“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” — Warren Buffett, currently the world’s third richest person
Most Americans have the sense that something’s wrong in our country, and most realize that it’s intimately tied up with money and politics. Those who have not studied the issues deeply could be forgiven for thinking we have a foreclosure problem, or an unemployment problem, or a Democrat problem, or a Republican problem, or a problem with Congress as a whole, but the truth is more important than those symptomatic issues. The truth is that we are now living in a nakedly plutocratic state– that is, a state which is run by, and for, the wealthy. Or perhaps a corporatocracy (a state run by, and for, corporations), but they are functionally the same thing.
Every so often, a whistleblower emerges from within the ranks of these wealthy lawmakers to give us plebians a look at the way the system really works, as opposed to the way we all thought it worked. Ted Kaufman was appointed to be a placeholder for the seat vacated by now-Vice President Joe Biden. Ted Kaufman is not running for re-election, and therefore has no reason to dance around the issues. During his two-year term, he has fought against the worst of Wall Street’s excesses, unencumbered by a need to raise funds for a re-election campaign. He led an effort to break up the “too-big-to-fail” banks– an effort that ultimately ran out of gas due to lack of support from the White House. In a new interview with the Huffington Post (h/t Erich) he explains the conundrum facing even well-meaning Senators in our modern America:
“It is a perfect catch-22,” said Kaufman, explaining that his campaign against the banks “wouldn’t have existed, no, because I’m not on the banking committee. I would have stuck to my bidding on judiciary and foreign relations.”
And without the campaign against the banks, he wouldn’t have the supporters he now does. “I wouldn’t have this rabid” following, he said. “That’s the whole thing. It was a Catch-22. There’s no way I could have — my race, if I ran, would be totally, you know, standard, cookie-cutter campaign. I wouldn’t have had anything to show. I never would have been able to do any of the things that would really be the major things in my campaign, because the whole stuff I’d done on financial reform–we never would have been part of the debate.”
Kaufman said he would have watched the debate from afar. “I would have said, ‘Jeez, you know, I’m really upset about this and that,’ but I wouldn’t have had the time. I would not have not done it because I didn’t think it was politically” the smart move, he said.
Were he running in 2010, he added, he’d be facing a massively well-funded opponent, thanks to his opposition to Wall Street. “If I was a senator from a big state, New York, California, Illinois, the money–you couldn’t win against the intensity of something like that. I would have been totally overwhelmed by the money. I guarantee,” he said. “If I was in Illinois, whoever my opponent was would be the best-funded person.”
Essentially, the effort to reform the banking industry to eliminate ongoing systemic problems is doomed to fail by the need for insane levels of campaign cash. Take a look at the scale of the entrenched problem:
A full 90 members of Congress who voted to bailout Wall Street in 2008 failed to support financial reform reining in the banks who drove our economy off a cliff. But when you examine campaign contribution data, it’s really no surprise that these particular lawmakers voted to mortgage our economic future to Big Finance: This election cycle, they’ve raked in over $48.8 million from the financial establishment. Over the course of their Congressional careers, the figure swells to a massive $176.9 million.
…
But if you follow the money, it’s obvious why so much work remains to be done on financial reform. This year alone, Wall Street spent a staggering $251 million fighting financial reform. According to a separate analysis of campaign contributions performed by Public Citizen, lawmakers who voted with Wall Street on both the bailout and reform received nearly triple the campaign cash of those who opposed Wall Street ….
Despite the popularity of Wall Street reform, 90 members of Congress didn’t even want to publicly pretend to support reining in almost universally reviled banks.
The recent Citizens United ruling from the Supreme Court allowed unlimited spending by corporations on electioneering. Unsurprisingly, they are spending in record amounts:
Based on the latest financial reports, House and Senate candidates in this election cycle raised nearly $1.2 billion, well ahead of the pace for contests in 2008, 2006 and 2004.
Races for governor in 37 states – more than half of those for open seats – are also setting fundraising records. Billionaire Republican Meg Whitman leads the way, pumping $104 million of her own money into her campaign for California governor.
“We may be on track for the most expensive cycle ever, even more than ’08, which is really hard to believe,” said Michael Toner, a campaign finance lawyer at Bryan Cave and a former Federal Election Commission chairman.
