Plutocracy Tightens Its Chokehold:
American Dream Gasps For Breath
By Robert S. Becker
18 August, 2009
Beyondchron.com
Despite recession, Americans continue to believe progress is sustainable, even if resources aren't – and that growth of total wealth generates prosperity for all. Heck, we’ve chiseled these mythical linkages into fabled founding documents. Doesn’t our Declaration affirm “life, liberty, and the pursuit of happiness,” for the first time dangling “happiness” as political carrot? Don't we boldly link happiness to life, which logically forecasts universal healthcare to sustain it? More pie in the sky opens our Constitution, promoting "the general welfare” by which we secure “the blessings of liberty to ourselves and our posterity.” Not just the greatest good for the greatest number, but for offspring, too. Lucky devils.
Thus, we enlist majority rule: this goofy nation officially broadcasts the welfare of the majority matters. Yet, what if that hallowed majority shoots itself in the foot, elevating one minority of schemers above all others? What if voters, prone to error and demagoguery, misplace their economic self-interest, and an invisible plutocracy sabotages the “general welfare” for the welfare of corporate generals?
By the way, “welfare” shares word roots with the following: well, will, (common)weal, and wealth, itself a linguistic cousin to health. Wealth still fosters health, underpinning hidden Social Darwinism at work, literal survival of the fittest fatcats. One federal researcher showed “most affluent” oldsters outlive poorer brethren by four years.
The U.S. of Plutocracy: Wealth Rules!
What would happen were the plutocracy to become less invisible? Unsettling research from UC Berkeley Professor Saez reinforces the three-decade trend that divides rich from everyone else, across all key measures. First, this stunner: by 2007 the top .01% population captured 6% of America’s total earned income, the highest ratio since the Roaring Twenties. The super-rich are not only much richer, but the rich have captured almost all national productivity gains since the early ‘90s. Second, the top 1% of families take home 23% of all income – after CEO-friendly deductions. In shock yet?
Do you still believe the correlation of total national wealth with majority prosperity? Superficially, it’s true: all boats rise when the top tier thrives. From ‘93 through ’07, total income increased 2.2% per year. But income for the top 1% surged 5.9% each year, leaving 99% of us averaging up 1.3% annually. Let’s not forget that 14 years of inflation, at 3% a year, totaled 46% – wiping out phantom improvements. Average middle-class families with only one income thus suffered a double whammy – less cash plus less purchasing power. What has been and remains “just around the corner” isn’t prosperity but paucity and loss – unemployment, foreclosures and tarnished golden years.
Big spenders, especially Reagan Republicans, worship this correlation not just to defend their present affluence but the limitless abundance dreams are made of. Paul Krugman verifies the magnitude of this gap is an American phenomenon, paralleling three decades of union-busting, resulting in reduced group bargaining power. Union workers are now only 11% of the workforce vs. 30% two decades ago; Canada, by comparison, is still 30% unionized. Wealth disparity reflects not only weaker unions but corporate welfare (farm, mining and energy subsidies, lax or no regulations, or no-bid defense contracts) and sustained tax policy (income and estate loopholes) that act as the great “unequalizer.” This is not about low economic growth, but political leverage that favors the ruling oligarchy (so powerful liberals struggle to distinguish Obama's Wall Street policies from Bush’s). Despite a shift leftward in opinion polls, wealthy ultra-conservatives in power favored the upper crust with cake and everyone else with crumbs. Forget majority rule: rightwingers like Cheney glory in abysmal approval rankings because they reject majority opinion, whether about taxation, leaving Iraq or ending abusive, secret prisons.
Cream Rushes to the Top
Even more telling than income flow are overall capital asset gaps: American capitalism has concentrated more wealth in fewer households than any place but Switzerland (a special case, with 1/50th our population). Thanks to FDR, from the ‘30’s through the mid-‘70’s, family asset parity actually improved: the top 1% “bottomed” out in '76, owning but 20% of everything (back lately to 40%). Worse still, 10% today own 70% of American assets. 70%! In the UK, the top 10% owns 55%; in Canada, 53%; in Germany, only 44%. This “richest” nation on earth spreads wealth like a robber baron skinflint: if 10% own 70%, that means 90% of us own 30%, with gapping trends intact.
So much for fictions we are one, indivisible nation: many are no longer on the same cruise ship, let alone 3rd class. The American Dream is less available than in the 1970s, with mammoth inheritances reifying concentrations. This growing plutocracy undermines the ultimate, if fading American right: Freedom of Opportunity. Unfair taxation (including sales tax, the most onerous) is the key, and many rich view paying taxes as a sucker’s game. Further, if government is the ideological “problem,” the enemy of personal freedom, then more power to those who shrink public coffers.
Impeaching the Constitution
The inequality of income and asset ownership is not only the effect, but prime cause for less prosperity, especially promised "our posterity.” If what passes for majority rule fixes rigid class structures in place, what happens to our immigrant nation? Where is fabled economic mobility and subsequent innovations? Ironically, electing our first non-white president, with humble origins, reinforces a myth LESS true now than during Carter’s presidency: Obama is today's statistical fluke, hardly proof we are economically a fairer, more open, or more equal culture. Sure, some poor person will again be president; some will win the lottery, too.
Short of a second New Deal to offset today's Second Gilded Age, our vast majority is well within rights to sue prominent defenders of the sacred Constitution as welchers. If the Founders pledged a direct link between life, happiness and general welfare, let us hold responsible all those who have violated the spirit and letter of enduring covenants. How long will we sustain the fiction of equal opportunity, or that the majority still rules its destiny, or that everyone benefits, when an entrenched plutocracy owns 70% – lock, stock, and barrel. With the top 10% still earning 50% of all income, “lock, stock and barrel” fits all too well, however at odds with fostering a healthier democracy.
