institutions that are in place to help marginalized communities are consistently attacked as enabling freeloaders and incurring a cost to the rest of society. Conservatives in particular like to use the argument that welfare queens and other racist stereotypes are taking advantage of the system, or that poor people are just lazy and need to get a job to pay their costs of living. This is a skewed and biased viewpoint that only serves to reinforce a prejudiced version of personal responsibility while ignoring the vast disenfranchisement that takes opportunities from anyone outside the rich white ruling class. The reality is that millions of lower class Americans work their asses off at shit jobs with little pay or benefits, all while taking the brunt of taxation in our income tax system and being forced to pay higher percentages of what little wealth they have. 

This image has an empty alt attribute; its file name is 24leonhardt-chart-superjumbo.jpg
Credit: NYT. This graph shows just how disgusting the disparity in wealth growth has been.

Our tax system preys upon the poor due to the simple reality that they don’t have resources to evade the IRS like rich people do; you can’t prevent having a portion taken out of your paycheck when you aren’t the one writing it. A recent ProPublica report shows just how disgusting this taxation disparity is, with the richest Americans having paid little to no federal income tax for at least the last decade, and recently the inequity has reached its worst levels yet. The top 25 ultra wealthy individuals (0.0001% of the population), including Jeff Bezos, Elon Musk, Bill Gates, Warren Buffet, and George Soros, paid a total of $1.9 billion in taxes during 2018 while normal wage earners footed $143 billion.

The cumulative wealth of these billionaires totals $1.1 trillion, and they hold the equivalent of all the combined assets of nearly 20 million average Americans. Those same 25 people grew their net worths by $401 billion from 2014 – 2018 and paid $13.6 billion in federal income tax within the same period. This amounts to a true tax rate of 3.4% for these individuals on average, with those such as Warren Buffet (somehow an advocate for higher taxes on the wealthy) getting away with paying a rate of 0.1%. The true tax rate for the average American lies just under 30%, while we are making about $65,000 or less per year. Which group can feasibly afford to pay the government $143 billion and still live comfortably? 

This chart shows the wealth growth of Bezos compared to the average American, and it becomes obvious how grossly disproportionate the taxes on normal people are compared to the ultra wealthy. I would highly recommend looking up other sites that put this wealth gap into further context to see just how egregiously our government has betrayed the majority. There is the classic example of looking at time increments in comparison to dollar values; a million seconds is 11 and a half days while a billion seconds equates to almost 32 years. Regardless, as a percentage of wealth taxation is extremely disproportionate in America.

It’s not just taxation that shows this disparity in expectations for poor people to somehow work harder and provide for themselves under an oppressive system controlled by the rich, who siphon off their labor and money like parasites. Americans simply don’t have the income, even working multiple jobs, to have all of their needs met. This is due to the fact that since the turn of the century costs of living have increased greatly while the wages that people are paid have shown zero growth, actually having a downward trend much of the time such as from 2003 – 2015, when the average income dropped 10% from 2001 levels until we finally caught back up with where we were in 2019. 24 million low income wage workers pay half or more of their income just for housing, and the average cost of a single bedroom living space is just under $1100 per month. This is more than a 14% increase since 2000, while wages grew 0% in the same period. Rent is clearly something that a significant amount of Americans struggle to keep up with every month. Add on groceries, medical bills, kids, pets, and unforeseen expenses, how does the average person expect to afford life? 

I want to include these statistics to directly combat the notion that government subsidies for these communities, such as rental assistance, are going to people who sit on their ass while the government pays their rent. Oftentimes social programs are tied in together with other requirements too, such as unemployment having stipulations that include showing proof of previous work and continued job applications.

America only sends some $44 billion per year to rental assistance programs, less than the federal funding for law enforcement. This is out of roughly $352 billion total in federal spending allocated towards safety net programs, only a measly 8% of the Fed’s total $4.4 trillion budget. We spend over twice that annually, $710+ billion, on our military industrial complex. To further give context on how little the American government cares about helping its citizens have healthy lives, the Fed gave five billion dollars of taxpayer money to Elon Musk last year for his rockets. We are now seeing Bezos try to get in on some sweet federally funded space action too, and witnessed a billionaire temper tantrum when the government only gave him a parse $10 billion to build his phallic shaped rockets reminiscent of Dr. Evil. 