Did you catch that? Billionaire Meg Whitman leads the way. Of course she does, the system is set up to reward those with money, and silence those without it. Your vote doesn’t matter when you are choosing from a pre-selected list of choices, none of which are relevant to you. For example, take the national debate over tax cuts for the wealthy. Does it matter personally to you what the top marginal tax rate is for those making hundreds of thousands of dollars a year? The outcome of that debate will not directly affect me at all, but it’s a keenly important issue to the wealthy– and the lawmakers are the wealthy. Again, the very definition of plutocracy.
It’s not just campaign finance, it’s everything. Take jobs, for example. The U.S. used to have a vibrant and powerful manufacturing sector, but outsourcing has decimated our manufacturing base. The recession has provided another hit, and record unemployment is no small part of the problem facing us. A bill this week that would have offered tax incentives for corporations to hire American workers and put an end to subsidies for corporations who outsource jobs was defeated narrowly. I’m less interested in the particulars of the bill, and more interested in the rhetoric. Critics of the bill say that it would have hurt the competitiveness of American companies abroad. Of course it would! That’s ought to be the whole point of an anti-outsourcing bill. But when the only standard you apply to a bill is whether it is good for business or not, actual living and breathing people tend to lose out. Wages are lower in developing nations than they are in the U.S. As things stand now, the government provides subsidies for companies to relocate manufacturing to third world countries, as well as providing them tax breaks to keep the money they earn in overseas subsidiaries rather than bringing it back to the U.S. These subsidies and tax breaks add an extra layer of profit on top of the wage savings, so the predictable result is that American workers lose out as jobs travel overseas.
Or, consider the issue of poverty. In the midst of the Great Recession, nearly 1 in 7 Americans is in poverty according to the latest figures. But are the plutocrats worried? Not in the least:
The reluctance of political leaders on both sides of the aisle to directly confront the fact that growing numbers of Americans are slipping into poverty reflects a stubborn reality about the poor: They are not much of a political constituency.
“We talk to many people on Capitol Hill who do believe poverty is important and is a blight on our nation,” said Weinstein, executive director of the Coalition on Human Needs, an alliance of national organizations that advocates for the poor. “But we are also up against a general recognition that poor people don’t vote in great numbers. And they certainly aren’t going to be making campaign contributions. That definitely puts them behind many other people and interests when decisions are being made around here.”
Simple, isn’t it? Those with money have a voice, those without money do not. I’m not sure that’s entirely what was intended by the Supreme Court ruling which enshrined the “money = speech” concept into case law, but that has been the practical effect. Now, the Court is hearing a case about whether corporations should also have privacy rights similar those offered to real people. If the case goes the way corporations hope it does, they will be able to block public access to information on corporate malfeasance. Predictably, Wall Street’s fingers are crossed that a ruling goes their way, especially since there are more than 120 active investigations into criminal activity as a part of the TARP program alone, better known as “the bailout”. Additionally, FBI Director Robert Muller says they are investigating more than 3,000 cases of mortgage fraud. Sadly, the FBI started warning about mortgage fraud as early as 2004, but the regulatory apparatus has been subverted by plutocrats and the warning went unheeded.
What’s the upshot? As always, the rich get richer, the middle-class is disappearing, and the poor get nothing. But that’s to be expected when the lawmakers are part of the group getting richer (again– plutocracy in action).
As a result, Americans are losing faith in their bedrock political institutions. An August Rasmussen poll found that Congress had a 23% favorable/ 72% unfavorable rating. A Gallup poll had similar findings— Congress ranked last in a list of institutions enjoying America’s confidence, and the institution of the Presidency has seen a 15 point drop this year, although it’s still higher than in the last year of W’s presidency. Overall, only 23% of Americans say the government has the consent of the governed, which is truly a terrifying statistic. Revolutions have been started with similar levels of mistrust. Significantly, the gap between the political class and mainstream Americans is about as wide as it can be:
A Rasmussen Reports national telephone survey shows that 67% of Political Class voters believe the United States is generally heading in the right direction. However, things look a lot different to Mainstream Americans. Among these voters, 84% say the country has gotten off on the wrong track.
In another recent poll only half of those polled said the American dream was still alive, while 43% said that the American dream used to exist but does not anymore. The pollsters defined the “American dream” as “if you work hard, you’ll get ahead.” What does it say about our country that nearly half of the country no longer believes that hard work is the key to getting ahead? It says that people are increasingly aware that the system is dysfunctional. The truth is that the American dream has died– those who are the furthest ahead do the least hard work of all. Those who have traditionally been the workers in this country have been stuck with stagnant wages for at least a decade, even for college graduates. The productivity of American workers has been steadily rising since at least the 1940’s, but wages have not kept pace. Where does the difference go? To the richest of the rich, of course. Consider CEO pay for an example:
Corporate executives, in reality, are not suffering at all. Their pay, to be sure, dipped on average in 2009 from 2008 levels, just as their pay in 2008, the first Great Recession year, dipped somewhat from 2007. But executive pay overall remains far above inflationadjusted levels of years past. In fact, after adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century.
