The New American Class Structure

A new aristocracy walks among us. The formerly enormous middle class that dominated the American social structure for most of a century is crumbling before our eyes, as retirement accounts and home equity evaporate, while health care costs continue to grow inexorably by nearly 10 percent a year. In the face of rising unemployment and tumbling personal net worth, life has gotten much riskier for a vast swath of the American populace.

However, the new aristocrats, government employees both currently employed and retired, are guaranteed generous pensions that are insulated from both retirement and stock market fluctuations. They occupy a privileged class position, their bonanza protected by law, and underwritten by the ability of the state to raise taxes on the rest of us, no matter how meager or nonexistent our own retirement arrangements or health care access.

Take for example the police and firefighters currently working for and retired from the NYPD and FDNY. Their unions, like many other public employee unions, negotiated a fixed cash pension plan, no matter what the performance of the retirement funds accumulated for them. Many California public employees are similarly protected from downturns in the performance of CALPERS, the largest pension fund in the United States. California taxpayers are committed to keeping whole their generous retirement benefits, and indexing them for inflation, of course. If you are worried about the performance of your retirement accounts, take comfort in the fact that you may be providing security for retired public workers.

Thanks to formulas tying retirement compensation to salary levels earned at the end of the career, and occasional artful use of overtime assignments, some retired public employees from the rank and file are able to pull down six figure retirement incomes. The New York Post, for example, was able to identify one New York police retiree receiving $175,000 a year. It is also not uncommon for public employees to retire at 50 or even younger under the "twenty and out" system, in time to start a second career while receiving their generous retirement benefits for 3 or more decades. The Post found more than 10,000 retired New York cops under 50.

It was once, not long ago, that ambitious young men and women believed that entrepreneurship and hard work were the path to security and comfort. But with the punitive taxes imposed on the petty rich, those who earn business income and salaries over a quarter of a million dollars, the ladder climbed by previous generations of entrepreneurs is having its middle rungs sawed off. The successful business owner whose profit exceeds a quarter million dollars faces a planned series of cutbacks on deductions for things like mortgage interest and charity, means testing for various government benefits, and a planned rise in the income tax rates. It will be very hard to finance growth out of the meager amount remaining when the true marginal rate of taxation is calculated.

It will seem far less risky and more rewarding for many of the best and brightest to pursue careers in government bureaucracy. For the very most aggressive and ambitious, however, it is a career in politics that offers the ultimate in privilege.

The American Nomenklatura

In the old Soviet Union, the ruling elite shopped at different stores, lived in different areas, and enjoyed a life apart, one very different from the lives of ordinary citizens. America is all too rapidly going down the same path. We are at a peculiar moment in history where the top American political leadership excoriates the perquisites of private wealth and power -- the luxury retreats, the private jets -- while shamelessly helping themselves to unprecedented levels of the same levels of consumption, or more.

Speaker of the House Nancy Pelosi made news in 2007 when she had the SeC-32rgeant-at-Arms of the House formally ask the Air Force for a jet to transport her to her home district without a refueling stop. A furor erupted when it appeared that she was asking for use of a C-32, the military executive transport based on the Boeing 757. Her defenders angrily harrumphed that Sergeant of Arms was appointed by the Republicans, so it was all a smear job, but the Speaker has, on at least one occasion utilized the C-32. However  for the most part she has had to endure the humiliation of traveling on military C-20versions of the Gulfstream III and Gulfstream V (on a route flown nonstop by commercial airlines many times a day).

At the top, while America tightens its belt, President Obama jets off on his presidential 747 to take his bride out for Valentine's Day at a favorite Chicago restaurant. Executives may be scampering to cancel contracts for future private jets, but the 89th Airlift wing at Andrews Air Force Base, in charge of ferrying around political bigwigs, is as busy as a Vegas casino during the bubble.

In China and Japan under Confucian political ideology, sumptuary laws regulated the material goods which members of the ordinary public would be allowed to own. Most famously, silk was reserved for the elite class of mandarins and samurai. The much-despised merchant class faced criminal prosecution if discovered using the wrong type of ceramics or cloth.

In today's America, the new mandarins of government seem to despise those who accumulate wealth in the private sector almost as much as the Confucians of Asia's past. Public humiliation in front of Congressional hearings, punitive legislation, and regulatory hell are rained down upon those who seem to trespass on the ground reserved to the higher caste of public officials.

Life at the top used to be good for everyone. These days, it pays to be what we still laughingly call a public servant.

Thomas Lifson is editor and publisher of American Thinker.
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