THE BLACKS WERE ON THE STAGE.
THE WHITES WERE AT THE TABLES.
THE MOBSTERS WERE BEHIND THE SCENES.
AND SOMEHOW THE MAGIC TOUCHED THEM ALL - Jim Haskins - "The Cotton Club."
In the 1890's, Harlem was the land speculator's dream. The elevated railroad lines that had been extended to 129th Street in Manhattan, had transformed the area from the hinterlands to what was called "The Great Migration."
At the time, black families lived mostly in the area between Thirty-Seventh Streets and Fifty-Eight Streets, between Eighth and Ninth Avenues. The upper crust of society viewed Harlem as the next step for the upwardly mobile, and as a result, splendorous townhouses costing thousands more than comparables downtown, were being built as fast as the Harlem land could be purchased by the land speculators.
By 1905, the bottom of the Harlem real estate market fell though the floor. The land speculators were forced to face the fact that the townhouse had been built too quick, and that the prices were far above what the people were prepared to pay for them.
On the verge of bankruptcy, the land speculators used tactics that today would be illegal. They decided to rent their buildings to black tenants, far above what they would charge white tenants. Then, in a frenzy to recapture their losses, the land speculators approached white building owners and told them if they didn't purchase vacant buildings they would rent them out exclusively to blacks, thereby reducing the value of the white landowner's properties. The white landowners didn't bite, so the land speculators made good on their promises. Whites began moving out of Harlem in droves, replaced by black families who had never lived in such a fine neighborhood before. Black churches followed their congregations from the slums of Manhattan to the splendor of Harlem, and by the early 1920's, Harlem was the largest black community in the United States.
However, most blacks could not afford the high rents charged by the white building owners, so they took in tenants, causing two and sometimes three families to live in a one, or two-bedroom apartment. Coinciding with the overcrowding of Harlem, came the influx of illegal enterprises, such as numbers runners, houses of prostitution, and drug dealers. This was counteracted somewhat when prosperous blacks, mostly in the entertainment business, decided Harlem was where they could showcase their talents in a neighborhood filled with people of their own race. Fritz Pollard, noted All-American football player, who made his money in the real estate, moved to Harlem, as did fellow All-America football player Paul Robeson -- destined to hone an outstanding career acting and singing on stage. They were quickly followed by famous singers like Ethel Walters and Florance Mills, and Harlem was ready for a renaissance equal to that of the glowing White Way on Broadway.
However, when there was money to be made, white gangsters like Dutch Schultz and Owney "The Killer" Madden were ready to jump in and take the profits, by force if necessary, which is the way they did business anyway. Schultz muscled his way into the Harlem numbers business, chasing out such black notables as Madam Stephanie St. Claire and Caspar Holstein. And during the height of Prohibition, Madden had his eyes on the perfect place to sell his bootleg booze: The Club Deluxe on 142nd Street and Lenox Avenue.
The Club Deluxe was owned by former world heavyweight champion Jack Johnson, the first black heavyweight champion of the world. Whereas, Johnson was proficient with his fists, Madden and his formidable crew were good with guns, knives, and bats. A few choice words, backed with the threat of violence, with few meager bucks thrown in, and Johnson handed over Club Deluxe to Madden and his partner/manager George "Big Frenchy" DeMange. The two gangsters renamed it The Cotton Club.
Not to totally insult a black man with the prestige of Johnson, Madden threw Johnson a bone, and let him hang around the joint, resplendent in a tuxedo. Johnson would smile and tell everyone who asked that he was the assistant manager under DeMange.
To understand why such a great heavyweight boxer like Johnson would cower before Madden, who was barely five-foot-five-inches and 140 pounds after a huge dinner, one would have to be made aware of Madden's background.
Owen "Owney" Madden was born at 25 Somerset Street, in Leeds, England, on December 18, 1891. In need of work, his father moved the Madden family to Liverpool. In 1903, when young Madden was only 12, his father died, and his mother re-located her family to America, settling on the West Side of Manhattan, in a neighborhood called "Hells Kitchen."
Madden fell in with a boisterous gang known as the Gophers. He became proficient in the favored crimes of the era: robberies, muggings, and labor racket beatings. In order to hurt and intimidate, Madden's favorite weapon was a lead pipe, wrapped in newspaper.
Madden made a ton of money in a racket called the "insurance business." As the president of his own "insurance company," Madden would visit the local establishments and tell the business owners that the owner needed "bomb insurance," in case foreigners, or maybe even Madden himself, decided to bomb the businessman's store. The business owners caught wind quick, and paid Madden what he demanded. If they didn't pay Madden, that's businessman's stores would go up in flames and debris in a matter of days, and sometimes even hours. While Madden was a member of the Gophers, and making tons of money in his "insurance business," he was arrested 44 times, but not once did he ever go to prison.