American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 times what their workers made. In 2009, we calculate in the 17th annual Executive Excess, CEOs of major U.S. corporations averaged 263 times the average compensation of American workers. CEOs are clearly not hurting.
It’s clear that trickle-down economics does not work– nothing is trickling down. We need to be working to create a genuine, grass-roots, progressive movement to change the very foundations of way our political and economic systems work, before it’s too late.
This is a country founded on the right of the People to engage in revolution. http://www.ushistory.org/declaration/document/ If the plutocrats don't wisen up, they are going to find big mobs of people with torches and pitchforks yanking them out of their fancy houses and hauling them away.
But what can we do, short of revolution? There are many good ideas out there for reforming campaign finance, but these are in the process of getting destroyed by the U.S. Supreme Court with the insane money=speech mantra which, though certainly true in a Machiavellian world, is not the way things should be done in a rational and humane world.
There are many ways to level the playing field such that huge amounts of money won't overwhelm an opponent with much better ideas. This should be the guiding mantra: How shall we set up a system such that good ideas win, regardless of how well financed one's opponents are? Isn't this obvious? Not to the U.S. Supreme Court, and they aren't done yet. Just look what they did back in June, 2010:
The U.S. Supreme Court derailed a key part of Arizona's campaign finance system on Tuesday by at least temporarily blocking extra money for publicly funded candidates outspent by privately financed rivals or targeted by independent groups' spending.
http://www.cnsnews.com/news/article/67308
See also here: http://en.wikipedia.org/wiki/Davis_v._Federal_Ele…
This is depraved. We have, indeed, become a plutocracy.
Google CEO Eric Schmidt emerges as another whistleblower into the sleazy world of the plutocracy:
Paul Krugman has a scathing indictment of the right-wing of the plutocracy in yesterday's New York Times:
I'd say Krugman got it half right– he ignored the influence of the same billionaires on what passes for the left-wing of the plutocracy. He got it dead on when he said it's not about ideology, it's about business.
The rot of corporate influence has infected all three branches of government. An editorial in the New York Times points this out:
Hundreds of millions of secret dollars are pouring into congressional and state races in this election cycle. The Koch brothers (whose personal fortunes grew by $5 billion last year) appear to be behind some of it, Karl Rove has rounded up other multimillionaires to fund right-wing candidates, the U.S. Chamber of Commerce is funneling corporate dollars from around the world into congressional races, and Rupert Murdoch is evidently spending heavily. No one knows for sure where this flood of money is coming from because it's all secret.
http://www.huffingtonpost.com/robert-reich/the-se…
Robert Reich gives us the bad news and then offers a plan for taking back the country:
First, the bad news: "An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government. The three are obviously related."
Now, the plan:
http://robertreich.org/post/1263581986
Some will only like and permit money that supports their causes and worldview. This however is not a democracy, but a behind the scenes manipulation of the populace.
You can claim whatever you want about corporate America being "evil." Seems most of America is finally waking up to the idea that its really those who make money betting on others losing money that is just as evil if not more so.
Its easy to destabilize an economy with rhetoric and fear and political clout, and then also easy to make money from planned hedge funds targeted at the businesses/governments put under duress.
Capitalism must be evil, because it just can't keep everything even. The “hedge fund capitalist” is a real oxymoronic concept.
Just look at one the deconstructionists of capitalism, probably one of the champions of hedge fund profits behind the destabilization of currencies across the globe.
George Soros has been throwing big money around in all parts of the world for many, many years, and making money off of the corporate and political situations he pushes to the brink of disaster.
His goals are not as obvious to some but very clear to others.
http://www.discoverthenetworks.org/individualProf…
Karl:
I'm unclear as to your position here, although it's apparent that you don't like George Soros. From your link, I happen to agree with a number of the issues he is pushing:
# opposing virtually all post-9/11 national security measures enacted by U.S. government, particularly the Patriot Act
# depicting American military actions as unjust, unwarranted, and immoral
# defending the civil rights and liberties of suspected anti-American terrorists and their abetters
# advocating America's unilateral disarmament and/or a steep reduction in its military spending
# opposing the death penalty in all circumstances
# promoting socialized medicine in the United States
# promoting the tenets of radical environmentalism
# advocating the legalization of marijuana
Of course, there are also positions with which I disagree. But the deeper point still holds true: the power of George Soros is commensurate with his wealth, not the quality or appeal of his positions. In this, he is similar to the Koch brothers and others who seek wealth and power through governmental favors. The pro-business plutocracy is a big-tent party with many factions, each seeking their own advantage.
