When policies fail over and over again, Jacob Bacharach writes, it's because their real intent is succeeding. And, for the past forty years, capitalism's real intent has been on a tear:
It’s not that “Capitalism isn’t working,” as Noah Smith recently argued in Bloomberg. It’s that it’s working all too well.
Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.
This is not how the economists told us it was supposed to work. Productivity is at record highs; profits are good; the unemployment rate is nearing a meager 4 percent. There are widely reported labor shortages in key industries. Recent tax cuts infused even more cash into corporate coffers. Individually and collectively, these factors are supposed to exert upward pressure on wages. It should be a workers’ market.
But it isn't -- not by a long shot:
Wages remain flat, and companies have used their latest bounty for stock buybacks, a transparent form of market manipulation that was illegal until the Reagan-era SEC began to chip away at the edifice of New Deal market reforms. The power of labor continues to wane; the Supreme Court’s Janus v. AFSCME decision, while ostensibly limited to public sector unions, signaled in certain terms the willingness of the court’s conservative majority—five guys who have never held a real job—to effectively overturn the entire National Labor Relations Act if given the opportunity. The justices, who imagine working at Wendy’s is like getting hired as an associate at Hogan & Hartson after a couple of federal clerkships, reason that every employee can simply negotiate for the best possible deal with every employer.
Franklin Roosevelt saved capitalism by building in safeguards to keep it from going off the rails. Employment Insurance gave workers the ability to endure economic downturns. The National Labor Relations Board restored the balance between capital and labor. And, during major disruptions -- like the Great Depression -- when large segments of the population were out of work, the Works Progress Administration put them back to work on public projects. Neo-liberalism has systematically removed Roosevelt's safeguards. And, capitalism, once again, has run amok.
Now, for people at the top, things are going gangbusters. Bacharach warns that those who fear that the barbarians are at the gate have been asleep. They are, he writes, in the boardrooms.