When Madden was 17, he earned his nickname "The Killer." A poor Italian immigrant did nothing wrong, except cross paths with Madden on a street in Hell's Kitchen. In front of a crowd of his fellow Gophers, and whomever else was standing on the street that day, Madden pulled out a gun and shot the Italian dead. Then Madden stood over the dead body and announced to the assembled crowd, "I'm Owney Madden!"
By the time he was 23, Madden had at least five other murders to his credit. Hence the nickname - "The Killer."
However, Madden thought he was bulletproof, until November 6th, 1912, at the Arbor Dance Hall, which was in the heart of the territory controlled by the Gopher's rivals: the Hudson Dusters. Madden strolled into the hall by himself, like he had nary a care in the world, during a dance given by the Dave Hyson Association. Madden was watching the proceedings from the balcony, when eleven Hudson Dusters surrounded him and shot Madden six times. Madden was rushed to the hospital, where a detective asked Madden who had shot him.
"Nothin' doin,'" Madden said. "It's no business but mine who put these slugs into me. My boys will get them."
By the time Madden was released from the hospital, six of his eleven assailants had already been shot dead.
While Madden was recuperating from his wounds, one of his fellow Gophers, Little Patsy Doyle, figured he'd take control of Madden's gang. Doyle was also intent on taking back his former girlfriend, Freda Horner, who now was the sole property of Madden. Miss Horner told Madden about Doyle's intentions, and as a result, Madden told Miss Horner to tell Doyle she would be glad to meet him for a date at a saloon on Eighth Avenue and 41st Street. When Doyle arrived, dressed to the nines and all smiles, two of Madden's gunmen shot Doyle dead.
Being the obvious suspect, Madden was arrested three days later for the murder of Little Patsy Doyle. At Madden's trial, he was shocked to discover that Miss Horner had betrayed him too. Miss Horner testified in court that it was Madden who had set up the Doyle murder. As a result, Madden was convicted and sentenced to 10-20 years in Sing Sing Prison. He did only eight years, and was released in 1923, just in time to strong-arm Jack Johnson into selling him the Club Deluxe, a.k.a.- The Cotton Club. By this time Madden was big into bootlegging with his partner Big Bill Dwyer, and the Cotton Club was the perfect place to sell their illegal hootch, especially their famous Madden No. 1 beer, which was considered the best brew in New York City. They took in a legitimate guy named Herman Stark as their front man/partner/stage manager, but the show within the show was completely run by Madden and DeMange.
According to Jim Haskins book The Cotton Club, when Madden and DeMange took over the joint they redid the entire interior "to cater to the white downtowner's taste for the primitive." The club was made over in "jungle decor," with numerous artificial palm trees dotted throughout the spacious establishment, which had seating for 700 people. The most exquisite draperies, tablecloths, and fixtures were purchased, indicating this was a "plush late-night supper club," and the exorbitant prices highlighted that fact. The menu was varied. Besides the traditional steaks and chops, the Cotton Club cooks drummed up Chinese and Mexican dishes, as well as "Harlem" cuisine like fried chicken and barbecued spareribs.
DeMange presided over the front door like a tyrant. One rule was perfectly clear. Although the waiters, busboys, bartenders, cooks, service personnel, and performers were all black, no black people were allowed inside as customers. (The name itself - The Cotton Club -- came from the light brown color of undyed cotton.) The chorus girls had to be "tall, tan, and terrific" which meant that they had to be at least 5-feet-6-inches tall, light skinned, and no older than twenty-one. The girls also had to be expert dancers, and at least be able to carry a tune. For some unknown reason, there was no color-shade restriction on the black male dancers, who were all proficient in "high-stepping, gyrating and snake-dancing."
To show how strict Madden and DeMange were about their policy of segregation, about a month before their second grand opening, (The Cotton Club was closed by Prohibition agents for a while, ever though the local cops were on the pad), the following job interview took place. Present were Madden and DeMange, along with their choreographer Althea Fuller, and their orchestra conductor Andy Preer. The girl being interviewed was Queenie Duchamp.
DeMange to Madden: Boss, when is the club going to be ready to open?
Madden: The pigs won't cause us trouble for a time. They know if we're forced to close for bootlegging they won't get their bonuses. As it is, they're missing the extra padding and the boys have been complaining to the Sarge. Yeah, they've learned their lesson. As for the club's show... let's ask Althea and Andy.
DeMange to Preer: Andy, how's the pit? Ready for next month's opening?
