Why are wages are flat, unemployment high, and inflation stable despite the economic recovery? Because it benefits the so-called investor or rentier class:
But capitalists are always fighting a two-front war in democracies, against workers and against their representatives in the government, who might begin to change the social framework to give workers more bargaining power. Capitalism is predicated on the asymmetries of power, on capital’s ability to compel workers to sell their labor power. Capitalists must fight anything that threatens that imbalance, regardless of whether it leads to an aggregate increase of social wealth or even improves their individual profits. . . .
Not to be too functionalist about it, but it often seems like a good idea to work backward from the need for labor discipline to understand certain vagaries of economic policy; at the level of policy and not individual firms, class struggle and getting leverage over workers matters more than efficiency or profit or even growth. (Source)
In other words it's all about developing and maintaining a set of power arrangements that give the rentiers the upper hand in all conflicts with the majority, i.e., everybody who is not them–the 99%.
I believe that the behavior of the 1% is more fear motivated than greed motivated. Ever wonder why wealthy elites see themselves as victims? It's not because they are; it's because they fear they will be. They see themselves as an embattled minority in which the majority hates them. They live, whether consciously or unconsciously, in a world in which they know what goes around comes around, and if people they have kept down get the chance, they will reciprocate. I think the same kind of psychology infects white people, especially in the Southwest, who are freaked out by Mexicans. They know the history, and they believe that If Mexicans eventually get the upper hand politically, they will treat white people exactly as the white people treated them. Same psychology governs the thinking of the Rick Santelli types who speak for the 1%–if they give workers the upper hand, they will treat them as they treated the workers. And people whose brains are soaked in adrenaline are simply not people you can talk sense to. That's not the whole story, but I'd argue that's a big part of it.
There are two things that wealthy elites fear more than anything: First, because they are such a minuscule minority in a democracy, they fear that the majority will use the political process to expropriate their wealth through "confiscatory" taxes or other redistribution schemes. Second, they fear any kind of movement to organize ordinary people that will empower them politically or in labor negotiations, because they fear it gives them the means to realize their first fear. Even if such empowerment movements are sane and reasonable, even if they would lead to greater profits and broader wealth, they feverishly envision in such movements a future with the san culottes running amok in the streets of Paris.
Either wealthy elites don't realize that workers can be bought off, as they were during the post WWII period (workers as a group don't want power; they just want to live comfortably), or they look at their aggressive attempts to destroy unions and other empowerment movements as a long-range strategy. It's a field positions game. Pin the workers near their own goal line, and make them fight for every inch when they finally organize to push back. Why buy them off now if they only have to do it in an emergency?
So two political objectives follow from this: First, push hard and don't give an inch on taxes. It's not about greed; it's about power and doing what is required to maintain one's position at the top of the pyramid. The best offense is a good offense, because once things shift and the elites are on their heels, then it's over. Or so they fear. Second, do whatever it takes to keep the "mob" confused, divided, and feuding among themselves. Tell big lies. Work the patriotism angle. Use wedge issues like abortion, gay rights, and immigration, to keep cosmopolitan workers hating traditionalist workers. Use the 'no-i'm-not-you-are tactic' to keep the uniformed disoriented. Any time anyone defending the interests of the investor or rentier class accuses those who oppose them of class warfare (or racism, fascism, or corruption, or whatever), you can be sure they are describing their own program, and want to deflect the public's attention away from it.
This confusion is promoted in various ways, for instance In the very effective way it has coopted populist resentments a la Glen Beck and the Tea Party. In other cases it's not unlike the way Southern oligarchs kept poor whites from ever seeing how they had more to gain in joining with poor blacks to organize economically and politically to break up the oligarchy that oppressed them both. It's in this sense that American politics have been southernized, but it's a strategy that is as old as there have been pyramidal social systems.
I heard someone say the other day that autocracy and oppression don't need to be explained: it's the historical norm. It's rather freedom and self rule that need to be explained. The iron rule of oligarchy is the norm once humans move out of hunter gatherer societies; everything else is the exception.
People who have a pathological need for power do whatever is necessary in the game of thrones to get it, and normal people who just want to live modest, decent lives let them because they just don't care enough to fight them. The question we have to face is whether we are now in the process of reverting to the historical norm, and because we're living off the fumes of the exceptional period since WWII, we haven't realized it yet. But a part of me is still optimistic that we will figure this out, that we will learn how new information technologies have empowered us to organize push back. But as I've argued here frequently over the last several years, nothing happens until the cultural left and the cultural right understand that they have the same enemy.
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