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“In The Name Of Free Speech”: The Supreme Court Has Given Us A Government Of, By, And For The 1 Percent

In case after case, the five conservative justices on the Supreme Court have held unconstitutional all efforts—state as well as federal—to restrain the corrosive influence of limitless individual and corporate expenditures and contributions in our electoral process. They do this in the name of free speech.

In their view, the First Amendment absolutely guarantees the wealthiest Americans the right to spend as much as they like to manipulate the American political system to their advantage. According to these justices, as long as the wealthiest Americans do not directly bribe politicians to vote in their favor, the Constitution demands the flow of money is beyond regulation and that the rest of us must simply let the chips fall where they may.

This conception of the First Amendment and of the American constitutional system is truly perverse. By defining “corruption” so narrowly, these justices have missed the central point of self-governance—our elected representatives are supposed to be responsive to the will of the majority.

I don’t mean to suggest, of course, that our elected officials are supposed to slavishly obey the will of the majority. Sometimes, the majority is wrong, and it is the responsibility of our elected officials—and our judges—to reject certain policies even if they are supported by the majority.

What our elected representatives are absolutely not supposed to do, however, is to reject the values and preferences of the majority of our citizens in order to curry favor with a small cohort of extremely wealthy individuals who are eager to leverage their wealth to gain control of our government. And this is so even if their money corrupts the system in ways that are more subtle than overt bribes. The vast majority of Americans understand this point clearly. Our five conservative justices do not.

Of course, this would not matter very much if the wealthiest Americans shared the values and preferences of the majority of American citizens. If their values and preferences were aligned with those of most other citizens, then this would not be much of a problem. In fact, though, there is no such alignment. On a broad range of issues, there is in fact a sharp divergence between the views of the wealthiest 1 percent of Americans and the other 99 percent.

Recent surveys reveal, for example, that 78 percent of Americans believe that government should guarantee a minimum wage high enough to keep a worker’s family above the poverty level, but only 40 percent of the wealthiest Americans agree; 87 percent of Americans believe that government should spend whatever is necessary to ensure that our children can attend good public schools, but only 35 percent of the wealthiest Americans agree; 81 percent of Americans believe that a top priority of government should be to protect the jobs of American workers, but only 29 percent of the wealthiest Americans agree; 68 percent of Americans believe that government should take steps to ensure that every American who wants to work has the opportunity to do so, but only 19 percent of very wealthiest Americans agree; 78 percent of Americans believe that our government should ensure that students who cannot afford to go to college can nonetheless manage to do so, but only 28 percent of the wealthiest Americans agree.

Still, none of this would matter if the wealthiest 1 percent of Americans had only 1 percent of the influence in the political process. It is natural, after all, that people disagree about these sorts of issues, it is natural that rich people might hold different views on certain issues than people who are not rich, and it is quite proper for these issues to be worked out through the political process.

What is distressing, however, is that our political system does not work that way. Because of the extraordinary power of money in the electoral process, and thanks to the decisions of our five conservative justices, the very wealthiest Americans have a wildly disproportionate influence on our political process.

According to a recent Russell Sage Foundation study, almost 70 percent of wealthy Americans contribute regularly to political candidates, roughly half are in regular contact with members of Congress, and more than a fifth affirmatively “bundle” their contributions with other wealthy individuals. In the 2012 election cycle, a total of 99 Americans (mostly billionaires) provided 60 percent of all the individual Super PAC money spent by candidates.

Of course, none of this would matter if money did not affect outcomes. But it does. In 2012, 84 percent of the House candidates and 67 percent of the Senate candidates who spent more money than their opponents won their elections. Although money cannot dictate the outcome of elections, it matters, and it matters a lot—which is why candidates spend inordinate amounts of time scrambling to raise it and why the wealthiest Americans spend it so “generously” to elect their favored candidates.

But even this might not matter if our elected representatives disregarded the source of their campaign funds and, once elected, sought to represent the interests of their constituents—rather than the interests of their largest donors. Unfortunately, recent research (PDF) by the political scientists Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University shows that it doesn’t work that way.

To the contrary, what they found is that, although average Americans tend to get the policies they want when those policies correspond with the interests of the wealthiest Americans, when their views diverge from those of the wealthiest Americans, they usually lose and the preferences of the wealthiest Americans carry the day. Most of the time, in other words, the 1 percent gets its way. Indeed, as Gilens and Page observe, when the preferences of the average American conflict with the preferences of the top 1 percent, “the preferences of the average American appear to have only a miniscule, near—zero,… impact upon public policy.”