Preer: We will be. If Althea gets her girls ready, the pit is ready to stomp.
Althea Fuller: Boss, we had a setback. One of the girls went and found a "moral conscience." She's following her sister, a Garveyite, back to Africa. Shame, she was a looker in the front line. Don't worry, Boss, I've already got replacements ready to audition for you today. One of them looks promising and comes with a recommendation. She's in the front row, third one in... Queenie Duchamp. First, let's see if she can remember the steps she was taught this morning.
(Andy Preer leads the orchestra in "I've Found a New Baby" and 5 dancing girls audition. Queenie Duchamp is third from the left.)
Madden: Keep the third and the fifth. The other girls are too dark and short. Althea, make sure you grill them about rules and rehearsals. We are NOT running a gut bucket operation here.
(Madden leaves with his bodyguards)
Fuller: Queenie, come here. You got the job on a few conditions.
Queenie: Anything you want Miss Fuller.
Fuller: Number one - No booze, No boys, No drugs. No exceptions.
Queenie: Yes, Miss.
Fuller: Number two- Rehearsals are Tuesday, Wednesday, Thursday and Friday starting at 1:00 p.m. sharp. All rehearsals are MANDATORY and lateness will not be accepted. I don't know what you've heard, but rehearsals here are grueling and performances are long with many elaborate costume changes. That means you can't afford to be draggin' your ass around here. Make sure you eat and get your rest. Do you understand?
Queenie: Yes, Miss Fuller.
Fuller: Number three - No mixing with the patrons. There are about 700 whitefolk that walk through those doors every night. And according to Mr. Madden, they only have one goal here and that's to spend money. They come here to hear the best Negro music and dance numbers in the city. They might act like they want to be your friend after a couple of drinks, but they don't. Mr. Madden doesn't want the races mixin' and as far as I'm concerned, I think that's better for business anyway.
DeMange: If a white customer starts to give you a problem or tries to make a connection with you, tell me. I'll take care of it. It's happened before. Sometimes these rich people get a couple drinks in them and they think they own the world. Don't worry about it, just let me know. We run a tight ship here.
Queenie: Yes, Mr. DeMange. No problem Ms. Fuller. I am an entertainer and I understand the importance of practice. In fact, I'm a singer, a blues singer! If you ever need a singer..... (Ms. Fuller and Mr. DeMange look at each other.)
Fuller: Look, missy. Your goal here is to dance, smile and follow the rules... not sing. Got it?
Queenie: Yes, Miss Fuller. Got it.
Fuller: Another thing... stay out of trouble. You're a looker and the club world can be dirty and dangerous. It doesn't have to be though. Keep to yourself and whatever you do, stay out of Mr. Madden's way. If you do this, you'll be fine. Now go to wardrobe for a fitting.
Queenie: Yes and Thank you, Miss Fuller.
The Cotton Club was an immediate success with the downtown swells. On opening night, the Fletcher Henderson band entertained the crowd (Henderson's band was the house band until June 1931). Through radio broadcasts originating nightly from the Cotton Club, Henderson's band was such a success, he became one of the most sought after band leaders in America. Following Henderson was the Duke Ellington Band (until 1934), and then Cab Calloway and the Cotton Club Orchestra.
Despite the fact the only booze served on the premises was Madden's No. 1 beer, customers were allowed, even encouraged, to bring their own booze they had obtained illegally elsewhere. Of course, the management had a hefty set-up charge, which included the glasses, ice, and the mixers. If a customer came unprepared and still wanted booze instead of beer, the doorman, and sometimes even a waiter, came in handy. A bottle of champagne could cost a customer , and a bottle of scotch - , a kingly sum in those days. But the customers were well-healed, and nobody ever gripped about the prices; at least, nobody who cared about their continued good health.
After a while, DeMange and Madden lightened up a bit on the "no-black-customers-allowed" policy. This happened in 1932, right after W.C. Handy, known as "The King of the Blues," was denied admission, even though the Duke Ellington Band was inside playing songs that Handy had written. Ellington pleaded his case to Madden, and Madden agreed to loosen his policy. But just a little bit.
Light-skinned blacks were now allowed in as customers, and a few darker blacks, who were famous entertainers themselves. However, blacks in mixed parties was a definite no-no.
Writer and photographer Carl Van Vechten wrote, "There were brutes at the door to enforce the Cotton Club's policy which was opposed to mixed parties."
Jim Haskins wrote in The Cotton Club, "Only the lightest-complexioned Negroes gained entrance, and even they were carefully screened. The club's management was aware that most white downtowners wanted to observe Harlem blacks, not with mix with them."