To say I dislike George Soros is not an acceptable statement as I have never met the man nor seen first hand how he uses his money to get what he wants.
My statements concerned the manner by which he obtains the money through hedge funds and currency speculation.
His apparent puppet organizations and foundations have not earned their money by producing food or products that meet the needs of those he claims to champion.
He and his organizations make their money by draining the capital from big corporations (including governments)and by the deflation of economies he considers as suseptible to his beliefs in international democratic socialism controlled through machiavellian domination.
Those with his type of international power which includes buying and selling of large scale interests in the destabilization of the economies of both big business and nations will one day be shown for what they are actually doing.
It is true that I disagree with most of what the causes and goals are of his puppet organizations. This is because I can see that his over arching goal is the deflation of any economy that does not agree with the central goals and causes that make up his worldview.
He uses his influence to combat nationalism, big corporations and capitalism and you somehow believe that nations, big corporations and capitalism should not be allowed to at least attempt to use their own resources to influence the very things people like Soros are granted impunity to attack on an international level.
Soros is not "big-business oriented." He is about a big worldview and politically oriented destruction of the power that resides in capitalism so that he can replace his ideology in the vacuum created when his pockets are filled by the losses of others.
Erich:
I'd like to hear more about your experience with Common Cause, if you get a chance.
I just noticed this item from the Wall Street Journal. Insider trading is illegal, unless you work in the halls of Congress:
It's time to impeach Scalia and Roberts!
The (multi-national) Chamber of Commerce is going full bore in it's attempt to take power from the People, according to Keith Olbermann and his guest, Robert Weismann of Public Citizen. The Chamber is consistently anti-regulation. http://www.msnbc.msn.com/id/21134540/vp/39585214#…
Who is funding the right wing attack ads run by the U.S. Chamber of Commerce? Good question. http://pr.thinkprogress.org/2010/10/pr20101012/in…
Erich:
Although the majority of the money from the Chamber is funding the right, they are perfectly willing to support Democrats who toe the pro-business-at-all-costs line. It's not a partisan issue, it's simply another piece of evidence for plutocracy:
source
Glenn Greenwald has another example of the blatant hypocrisy on the issue of campaign finance and the Chamber of Commerce. It turns out that White House Press Secretary Robert Gibbs has a history of using the same shadowy, undisclosed funding sources that he now decries.
Dan Froomkin has a great article up at the Huffington Post entitled "Access to Justice in U.S. at Third-world levels, says survey."
Does Robert Reich read Dangerous Intersection? If not, he and I have come to strikingly similar conclusions:
Brynn: If you haven't already, and if you would like to see and hear a vocally passionate version of this same message that we're becoming a plutocracy, watch Part II of John Nichols' recent speech: http://dangerousintersection.org/2010/10/18/on-re…
Nichols spoke of the need for a grassroots "revolution" to overturn a "corrupted" U.S. Supreme Court by enacting a new Amendment to the U.S. Constitution. Harsh words, indeed, but completely appropriate in my view.
Thanks Erich, I have been enjoying Nichols' commentaries as you've been posting them. (And I'm very glad to see that he too is a fan of Dangerous Intersection!) 🙂
Michael Moore recently had this to say:
"I have a rule of thumb that's served me well my whole life: whenever corporate executives begin talking about how they support "free markets" and "competition," check to see if you still have your wallet. That's because no one — not Karl Marx, not Fidel Castro, not your niece who owns the only lemonade stand on the block — hates competition more than corporations. The whole goal of a corporation is to crush all the competition. When corporate executives start pushing for "free market policies," what they mean is a government that lets them become a monopoly."
http://readersupportednews.org/off-site-opinion-s…
John Taylor Gatto indicts the wealthy (Rockefeller, Carnegie) in his book "The Underground History of American Education" for forming the system that my words, not his, but applicable to this thread)engenders acceptance of plutocracy. He says in Chapter 12 that
"In the founding decades of American forced schooling, Rockefeller’s General Education Board and Carnegie’s foundation spent more money on schools than the national government did. What can a fact like that mean?"