In rather sobering terms, Gilens and Page conclude that, although Americans “enjoy many features central to democratic governance, such as regular election, freedom of speech and association, and a widespread [opportunity to vote], we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

And this, say our five conservative justices, is demanded by “freedom of speech.” This is so, they insist, despite the fact that the First Amendment was designed, first and foremost, to preserve, protect, and support an effective system of democratic governance.

As James Madison wrote in Federalist 52, the whole point of our system of governance is to make our elected officials dependent on the will of “the people”—not on the will of the “top one percent.” What we are witnessing is a severe and unprincipled corruption of the American political system, and it is mortifying that this corruption is being carried out not by self-interested politicians, but by the justices of the Supreme Court—in the name of the First Amendment. Can the irony really be lost on them?

 

By: Geoffrey R. Stone, The Daily Beast, June 3, 2014

June 4, 2014 Posted by | Democracy, Electoral Process, U. S. Supreme Court | , , , , , , , | 1 Comment

“Wealth Over Work”: We’re On The Way Back To “Patrimonial Capitalism”, Where Birth Matters More Than Effort And Talent

It seems safe to say that “Capital in the Twenty-First Century,” the magnum opus of the French economist Thomas Piketty, will be the most important economics book of the year — and maybe of the decade. Mr. Piketty, arguably the world’s leading expert on income and wealth inequality, does more than document the growing concentration of income in the hands of a small economic elite. He also makes a powerful case that we’re on the way back to “patrimonial capitalism,” in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent.

To be sure, Mr. Piketty concedes that we aren’t there yet. So far, the rise of America’s 1 percent has mainly been driven by executive salaries and bonuses rather than income from investments, let alone inherited wealth. But six of the 10 wealthiest Americans are already heirs rather than self-made entrepreneurs, and the children of today’s economic elite start from a position of immense privilege. As Mr. Piketty notes, “the risk of a drift toward oligarchy is real and gives little reason for optimism.”

Indeed. And if you want to feel even less optimistic, consider what many U.S. politicians are up to. America’s nascent oligarchy may not yet be fully formed — but one of our two main political parties already seems committed to defending the oligarchy’s interests.

Despite the frantic efforts of some Republicans to pretend otherwise, most people realize that today’s G.O.P. favors the interests of the rich over those of ordinary families. I suspect, however, that fewer people realize the extent to which the party favors returns on wealth over wages and salaries. And the dominance of income from capital, which can be inherited, over wages — the dominance of wealth over work — is what patrimonial capitalism is all about.

To see what I’m talking about, start with actual policies and policy proposals. It’s generally understood that George W. Bush did all he could to cut taxes on the very affluent, that the middle-class cuts he included were essentially political loss leaders. It’s less well understood that the biggest breaks went not to people paid high salaries but to coupon-clippers and heirs to large estates. True, the top tax bracket on earned income fell from 39.6 to 35 percent. But the top rate on dividends fell from 39.6 percent (because they were taxed as ordinary income) to 15 percent — and the estate tax was completely eliminated.

Some of these cuts were reversed under President Obama, but the point is that the great tax-cut push of the Bush years was mainly about reducing taxes on unearned income. And when Republicans retook one house of Congress, they promptly came up with a plan — Representative Paul Ryan’s “road map” — calling for the elimination of taxes on interest, dividends, capital gains and estates. Under this plan, someone living solely off inherited wealth would have owed no federal taxes at all.

This tilt of policy toward the interests of wealth has been mirrored by a tilt in rhetoric; Republicans often seem so intent on exalting “job creators” that they forget to mention American workers. In 2012 Representative Eric Cantor, the House majority leader, famously commemorated Labor Day with a Twitter post honoring business owners. More recently, Mr. Cantor reportedly reminded colleagues at a G.O.P. retreat that most Americans work for other people, which is at least one reason attempts to make a big issue out of Mr. Obama’s supposed denigration of businesspeople fell flat. (Another reason was that Mr. Obama did no such thing.)

In fact, not only don’t most Americans own businesses, but business income, and income from capital in general, is increasingly concentrated in the hands of a few people. In 1979 the top 1 percent of households accounted for 17 percent of business income; by 2007 the same group was getting 43 percent of business income, and 75 percent of capital gains. Yet this small elite gets all of the G.O.P.’s love, and most of its policy attention.