Even famed comedian Jimmy Durante displayed blatant racism when he said, "It isn't necessary to mix with colored people if you don't feel like it. You have your own party and keep to yourself. But it's worth seeing. How they step!"
Durante went as far as to intimate that blacks were innately more violent than whites. "Racial lines are drawn here to prevent possible trouble," Durante said. "Nobody wants razors, blackjacks or fists flying. And the chances of war are less if there's no mixing."
In 1933, after he settled a little problem with the IRS, and with Prohibition now over, Madden decided to call it a day. He handed over the reigns of the Cotton Club to DeMange, and hightailed it to Hot Springs, Arkansas, where he opened a hotel/spa, which became the favorite hideout for New York mobsters on the lam from the law. In fact, when New York Mafioso Lucky Luciano was in hiding, because a bulldog special prosecutor named Thomas E. Dewey had a warrant for Luciano's arrest on a trumped-up prostitution charge, it was at Madden's resort where Luciano was finally arrested after four months on the run.
Of course, Madden was still a silent partner with DeMange in the Cotton Club, but the huge profits would soon diminish, before coming to a halt in Harlem.
It started with the Great Depression, which had cut down dramatically on the disposable income of the rich, and the formerly rich. Downtown revelers who had frequented the Cotton Club came less often, and when they did come, they spent less money. These same revelers got caught up in the street gang mentality, and as a result, an avalanches of bullets stared flying in Harlem; whites shooting blacks, blacks shooting whites, and members of the same race slinging shots at each other. With so much lead zinging though the Harlem air, white-oriented Harlem clubs like the Cotton Club suffered a dramatic decrease in attendance.
In addition, no area of America was affected more by the Depression than Harlem. By 1934, according to the New York Urban League, more than 80% of Harlem residents were on "Home Relief," which we now call Welfare. The Reverend Adam Clayton Powell fanned the flames of racial tensions when he started leading boycotts of white-owned stores in Harlem, in order to force them to hire more black workers. Despair and resentment sprung up in the streets of Harlem, and this lead to a fateful day in Harlem history.
A dark-skinned, 16-year-old Puerto Rican named Lino Rivera was sulking around the streets of Harlem, out of work and desperately looking for a job; any job. To pass the time, he took in a movie, then went to the Kress Department Store on 125th Street. There he spotted a knife he wanted. But the knife cost ten cents and Rivera didn't have ten cents. Rivera had just snatched the knife and put it into his pocket, when a male employee of the store grabbed Rivera, and a scuffle ensued. While the two men were battling and another white employee tried to subdue Rivera, a crowd of black shoppers surrounded the fight, obviously favoring Rivera. During the melee, Rivera bit the thumb of one of the white employees. The injured man shouted, "I'm going to take you down to the basement and beat the hell out of you."
Big mistake.
Within minutes, the rumor had spread on the streets of Harlem that two white men were beating a black boy to death. This false rumor received dubious confirmation, when a blaring ambulance pulled up in front of the Kress Department Store. It made no difference the ambulance was there for the white man who had the severely bitten finger.
That night the streets of Harlem erupted in total bedlam. Born out of resentment of the Depression, and the dismal way white people had been treating black people in Harlem for years, hundred of blacks rioted in the streets. They looted white-owned stored and pilfered merchandise as if they had an absolute right to take it.
The perception to the downtown whites was that Harlem was no longer safe for them to venture into, even to see the wondrous entertainment at the Cotton Club. In addition, black musicians and entertainers no longer considered the Cotton Club as the top of the heap. It became a place where the entertainers could start their careers, but once they got noticed, they went on to bigger and better things. Business became so bad at the Cotton Club, and other Harlem clubs that catered to the white downtown crowd, such as Small's Paradise on 7th Avenue, that Harlem's Cotton Club closed its doors for good on February 16th, 1936.
DeMange and Herman Stark, with Madden's blessing from Hot Springs, moved the Cotton Club downtown to Forty-Eighth Street and Broadway, to a space formerly occupied by the Harlem Club. The new Cotton Club was an immediate success. It had its grand re-opening on September 24th, 1936. Cab Calloway and Bill "Bojangles" Robinson performed that night, as did Avis Andrews, the Berry Brothers, and the gorgeous Katherine Perry, who was so light-skinned she could easily pass for white.
Because it was so accessible with its new Midtown location, the Cotton Club was raking in the cash. In the third week alone, it grossed more than ,000, and in the first sixteen weeks, the average weekly gross was ,000. The prices in the new joint were higher than the Cotton Club's in Harlem. A steak sandwich rose from .25 to .25. Scrambled eggs with Deerfield sausage rose from .25 to a .50 and lobster cocktails went from .00 to .50.
Still DeMange and Stark kept packing them in.