He goes on to say later in the chapter
"Reading through the papers of the Rockefeller Foundation’s General Education Board […] seven curious elements force themselves on the careful reader:
1) There appears a clear intention to mold people through schooling. 2) There is a clear intention to eliminate tradition and scholarship. 3) The net effect of various projects is to create a strong class system verging on caste. 4) There is a clear intention to reduce mass critical intelligence while supporting infinite specialization. 5) There is clear intention to weaken parental influence. 6) There is clear intention to overthrow accepted custom. 7) There is striking congruency between the cumulative purposes of GEB projects and the utopian precepts of the oddball religious sect, once known as Perfectionism, a secular religion aimed at making the perfection of human nature, not salvation or happiness, the purpose of existence. The agenda of philanthropy, which had so much to do with the schools we got, turns out to contain an intensely political component."
Gatto has strong, and to some, extreme opinions, but he worked in the school system for 30 years (I encourage checking his bio). If the Rockefeller Board did all the things Gatto claims, then the plutocracy has been managing the public school system for a long time to produce compliant sheep, accepting of the inevitable.
Now another plutocrat in Newscorp is molding opinion. Hmmm.
Gatto's book is available to read online here:
http://www.johntaylorgatto.com/underground/index….
Jim-
Thanks for your comments. I've been aware of Gatto for some time, and I respect his ideas a great deal. Gatto presents 6 ways in which traditional education is producing stunted kids:
(source)
Jim and Brynn: This summary of Gatto is something that I find haunting and real. I have school-aged children and I've been disturbed by these sorts of considerations, because this is the way that "good" schools are set up, and many parents are clamoring to get their kids into these "good" schools. I fear that they well-intentioned high-echelon schools are robbing our children of their childhoods. It takes guts to get off the treadmill, to say NO to 5 hours of homework per night. To say that education is not a matter of cramming all that stuff into your head. And yes, it IS like TV when what they are testing the kids on is a thick stew of inert facts.
We need the kinds of schools that have the courage to allow kids enough time to do things on their own outside of school, so that they can become self-reliant.
So you can see, I'm ready to ready Gatto, it seems.
I met and had a 20 minute conversation with Gatto at a homeschool conference in California in 1997 or 1998. I had read Dumbing Us Down and we were early in our homeschool odyssey. Our oldest two (now 23 and 20) had some public schooling, but being military and at the mercy of "orders" we pulled them out. Never went back. Our younger two (13 and 11) have never been to public school. When my oldest had homework in kindergarten (PS 39 Staten Island) in 1992, I was outraged. Still am when I hear from neighbors and friends. We've been doing it since 1997. Fortunately, Texas has good homeschool laws. Many states do not. That was one of our criteria when we decided to move back from Korea. I/we will not allow a public educator, or worse, administrator, (or "worser", State Education Board that chooses to modify textbooks to fit their warped religious perspectives) jurisdiction over my childrens' education. Somebody help me down from this soapbox, please!
I read Gatto's latest (Weapons of Mass Instruction) last year and consider it one of the most important works I've read. Ever. He's passionate, and that comes off as arrogant to some, but he speaks from a direct and deep knowledge base. I respect what he has to say.
Erich, I recommend you read Dumbing Us Down first. It's a very short treatise, but forms the framework for Weapons. It should make you say at least to yourself, "Yeah! What he said!"
The people can fight the plutocrats on their own terms.
The strategy for the corporate takeover of this nation is the concept of "de-funding the left", the left being the democratic part of our democratic republic.
The corporations are composed of insignificant individuals. removing any of the individuals from the corporate body, from the CEO down to the lowest laborer, and the Corporation continues. The corporation exists solely as a financial entity and can't be incarcerated, killed, or punished in any corporeal way.
It can, however, be starved to death.
Take the case of the multinational too big to fail banks. If enough people move their banking business from the banks to credit unions, The too-big to fail banks will shrink to the point where their failure is insignificant.
Buy local whenever possible. support small businesses over the corporate big box stores. Keep the money circulating in your local economy instead of sending it to China in exchange for crappy poorly made items constructed from toxic materials.
Defund the right.
Amen I say to you, Brother Niklaus!
Jim- I'd be interested to hear some more about your kid's education. What do they think of their homeschool experience? Are your oldest two pursing college degrees?
Niklaus-
I agree with everything you just said. It's the same strategy my wife & I have been focused on for the past few years. Interestingly, our newly-localized, anti-consumerist lives are much richer now.