“Equality is not good”

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“Equality is not good”

Barney Frank and the putrefaction of American liberalism
By Bill Van Auken
18 July 2008

Chairing a hearing of the House Financial Services Committee
Wednesday, Representative Barney Frank (Democrat of Massachusetts) let
slip one of the most revealing remarks made in response to Federal
Reserve Chairman Ben Bernanke’s testimony on America’s deepening
economic crisis.

“No one expects equality, equality is not a good thing, you can’t have
an economy that works if everything’s equal,” said Frank. “But too
much inequality also has negative consequences.”

Frank made the comment after noting that, given a continuation of the
present rate of layoffs and downsizing, the US economy will lose a
million jobs this year. He also drew attention to a section in the
Federal Reserve Board’s own monetary policy report which noted that
real wages are falling significantly as a result of spiraling prices,
while labor productivity is rising.

In other words, the income of working people is being eroded even as
they face intensified exploitation.

The latest Labor Department figures show that real wages fell by 0.9
percent in June alone, a rate that would slash workers’ incomes by
nearly 11 percent over the course of a year.

Frank, who has chaired the Financial Services panel since the
Democrats took the leadership of the House in 2007 and was previously
its ranking Democratic member, was speaking not as an outraged
advocate for workers, but rather as an advisor to the bankers and
corporate CEOs whose interests he serves.

The message was clear: inequality is good because it is the source of
great wealth for the ruling class, but social polarization beyond a
certain level threatens the entire system with social eruptions.

The outlook of the fourteen-term Massachusetts lawmaker, often
referred to as one of the most liberal members of the US House of
Representatives, reflects the putrefaction of American liberalism.

The point that Frank was making in his remarks was not new. He has
repeated the same theme again and again over the last several years,
making it something of a political mantra in addressing audiences of
financiers, businessmen and corporate executives.

In a speech at the National Press Club shortly after taking the
chairmanship of the key financial oversight committee, Frank declared:
“Inequality is not necessarily a bad thing. It’s necessary in the
capitalist system, and I’m a capitalist. But we do not have to have a
government that reinforces it.”

Talking to an audience of Boston business leaders a few months
earlier, he sounded the same theme: “I’m a capitalist, and that means
I’m for inequality. But you reach a point where you get more
inequality than is healthy.”

And in an opinion column drafted for BusinessWeek magazine in February
2006 he wrote: “Inequality is not a bad thing in a free market
economy; indeed, it’s essential if we’re to benefit from the
incentives and efficiencies that make the market so effective a
producer of wealth.”

If Barney Frank is a capitalist, as he proudly proclaims, he has
become one thanks to his political career in the Democratic Party. His
most recent financial disclosure forms indicate a net worth in
financial assets of well over $1 million, with an extensive portfolio
of investments.

His relations with Wall Street’s largest banks and finance houses have
stood him in good stead. According to the Center for Responsive
Politics, he pulled in $1.8 million in campaign contributions in the
run-up to the 2006 election. He is well on his way to substantially
topping that figure in the present campaign season, recording $1.2
million in contributions by the end of March. Securities and
Investment firms were responsible for $164,600 of that money, real
estate interests for $156,401, law firms for $130,768, insurance
companies for $117,674 and commercial banks for $74,350.

In return, he has dutifully defended these massive financial
interests, acting as a key architect of the government bailout of Bear
Stearns earlier this year and now the plan to prop up the mortgage
finance giants Fannie Mae and Freddie Mac with unlimited cash from the
federal Treasury.

But even given these financial-political relations, Frank’s blunt
defense of inequality is a significant testimony to the state of the
Democratic Party and American liberalism.

“Equality is not a good thing.” Such a statement stands in diametrical
opposition to a long and central tradition in American political
thought that—however much it was violated in practice by chattel
slavery and the workings of the capitalist system—held equality to
indeed be a “good thing.”

For Thomas Jefferson and the other founders of the American republic,
inspired by the revolutionary spirit of the Enlightenment, the
equality of man was not just a “good thing” but, as Jefferson wrote in
the Declaration of Independence, a self-evident truth.

Abraham Lincoln went further, taking equality not only as a
self-evident truth, but as a proposition that had to be proven in
bloody struggle, a transcendental goal to be realized by American
society in a “new birth of freedom.”

In the depths of a Great Depression, Franklin Delano Roosevelt
delivered his “rendezvous with destiny” speech to the 1936 Democratic
convention, again invoking these profound political traditions, while
flaying the “economic royalists” of Wall Street as the reincarnation
of King George III.

“For too many of us the political equality we once had won was
meaningless in the face of economic inequality,” Roosevelt said. “A
small group had concentrated into their own hands an almost complete
control over other people’s property, other people’s money, other
people’s labor—other people’s lives. For too many of us life was no
longer free; liberty no longer real; men could no longer follow the
pursuit of happiness.”

Roosevelt spoke as a highly class-conscious representative of the
American capitalist class, who sought to save the system from the
threat of social revolution by implementing social reforms and
imposing certain restrictions on the predations of his own class. That
was in a period when, even in the midst of the greatest collapse of
capitalism to that point in history, American capitalism retained
immense financial reserves and benefited from the most advanced and
powerful industrial base in the world. The decayed stated of American
capitalism today, with its massive deficits and shrunken industry, is
a far cry from that of Roosevelt’s day. This immense decline in the
objective position of American capitalism is the most important factor
in the repudiation by American liberalism of any reform agenda.

The inequality outlined by Roosevelt more than 70 years ago has today
become even more extreme. It has indeed proven a “good thing” for
those at top of the economic ladder, who have amassed obscene fortunes
through a vast transfer of wealth from American working people, the
overwhelming majority of society.

The share of the national income monopolized by the top 1 percent is
now higher than at any time since 1928, not only before Roosevelt, but
before Herbert Hoover. Since the end of the 1970s, the top 1 percent
has seen its income rise on average by nearly 240 percent, while the
majority of the population has seen its real income stagnate or decline.

Yet neither Frank nor any other leading Democrat is sounding an alarm
against today’s “economic royalists” or “malefactors of great wealth.”
Instead, they present themselves unabashedly as their representatives
and defenders.

Frank’s embrace of inequality as a positive good under conditions in
which millions are being thrown out of foreclosed homes, seeing their
incomes ravaged by soaring gas and food prices and facing the threat
of employment is the end product of a protracted and deep decay of
American liberalism.

The immense growth of social inequality is at the root of this
process. It is to the top 1 percent that Frank and the other leading
Democrats are politically oriented. They speak for the privileged
social layers—of which they are a part—which have seen their personal
wealth balloon at the expense of society as a whole.

The ideal of equality—openly repudiated by the Democrats—is today
inseparable from the fight of working people to defend their living
standards and basic rights against the attacks being carried out by
the corporations and the government. This struggle can be advanced
only through an irreparable break from the Democratic Party and the
building of a new independent political movement of the working class
fighting for the socialist reorganization of society.

See Also:
US: Amid surging prices, Fed raises specter of renewed class struggle
[17 July 2008]
The Pennsylvania primary and the crisis of the Democratic Party
[26 April 2008]
The Clintons cash in: Wealth and American politics
[8 April 2008]

http://wsws.org/articles/2008/jul2008/fran-j18.shtml

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