One price that did decrease was the Cottons Club's cover charge. In Harlem, in order to keep the "undesirables" away, the cover charge was per table. However, since blacks very rarely crossed the "Mason-Dixon Line" of 110th Street, the new Cottons Club's cover charge was per table during dinner time, and nothing after that.
The new Cotton Club continued to thrive until the summer of 1939, when the Internal Revenue Service hit the club's management with indictments for income tax evasion. The indictments hit the Cotton Club Management Corp, including Herman Stark - President, George Goodrich, -- Accountant, and Noah Braustein - Secretary-Treasurer, with four counts of failure to pay, and embezzlement of taxes. If convicted, all three men could face up to 25 years in prison, and fines of up to ,000 apiece. Amazingly, because he was just listed as an employee, Frenchy DeMange escaped the indictment. At trial, the Cotton Club Management Corp. was found guilty, but the three officers escaped conviction. Still, Stark had to fork over a hefty fine to the government, in addition to ,400 owed in back taxes.
At the start of 1940, it was obvious that the Cotton Club, and Herman Stark, had money problems. Besides the high Midtown rent and the effects of the Depression, the unions, especially the musician union, had a stranglehold on Stark and his profits. Before his problems with the I.R.S., Stark was skimming money off the top to make up for any shortfalls the unions and the high entertainment payrolls caused. But with the government watching the Cotton Club like a hawk, skimming was now impossible.
The Cotton Club closed its door for good on June 10th, 1940. Stark and DeMange gave no official reason, but as one columnist put it, the main reason was, "the lack of the famous, old filthy lucre."
Yet, that explanation would be too simplistic. Of course money was a problem, but also America's taste for music like Duke Ellington's and Cab Calloway's was changing too. The younger generation of Americans were enthralled with the new jazz and "swing" styles of white bandleaders like Tommy Dorsey, Artie Shaw, and the "King of Swing" -- Benny Goodman.
The Cotton Club was a great idea whose lifespan had reached its conclusion. The black entertainers who had cut their teeth working at the Cotton Club, people like Duke Ellington, Cab Calloway, Louis Armstrong, Ella Fitzgerald, and Lena Horne, all went on to establish long and wondrous careers. But the concept of a night club with all black entertainment no longer appealed to the white mainstream of America.
The Cotton Club closed because it was a concept that had blossomed, then like a gilded rose, slowly died.
Still, the memory, and the impact of the Cotton Club on society will linger as long as song and dance remain an integral part of our American culture.
The words equality and inequality have been been thrown about so often that they bring a knee jerk sickening reaction. People just don't want to hear about it even if they recognize the various abuses and corporate influence over government policy. Anything that is endlessly regurgitated for decades, passionately opinionated, and presented by inappropriate messengers can become ridiculously dull and inspire an instinctive shrug. This includes pushy religious moralizing babble by rich adulterous preachers, factional agenda by poorly educated silly demagogues like Al Sharpton, or appeals to income equality by college educated white children of the bourgeois. Whenever their mouths open we want them shut immediately since we understand the background of hypocricies, corruption, temporary fad following behavior, lack of education, superstition, and blatant factional interest. Decades of the passionate babble and counter-babble has trained us to ignore it as an irritating noise akin to one found on crowded subway platforms.
It doesn't help that Americans have to live in a hyper ideological great power that no longer has an ideological great power competitor. Cold war competition at least allowed for an extreme opposite point of view to be presented to the world and brought attention to blatantly obvious problems like race relations. However, the world wasn't faced with a "fair and balanced presentation". Non-superpowers had to endure decades of a situation similar to a modern news talk show with two guests talking over each other (or Jerry Springer). The talking head equivalents, from Moscow and Washington DC, poured at each other endless streams of factual data mixed with propaganda. Factual positive domestic developments and enemy's factual shortcomings were of course exaggerated. Besides exaggeration, everything was viewed through an increasingly sharpened and distorting ideological lens. On top of all these lies, the intelligence agencies of both countries waged endless information/propaganda warfare directed at the whole globe. After decades of this full orchestra brainwashing, one society finally collapsed and started dealing with reality. After hitting rock bottom, Russians finally started to at least try to be objective when it comes to actual statistics, numbers, scientific findings, and facts on the ground. Basing national policy on faith based notions of the Soviet dream and way of life proved to be destructive. The Russian society however readily accepted American capitalism (to a higher degree than Germans or Japanese) since it was easy to replace one rigidly ideological construct for another. We'll see American gangster finance live in Eastern Europe long after it declines here.
