Much has been made of Barack Obamaâ€™s comments at a June 8th White House press conference, during which he said, â€śthe private sector is doing fine.â€ť Conservatives rushed to seize on what they saw as a few seconds of election-year gold. They argue that Obamaâ€™s remarks demonstrate the extent to which the President is out of touch with the pain of the American people. They say Obama has shown himself to be hopelessly insensitive to the severity of our ongoing economic malaise.
Mitt Romney has even used the Presidentâ€™s remarks in a (brutally annoying) television ad. Democrats, of course, see it differently. Although theyâ€™d probably concede that Obama couldâ€™ve chosen his words more wisely, theyâ€™d insist that Obamaâ€™s comments have been taken out of context. Some have even gone so far as to suggest that, in fact, the private sector is doing fine.
But I think this back-and-forth has been critically misguided. We continue to pit the private sector against the public sector, laissez-faire versus big government. Any conversation to emerge out of this traditional framework is condemned to be fruitless. Weâ€™re really missing the point.
Consider this: In 2006, the CEOs of major U.S. companies took home in one day, as much money as the average worker took home in an entire year. They made 364 times the pay of the average American worker. Try to keep your head on. From 1995 to 2005, CEO pay rose nearly 300 percent. The average worker saw a 4.3 percent pay raise in that same time. Just before the 2008 crash, 23.5 percent of all income went to the top one percent; that was an 80-year high. In 2007, the top 0.1 percent collected 12.3 percent of the countryâ€™s total wealth.
Our economic lexicon has yet to account for this unprecedented realignment of American society. The old “big government vs. small government” debate has been dragged into the 21st century with a woefully inadequate vocabulary. And as a consequence, we continue to lump together these corporate fat cats with the 90 percent of Americans who work under them.
Remember in November 2008, amid an economic meltdown, when the CEOs of The Big Threeâ€”GM, Ford and Chryslerâ€”flew to Washington to beg for a government bailout? We were all like, really? OK, Romney was like, Wait, thatâ€™s a nice jet. But most of us were like, really? While homes were being foreclosed, and ordinary, hard-working Americans struggled to make ends meet, we saw the corporate fat cats cruising in private jets and rolling around in piles of our investments and told them, â€śGet a room.â€ť
Well, they went and got a room. Harvard economist Lawrence F. Katz explains our wealth distribution with this metaphor: â€śOver the last 25 years, the penthouse has gotten really, really nice. All sorts of new gadgets have been put in. The units just below the penthouse have also improved a lot.â€ť But, as Katz goes on to say, the lower apartments have become â€śinfested with cockroaches and [have] been flooding.â€ť
Katz couldnâ€™t have explained it any better. We no longer have just two sectors in this country. We can no longer to talk about the well-being of our economy by comparing private sector growth to public sector growth. We need to reframe the debate, and quickly, because weâ€™ve got a (not-so) new sector in our economy: the Penthouse Sector.
Once we separate these corporate executives from the rest of us (donâ€™t worry, theyâ€™ll probably be thrilled), a conversation about the state of our economy becomes much easier to have.
Because we all know: The real private sector is not doing fine at all. Itâ€™s desperately hurting. And itâ€™s ordinary, hard-working Americans who are hurting. In June, the private sector added just 84,000 jobs. Nearly 30 percent of those jobs were temporary â€śhelp servicesâ€ť positions.
I donâ€™t think Obama meant to imply that the private sector is doing okay; I think he meant to say the people in the Penthouse are doing great. Liberals better wake up to the inadequacy of our current political dialogue. Weâ€™d better stop allowing the “trickle-down” Republicans to pretend to speak for average Americans. They donâ€™t. If the corporate executives need lower taxes and steady income to hire new workers, what happened over the last 25 years? When does the trickle-down part of their trickle-down economics begin?
Romney isnâ€™t the champion of the private sector. Heâ€™s the King of the Penthouse. He parades around his policies as the anthem of the average American employee. He and his billionaire donors (like the Koch Brothers)Â want you to believe that, as long as the government lets them be, theyâ€™ll help you move to a higher floor with a better view. But when average Americans gather in places like Central Park to Occupy Wall Street, Romney and his gang look down from their high-rise windows and say, Oh, arenâ€™t they cute.
These people donâ€™t care about your bank account. They care about their accountsâ€”whether they be in Switzerland or the Cayman Islands. Class warfare has been going on for a long time in the U.S. Itâ€™s the filthy rich waging war on the hopeless poor. But it doesnâ€™t have to be that way. We donâ€™t want the Penthouse; average Americans just want a comfortable place to sleep with some food in the refrigerator. And weâ€™d be wise to realize who will help us get there.