Why is this happening? Well, bear in mind that both Koch brothers are numbered among the 10 wealthiest Americans, and so are four Walmart heirs. Great wealth buys great political influence — and not just through campaign contributions. Many conservatives live inside an intellectual bubble of think tanks and captive media that is ultimately financed by a handful of megadonors. Not surprisingly, those inside the bubble tend to assume, instinctively, that what is good for oligarchs is good for America.

As I’ve already suggested, the results can sometimes seem comical. The important point to remember, however, is that the people inside the bubble have a lot of power, which they wield on behalf of their patrons. And the drift toward oligarchy continues.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, March 24, 2014

March 25, 2014 Posted by | Economic Inequality, Wealthy | , , , , , , , , | 1 Comment

“He’s No Aberration”: Tom Perkins Is Willing To Say What The Rest Of The Ultrarich Are Secretly Thinking

Tom Perkins incensed the Internet (again), when he suggested Thursday that only taxpayers should get the right to vote and that the wealthiest Americans who pay the most in taxes should get more votes. Yep, you read that right.

The sentiment is especially offensive when you consider the demographics associated with the statement (read: white and male), but it isn’t the most absurd thing he’s said. That would be a letter Perkins wrote to The Wall Street Journal on Jan. 24, in which he compared “the progressive war on the American 1 percent, namely the ‘rich’  ” to the persecution of Jews in Nazi Germany, particularly that the 1 percent face a “rising tide of hatred” akin to Kristallnacht, a series of coordinated attacks against Jews in 1938.

The strangest thing about the letter isn’t that he thought that or even admitted it in a paper of record. What boggles the mind is the outpouring of support he received from like-minded ultrarich Americans and conservatives.

Billionaire investor Sam Zell, appearing on Bloomberg TV recently, denounced what he termed “the politics of envy,” arguing the 1 percent have earned their position in society. “I guess my feeling is that [Perkins] is right: The 1 percent are being pummeled because it’s politically convenient to do so,” he said in an exchange with anchor Betty Liu. “The problem is that the world and this country should not talk about envy of the 1 percent. It should talk about emulating the 1 percent. The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.”

And The Wall Street Journal, a publication most beloved by the rich, similarly came to his defense. Anyone wondering whether the paper’s editors had printed Perkins’s letter to embarrass or expose him had their answer: They published it because they were sympathetic to the argument. Under the curious headline “Perkinsnacht,” the editorial board published an indictment of “liberals in power,” waxing dramatic about how “liberal vituperation makes our letter writer’s point.” The editors concluded: “The liberals aren’t encouraging violence, but they are promoting personal vilification and the abuse of government power to punish political opponents.”

Support for Perkins’s argument was so widespread that The Washington Post‘s Eugene Robinson wrote a piece questioning what exactly was making “some conservatives take a leave of their senses” in coming to Perkins’s defense. The best response to that question came (as usual) from New York Magazine‘s Jonathan Chait. “Perkins’s letter provided a peek into the fantasy world of the right-wing one percent, in which fantasies of an incipient Hitler-esque terror are just slightly beyond the norm.”

It wasn’t just the wealthy who came to Perkins’s side. One of the most cogent conservative arguments I read came from Michelle Malkin, who argued that it’s dangerous to marginalize a group, any group, even millionaires and billionaires. It was a good point, but it was something else in her piece that caught my attention. She called Perkins a “truth-teller” whose “message in defense of our nation’s achievers will transcend, inspire, embolden and prevail.” No matter, she lamented, “the mob is shooting the messenger anyway.”

That’s just it: Perkins isn’t an aberration, and his message is offensive precisely because it speaks to something a lot of rich people and conservatives actually believe. Perkins hadn’t gaffed. He hadn’t misspoken. Although he would later qualify his remarks, he was making a point that many of the uber-rich believe instinctively. They’re just too prudent to say so.

Perkins’s most recent statement—that people who pay more in taxes should get more votes—hasn’t had time to attract the kind of support his first one garnered, but it has parallels in Erick Erickson’s 53 percent movement. The RedState.org founder’s counterpunch to Occupy Wall Street’s “We are the 99 percent” slogan was meant to represent the 53 percent of Americans who pay federal income taxes. The assumption is that Occupy protesters are among the now famous (thanks, Mitt Romney!) 47 percent of the country who don’t.

The sentiment would resurface again on the presidential campaign trail when Romney said the thing that doomed his candicacy. A refresher: “There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe they are victims, who believe the government has a responsibility to take care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.”