United States did not undergo a similar transformation since they didn't have to. The tired Soviet talking head that Americans were shouting at, finally went blue in the face and had a heart attack. This was taken as complete affirmation of years of American propaganda as at least effective if not totally factual. Major players in the world (India, Japan, Brazil, Turkey, Poland) stood up and cheered like satisfied Jerry Springer guests while getting pats on the back for good participation. They stepped further from central command economic structures and dismissed concerns formerly brought by socialist theorists.
Obviously it's impossible to disentangle ideology from empirical evidence. Even objectivity and scientific agreements are just forms of consensual intersubjectivity. However, it's always possible to at least try to approach a situation like a disinterested anthropologist. It is certainly possible for a rich white British person to study poverty in India and describe it with relative accuracy without being an emotional "bleeding heart" or being accused of being in the pocket of the poor Indian lobby group. An educated American can study the income inequality in Brazil or Mexico and describe the political situation without being accused of siding with a particular ideological faction in either of those countries. It is very possible to be relatively disinterested when describing observable reality for the purposes of history, empirical prediction, and research to be used by individual who craft policy. Americans definitely study and report on other societies like this all the time and even make predictions.
But what happens when say, academics in France or China observe the American domestic situation and conclude that the situation is negative and unhealthy? That's right, they are immediately considered either darned socialists, know-nothing bleeding hearts, and/or ideologues with their own anti-American agenda. Even domestic Americans who give descriptions of unpleasant realities are scorned and rejected even if they are Ivy League respectable authorities on the subject (and in many case scorned because of that). This is analogous to a person with a drinking problem accusing everybody who mentions it that they have an agenda, that they need a drink as well, that they don't know anything since they don't live in the person's house, or that they want the alcoholic to fail.
How did it come to this? Well, Americans suffer from the same problem Soviets did in the 1970s when it comes to living within a rigidly ideological social bubble. Americans got so used to their own authorities blatantly using faith based ideological slogans, distorting facts, and being ridiculously one sided, that they started thinking all world's authorities do the same. The way a thief thinks everybody else steals, rigid ideologues are incapable of looking at opposing points of view without thinking it's not ideology as well. This is best seen in the fundamentalist religious communities. The clergy had told the faithful that their lifestyle is moral for so long, that whenever the flock encounters people who live/think differently, it considers the different lifestyles as immoral and backed by a sinister agenda.
It is time to start differentiating between the blatant agenda pushing factional messengers (ex. Jesse Jackson and Dick Cheney) and milder subconscious agenda of people trying to be reporters and scientists. To this day, there are 20% of Russians who vote for the communist party and march in the streets and talk of how good it was during the slow rot in the 1980s. Similar ideological inertia will happen with the American elderly in the future after the current system transforms itself to survive in the modern world. One might laugh at the notion of American propaganda (of the capitalist American dream) being as extensively imposed as in the authoritarian Soviet Union. However, before the American version of glasnost became available with the internet, serious opposing points of view were heard even less by the general public. One never really heard national television news stations and radio shows seriously discuss Scandinavian style welfare, using more money on building real industry and jobs instead of more aircraft carriers to outspend Moscow, or creating a better quality of life than the Germans.
We must remember that serious discussion (on improving American quality of life, on solidifying socioeconomic standing of an average American, or creating Japanese level industrial workforce), did not materialize even after Soviet Union collapsed. Instead the only discussion that briefly bubbled up concerned the next plan of action for the American military.
It took a few paragraphs to prepare the reader for discussion about economic inequality in the United States. Why is the discussion of inequality even necessary? It's obvious that inequality among men exists naturally in any system. Western style hybrid capitalism as we know it is here to stay for years into the future in one form or another. Inequality found in United States however, stopped being sustainable a while back and is now the key cause of United States declining into the 21st century relative to rising powers of China and EU. The decline at this point, is unstoppable and the only discussion is whether it will be a slow gradual one (similar to Spain in 19th century), or a rapid one with potential social instability.
Yes, there were also the crushing economic burdens of being an expansionary ideological power and the transfer of heavy industry to competitors like China. These burdens pale compared to the root problem of monstrous inequality that allowed most of the deeper structural problems and superficial symptoms to occur. We've heard people throw around rugged unresearched statements concerning how the top 1% owns half of the wealth and the like. Simultaneously, we've also heard the counter statements that the richest pay the biggest share of taxes. When such statements are thrown about, the discussion becomes another yapping Jerry Springer episode to tune out of.
There is actual historical data constantly being collected, shown, and ignored by highly skilled people. Lets look at some.