Whenever a politician proposes to raise the budget allocated to very necessary social aid programs (which help communities the government has historically disadvantaged anyways,) they are met with fierce resistance from all sides about people needing to work harder so they don’t rely on the government for help, and that the market will solve it for them. Huh? Didn’t those same politicians just hand the richest man in the world billions of taxpayer dollars in funding for a private endeavor? That is government imposed socialism, and it astonishes me that the same politicians who are on their knees for corporate interests turn around and tell 99% of Americans to go fuck themselves and figure it out. Further, the idea that Bezos going to space to become a trillionaire being called ‘American exceptionalism’ by our politicians championing his innovation is infuriating. What about Branson and other countries doing the same thing? Also, are you seriously saying that while Americans are starving despite working two jobs? The rationality is flawed to keep a status quo of veiled American exceptionalism behind capital enslavement; it is like George Bush telling a woman who worked three jobs to support herself she was “uniquely American.”

If the government funds individual projects it should be for our benefit in a collective endeavor, not for their richest donor who has such an out of touch view on the world that upon returning to Earth from his government funded space trip said thank you to every Amazon customer and employee for funding it. “You guys paid for all this.” Yeah, unironically their hours of micromanaged labor and tax dollars that you grifted from the government did pay for it Jeff, it really did.

The lower class population struggling to pay rent from stagnated wages and skyrocketing inflation will never see the billions that go to someone like Musk put back into the economy for them, even though it was taken from their tax dollars, because billionaires hoard money in art and other super expensive assets or store it offshore in accounts free from taxation. The government turns around and further rewards those at the top for how effectively they have been able to exploit Americans, and the rest of the world, for their own personal gain and amassed untold fortunes. It’s almost as if the American government and the individuals who run it also benefit from a small few individuals controlling all of the nation’s wealth. 

There was a recent promotional campaign by financial institutions that seems dystopian and more than terrifying, but it is the reality that banks and the 1% want. 

“You will own nothing and you will be happy,” was the tagline. 

During COVID-19 the top few hundred in our nation increased their wealth by about $3.9 trillion, while the lower classes bled out $3.7 trillion due to lost jobs and debt incurred from taking out loans to survive a tanked economy. It is not a coincidence that the amount lower classes lost lines up with what the ruling class gained. Blackrock is one such financial entity that average people turned to for help during the pandemic, and in fact is the largest institutional lender in the world. In the last year they have taken their exponentially growing assets and rolled out a strategy of mass land acquisition, buying up as many residential properties as they can while swooping in with bids up to $50k over the asking price.

This has shut out many Americans from purchasing the homes they’ve worked so hard to save a down payment for, especially populations with little collateral or other possessions. People of color, recently graduating students, and young couples looking to start families are simply statistical numbers in a spreadsheet that can be profited off of by banks and lenders like Blackrock. There has been no government intervention to protect Americans from these predatory institutions, and while Americans are already forgoing medical expenses or a car payment in order to keep a roof over their heads, our government is encouraging further generational oppression that would sooner see people have no rights than take profit from wealthy interests. 

When looking at the demographic statistics of wealth and property ownership the picture of white supremacist control over capital becomes even more lucid. 45% of African Americans own their homes compared to 73.8% of the white population. Surveys have shown people think that for every $100 white families possess a black family has $90, if they even acknowledged a race gap. In actuality African American families hold $13 for every $100 their white counterparts have… The median net worth of white families in America is $188,200 while that of African Americans is $24,000, and that is just cash assets without taking into account the vastly disproportionate ownership of commodities.

White folks generally live in much nicer areas compared to black families, creating massive disparities in education and resource access. There has been a particularly bad recent issue of access to quality nutrition for minority communities, creating food deserts that see grocery stores and higher end restaurants distinctly separate from POC and poor folks. This has the effect of leaving fast food or convenience stores as the only access points they have for a meal, and on top of this they are held in a market that restricts access to higher paying jobs which would allow them to move or shop differently. 

Housing and broader economic denial affects poor and POC communities so heavily because racial covenants that banned certain populations from purchasing homes for decades are still in law. During the New Deal, FDR created the Home Owners Loan Corporation (HOLC), a government backed corporation that would insure/purchase your home loan through bonds in hopes that banks would refinance for lower down payments and better interest rates. Many banks did adopt better rates under this system, also giving more time to pay mortgages off, and essentially created the modern home loan.