Another thing Romney left off but might as well have said? Those who believe they are entitled to vote. Romney and Perkins have good reason to want to keep the 47 percent from voting. Namely, the 47 percent won’t make it a priority to protect the interests of the long-suffering 1 percent. They have more pressing concerns, like, say, groceries.

And that gets to another of Perkins’s fears: that the 1 percent is somehow endangered and at risk of “economic extinction.” To wit: “The fear is wealth tax, higher taxes, higher death taxes—just more taxes until there is no more 1 percent. And that will creep down to the 5 percent and then the 10 percent,” he said. It’s the irrationality of this fear that has garnered the bulk of media attention. But it’s also worth reflecting for a moment on just how poor Perkins’s conception of percentages is. (Pauses for dramatic effect. Moves on.)

There are a few other statistics Romney didn’t mention, such as that two-thirds of households that don’t pay federal income tax do pay payroll taxes. Or that 18 percent of all tax filers paid neither payroll nor income taxes. Of those who paid neither, nearly all of them were elderly or had incomes under $20,000.

Romney thought he was speaking in confidence, but Perkins isn’t worried about that. Perkins, as Malkin so deftly observed, is a truth-teller. He’s saying what the right-wing 1 percent truly believe but are too scared to admit publicly.

 

By: Lucia Graves, The National Journal, February 14, 2014

February 15, 2014 Posted by | Economic Inequality, Wealthy | , , , , , , , , | 4 Comments

Mitt Romney: The Corporate ‘Person’ And The One Percent

For Mitt Romney, the fundamental argument underpinning his presidential candidacy is his experience as a top executive at Bain Capital, the huge Boston-based private equity firm. That is especially true now because he must disown his most important achievement as Massachusetts governor — health care reform — in order to assuage the Tea Party extremists in his own party. But what does his business career tell us about the economic policies that might be pursued by the Republican front-runner — and about his worldview? Much could have been gleaned from the career history of George W. Bush, if only voters had paid closer attention to the unflattering reports of his experience as oilman and baseball team owner that accumulated in 1999 and 2000.

As the stories behind Romney’s success unfold in the coming campaign, the answer is likely to be that Bain Capital has prospered during the past quarter-century promoting a harsher brand of enterprise — one that ruins communities, impoverishes workers, and exports American jobs, all in the name of shareholder “value.”

In the current issue of New York Magazine, reporter Benjamin Wallace-Wells begins the process of unpacking what Romney and his colleagues in management consulting and private equity have wrought upon the U.S. economy. Wallace-Wells opens his narrative with a telling recent anecdote from the campaign trail in Iowa, where Romney lectured a disbelieving crowd on the issue of corporate personhood. When a heckler urged raising taxes on corporations, Romney replied with condescension: “Corporations are people too, my friend….”

Of course in the strictest sense he was right: The management, shareholders, and workers of every corporation are indeed human beings, and it is to those human beings that the money earned by corporations, after taxes, is paid. But as Wallace-Wells discovers, Romney and company have done much to change how those earnings are apportioned, encouraging massive increases in the amount appropriated by management and huge reductions in wages and benefits paid to workers. Creating incentives for managers to maximize stock prices — which would explode their own compensation — simultaneously undermined old-fashioned corporate responsibility toward employees, communities, and the nation as a whole. The deepest implication of the consultant creed that Romney represents is an ugly Darwinism — or so Wallace-Wells suggests.

But as consultants, there was only so much that Romney and the Bain crowd could do to change any corporation. Wanting to put their theories into practice, and sensing that big profits could ensue, they formed Bain Capital, whose record in corporate takeovers and turnarounds became the envy of the industry — and the ruin of thousands of workers and their families unlucky enough to become collateral damage.

The improved efficiency and productivity of private enterprise over the past two decades certainly were not without benefit to society, in lower prices, better technology and even, for a while, higher employment. But the perfect “alignment” of incentives between corporate managers and shareholders, without any regulatory brakes, led to worsening economic inequality, executive recklessness, stock manipulation, and a laser-like focus on the short term — in short, all of the ills that underlie American economic decline. Those same incentives have been trained on the political system to ensure decisions that benefit those same overpaid, seemingly sociopathic bankers and investors — now known as the “one percent.” They could scarcely hope for a more sympathetic candidate than the man from Bain.

By: Joe Conason, The National Memo, October 25, 2011

October 26, 2011 Posted by | Class Warfare, Conservatives, Consumers, Corporations, Economic Recovery, GOP, GOP Presidential Candidates, Health Reform, Ideologues, Middle Class | , , , , , , , , , | Leave a comment

   

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