In April of last year, one of the oldest and most read propaganda mouthpieces, The Wall Street Journal, decided it was a good idea to throw a few bones to its readers. The readers of course are the people who consider themselves financially independent "middle class" and not just the equivalents of delivery boys for the politically connected oligarchs. The readers are likely to include newer assimilated ethnic groups like Irish and Italians trying to catch up and overworking to get their 60-150 grand a year. The oligarchs themselves would never turn to WSJ for their news and opinions. Summer of 2007 to summer of 2008 saw historic rises in gas prices and we saw people like Lou Dobbs throw daily fits concerning the illegal immigration. Occasional articles began to appear in nationally circulated media to cater to rising concern about "middle class" problems. Some of these articles increasingly began to include deep probing studies about structural and social infirmities of American civilization.
The source of the example article above comes from a very interesting Berkley study by Emmanuel Saez, a John Bates Clark Medal award winner in 2009 (Milton Friedman and Paul Krugman amongst the past winners), and possible influence on Obama's taxation thinking. The data in excel format is here: (elsa.berkeley.edu/~saez/TabFig2006.xls ). We see a ridiculous graph that shows a few things not readily noticed due to the study's percentile breakdown of the top 10% of earners. The data shows annual wealth generation both including and excluding capital gains like stocks.
First, lets analyze the top 1% of the earners without looking at additional wealth they get through capital investments. The reported real income (adjusted for inflation) of richest 0.01% of the working population (14,000 oligarch households making an average of .5 million a year with at least .5 million annual income to be part of the group), grew 22% from 2000 to 2006. Average real incomes of the richest 0.1% of households (133,000 oligarch households making an average of million annually and needing to make from .4 million up to .5 million annually to be part of the group), grew 8.5%. To be included in the richest 1%, a household had to just pass the measly threshold of 6,000 dollars a year. There were 1,333,249 households that made up most of the top 1%, were above 99% of American workers, but paled compared to 0.1% of the population. Many were the professional elites and not necessarily financial wizards and money changers.
This means that 10% of 10% of 1% of the richest households (1 out of every 10,000 households), were able to almost triple their annual earnings compared to 1,500,000 households who are also in the richest 1%. This is with capital gains EXCLUDED from earnings estimates. It is very telling that the elite professional and managerial class numbering over a million (represented by nationalist democratic capitalist faction) was not able to politically outspend less than 150,000 oligarch households in the last few elections. The attractiveness of financial capitalism allowed many nationalist democratic petty millionaires to be co-opted.
We can see how capital gains begin to matter exponentially once you start getting into 5% of the population. Capital gains only added 95 billion dollars in wealth for 90% of the population (split between over 130 million households) but they added 678 billion dollars to richest 10%. Incomes of the non-professional elite oligarch class, of those 0.1%+ jumped 60%. Capital gains only increased income of bottom 90% by just 2.3%. Republican leadership effectively convinced a large portion of 50-100 grand a year white collar demographic that they're working in their interest and that capital gains will actually unburden them financially. It was remarkable that the same tactic always used on poorly educated religious blue collar demographic also worked on petty white collar. Even the petty millionaires, tied to expensive property bubble speculation, got politically seduced sufficiently to throw their financial support to the internationalist super rich.
In 2003, something historic happened. For the first time since 1928, the top 1% of the population surpassed bottom 99% when it comes to rate of wealth generation. Rate of wealth generation is a good indicator of the overall political power of a faction when it comes to dividing the limited resources of a nation.
Recently, government of Brazil has declared major success in reduction of poverty by citing that the top 10% went from owning 49.47% of annual national income in March 2002 to owning 46.31% in October 2008. Obviously we don't know to what degree the stock crash and capital gains reduction in fall of 2008 played into that. The fact of the matter is that Brazilian leadership, presiding over one of the most economically unequal societies on the planet, cited rise in share of bottom 10% and decline in share of top 90% as a measure of progress. In United States however, the richest 10% began to earn 49.3% of national annual income in 2006. The GINI index of inequality shows that US has been becoming more like Brazil for the last 30 years. US gap between the poorest and richest started off roughly in same category as other Western nations (even Norway) in the 1960s, and is now surpassing some South American nations in width.
CONCLUSION:
Political scientists consider extreme levels of socioeconomic inequality to be socially destabilizing in terms of factional infighting, violence, and authoritarian control of government organs by the elites for self enrichment. United States seems to have escaped social instability due to its great power status and most of its population living in an ideological bubble (and most people never traveling outside of the country). Only in relatively recent times, did the top 30% of the population begin to get exposed to other hybrid systems through increased international travel.
The peak of American civilization seems to have occurred in 1968-1973 period. Data points to 1973 as being the furthest extent of American industrial capitalism and real physical influence for most of its population. This strength even existed after being partially drained through resources devoted to colonial occupation.