However this was at the height of segregation, and the HOLC discriminated against race. It divided cities into neighborhoods based on credit ratings, marking them green, yellow, or red to determine which were ‘responsible enough’ to participate in the program. This is where the term redlining comes from as the HOLC quickly began to mark neighborhoods off in red if they had even one black resident, denying any opportunities for federal help. Federal agencies claimed that minority populations, specifically African Americans, were ‘too dangerous.’

The specific language that the HOLC used was to deny loans for any ‘black racial covenants,’ enshrining segregation in New Deal legislation. This was also the case after the GI bill was passed, which provided automatic approval for loans with as little as $0 down, but many financial institutions refused to approve black GIs. African American servicemen returning from WW2 thus couldn’t get loans coming home, stranded without an education or ability to own property. Of over 3200 GI loans given, only two went to African Americans.

Unsurprisingly as a result of this racism, homeowners associations and neighborhoods began blatantly writing segregation codes into their charters, specifically banning African Americans so that the government would give them loans. In one instance an emerging white Detroit neighborhood was trying to apply for the HOLC but was too close for the agency’s liking to an African American community. Their solution was to build a 6 foot tall fence around the edge of their neighborhood, which still stands today, and the federal government gave them loans shortly thereafter. In Levittown, a Long Island neighborhood, their charter said, and still says, that no one outside the caucasian race may access it. An older woman recounted innocently trying to get a house in Levittown since she and her husband had the cash, telling how the realtor they talked to said, 

“Get your n***** ass out of town.” The most tragic part about this is how casually she recalls the aggression, how these are the types of stories that grandmothers tell to their grandchildren. White families that bought homes in Levittown during its 1948 opening have seen an average of $200,000 in generational wealth gained from their investment. The HOLC insured $41 billion of total home loans during its life, and 98% of those went to white families. The value of those loans now is well over $400 billion.

This exponential value increase was known at the time though, in fact some predatory institutions were so aware of the value an HOLC investment brought that they would engage in blockbusting. This slimy practice targeted specific neighborhoods known to have future upside on their value due to location or some other condition, and made it seem like black families were moving in by hiring African Americans to walk down the street and act like they were interested in buying. This would subsequently scare off any potential white buyers, trying to get existing owners to panic sell. When the neighborhood cleared out with a tanked value the financial entity would swoop in and buy property at a steep discount, then move in all white folks to get HOLC bonds so it could cover the investment on a federal dime.

Community leaders have been trying to fight against this type of predation for decades, as one of Martin Luther King Jr.’s biggest focuses was on housing equality in Chicago. Sections 8-9 of the Civil Rights Act of 1968 were dedicated to fair housing, making discrimination illegal and forcing affirmative action on previous HOLC loan offerings. This was initially enforced, as Mitt Romney’s dad actually refused loans to neighborhoods if they didn’t amend their charters and integrate. Then ‘ol Dick Nixon refused to continue the policy and valiantly fought it as part of his southern strategy, claiming that “Housing Integration is not in the national interest.” 

Real estate agents still discriminate today, offering better deals or locations to white families. In a recent study Newsday found black home buyers received disparate treatment 49% of time, additionally capturing damning footage of real estate agents steering white families away from black communities.

“You have to say it without saying it you know, the knowledge of the areas.” Out of 31 million plus loan applications, black applicants were denied conventional mortgages at way higher rates, even when controlling based on income, neighborhood, and loan size. There are many instances of black homeowners posing as white and having their property valuations more than double. If we do nothing it will take at least 200 years for the wealth gap to naturally ease between white families and people of color. 

Credit: Last Week Tonight and Newsday. Their undercover footage revealed agents saying things like this in reference to ‘educating’ white families on areas to avoid.
Credit: Last Week Tonight and NBC News. The first two valuations are prior to a homeowner concealing their race as black, the third valuation is after they had a white friend pose as the owner.

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One thought on “Disenfranchisement, New Feudalism, and the Ghost of an American Dream

  1. Pingback: We Know Why GOP Politics are Dangerous. What About Democratic Liberals? | The New Federalist

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