The richest 1% expanded their share of wealth far less than the bottom 99%. The rise in prices briefly corresponded to real incomes. American workers were able to save and better their condition without constantly being a few steps behind either inflation or oligarchal factions. The country had historically high degree of economic equality, the burden of natural resource imports was only in its infant stages, and American workers were at the peak of their political and purchasing power. This allowed them sufficient leverage to effectively compete with oligarch factions for influence over the federal government. Federal government was prompted to engage in a number of nationalist measures that benefited all instead of some.
The health of the American society caused a multitude of reversals for socialist causes in the imperial periphery of Western Europe. Reactionary forces in Europe were able to stabilize their societies since American workers demonstrated that American way of life is more effective than the socialist one. Many European states elaborated on JFK/Lyndon Johnson's great society promises to solidify state capitalism.
In United States itself, the oligarchs took a number of years to reorganize and stage a comeback. The last nationalist president, who really tried to preserve American way of life and appeal to all Americans instead of some, was Jimmy Carter. He tried to improve efficiency of American capitalism through deregulation, improvement of workers' rights, new energy policy, and actually leading imperial periphery through ideological example. He had the misfortune of being in control of the nation right after its civilizational peak. Oligarchs effectively destroyed Carter's reputation and created a reactionary wave that relied on formerly apolitical religious rural population. Wedge issues, militarism, racial tensions, and rural resentment against the cities were exploited to put an appealing puppet (a former actor) in power. It took a few years to dismantle previous nationalist policies of Johnson and Carter. Once dismantled, the oligarchs began rapid expansion of their income in late 1980s that just accelerated to the present day. In the first half of the 20th century, many oligarchs were rooted to the American soil since travel on propeller aircraft was dangerous and ships/trains took a long time. That led to many early oligarchs to have nationalist tendencies, improve value of nearby land, and to focus on real industry. With increased globalization, the oligarchs of 1980s now looked at the whole world as their playground and their cosmopolitan sentiments had little allegiance to United States. Physical decline of US and the debt were irreversible and mass looting began in the form of moving factories and personal material wealth abroad to other growing societies.
The fall of Soviet Union accelerated the process and allowed the looting to go on longer. American dollar could now be pushed onto hundreds of millions of new people and the national debt could be expanded. The Bush administration was the most blatant show of force by the top 1% and this period saw the peak of illusionary oligarchal finance capitalism. In 2008, millions of elite professionals and petty millionaires were finally able to outspend and wrestle away control from oligarchs. They were not making as much money from property speculation and energy prices made their businesses less profitable and lifestyles more expensive. Even then, the poorest of top 5% were only able to take power due to successful mobilization of college educated and blacks in sufficient numbers, financial capitalism declining for a few years, and occupational reversals in the Middle East. The resilience of the oligarchal faction is demonstrated by the fact their candidate only lost by less than 10% during the biggest economic crash since 1929.
Regardless of change in leadership, the petty millionaires now in charge, will only advance their own interests. Interests of the bottom 90% will only be satisfied if they are congruent with the nationalist industrial interests of democratic power elites. Socioeconomic inequality created over the last 30 years has become self perpetuating and can only be reduced through decades of top down effort combined with growing industrial economy producing tangible exports. Efforts in that direction are unlikely until United States hits economic rock bottom with corresponding social destabilization. Today the top 1% live in a country within a country.
The fragmented elite America (that John Edwards liked to talk about until the character assassination) is more advanced and freer than any country in Western Europe and with access to better medicine/education, cheaper land/energy, and more political control over their governance. US is structurally a more advanced South American society. The average citizen thinks there is progress due to modern expensive cars, clothing, and housing mingling with the rest. The old Anglo ruling ethnic group has learned during the gilded age to not make the extent of their material wealth obvious. In that, they followed their South American counterparts.
The newer assimilated ethnic groups of Irish/Italians/Slavs/Jews are more blunt with demonstrations of their material possessions. The consumeristic efforts of newer whites to fit in and catch up have infected all Americans. The poorest least educated people are encouraged to spend a month's paycheck on a new gadget or brand name clothing. This is no different than a Soviet worker spending 2 months worth of salary to buy blue Western jeans from a black market in the 1980s. The only difference between Soviet Union's black market and gigantic electronics stores in today's America, is that the latter is legal. However, the electronics and clothing stores are similarly dominated by goods made in foreign factories and operated by oligarchs exploiting cracks in ability of American industrial capitalism to provide for people's needs. This system is even less sustainable than the Russian one since it combines the Soviet infrastructural stagnation of 1980s with Yeltsin's gangster capitalism and economic inequalities of 1990s. Only rapid industrial/technological breakthroughs can make national decline safe and gradual.
