Dashing Toward Oligarchy, Government Is Now a Protection Racket For the 1%

Search form

Dashing Toward Oligarchy, Government Is Now a Protection Racket For the 1%

Dashing Toward Oligarchy, Government Is Now a Protection Racket For the 1%
Thu, 4/24/2014 - by Bill Moyers
This article originally appeared on BillMoyers.com

A new report shows that top C.E.O.'s were paid 331 times more than the average U.S. worker in 2013. At the same time, the poorest fifth of Americans paid an average tax rate of 11 percent while the richest one percent contributed half that rate at state and local levels.

Government Is Now a Protection Racket for the 1%

The evidence of income inequality just keeps mounting. According to “Working for the Few”, a recent briefing paper from Oxfam, “In the U.S., the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.”

Our now infamous one percent own more than 35 percent of the nation’s wealth. Meanwhile, the bottom 40 percent of the country is in debt. Just this past April 15 — Tax Day — the AFL-CIO reported that last year the chief executive officers of 350 top American corporations were paid 331 times more money than the average U.S. worker. Those executives made an average of $11.7 million dollars compared to the average worker who earned $35,239 dollars.

As that analysis circulated on Tax Day, the economic analyst Robert Reich reminded us that in addition to getting the largest percent of total national income in nearly a century, many in the one percent are paying a lower federal tax rate than a lot of people in the middle class. You may remember that an obliging Congress, of both parties, allows high rollers of finance the privilege of “carried interest,” a tax rate below that of their secretaries and clerks.

And at state and local levels, while the poorest fifth of Americans pay an average tax rate of over 11 percent, the richest one percent of the country pay — are you ready for this? — half that rate.

Now, neither Nature nor Nature’s God drew up our tax codes; that’s the work of legislators — politicians — and it’s one way they have, as Chief Justice John Roberts might put it, of expressing gratitude to their donors: “Oh, Mr. Adelson, we so appreciate your generosity that we cut your estate taxes so you can give $8 billion as a tax-free payment to your heirs, even though down the road the public will have to put up $2.8 billion to compensate for the loss in tax revenue.”

All of which makes truly repugnant the argument, heard so often from courtiers of the rich, that inequality doesn’t matter. Of course it matters. Inequality is what has turned Washington into a protection racket for the one percent. It buys all those goodies from government: Tax breaks. Tax havens (which allow corporations and the rich to park their money in a no-tax zone). Loopholes. Favors like carried interest. And so on.

As Paul Krugman writes in his New York Review of Books essay on Thomas Piketty’s Capital in the Twenty-First Century, “We now know both that the United States has a much more unequal distribution of income than other advanced countries and that much of this difference in outcomes can be attributed directly to government action.”

Recently, researchers at Connecticut’s Trinity College plowed through the data and concluded that the US Senate is responsive to the policy preferences of the rich, ignoring the poor. And now there’s that big study coming out in the fall from scholars at Princeton and Northwestern universities, based on data collected between 1981 and 2002.

Their conclusion: “America’s claims to being a democratic society are seriously threatened… The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” Instead, policy tends “to tilt towards the wishes of corporations and business and professional associations.”

Last month, Matea Gold of The Washington Post reported on a pair of political science graduate students who released a study confirming that money does equal access in Washington. Joshua Kalla and David Broockman drafted two form letters asking 191 members of Congress for a meeting to discuss a certain piece of legislation. One email said “active political donors” would be present; the second email said only that a group of “local constituents” would be at the meeting.

One guess as to which emails got the most response. Yes, more than five times as many legislators or their chiefs of staff offered to set up meetings with active donors than with local constituents. Why is it not corruption when the selling of access to our public officials upends the very core of representative government? When money talks and you have none, how can you believe in democracy?

Sad, that it’s come to this. The drift toward oligarchy that Thomas Piketty describes in his formidable new book on capital has become a mad dash. It will overrun us, unless we stop it.

Originally published by Bill Moyers

Article Tabs

We must shift the national plan of action – taking the climate justice fight to the extraction hot spots, from Appalachia to Alaska and from the heartland to the coastal rigs and carbon export terminals.

It’s the first time one century has wrecked the prospects of the millennia to come, and it makes us mad enough to march – for those generations yet to come, our children, grandchildren, and their children.

The Rolling Jubilee group that grew out of Occupy Wall Street has purchased and eliminated a portfolio of private student loans worth millions at Corinthian Colleges in California.

Our window of opportunity to mitigate the climate crisis is narrow – and while it sometimes feels like an impossible burden, history shows people-powered movements like ours have succeeded before.

The solution to climate change is a system change – grounded in human rights and ecological stewardship, where communities and workers are in charge of investment priorities ensuring the right to live and work with dignity.

Organizers haven't been shy about their underlying intentions: using the September march in Manhattan as a platform on which to build an international environmental social movement unlike any previously seen.

Posted 4 days 5 hours ago

Shifting toward community-based renewable power is a strong thread running through Scotland's Radical Independence Campaign, and a free Scotland could inspire other countries to relinquish their fossil fuel addiction.

Posted 3 days 38 min ago

If you're planning to take to the streets in New York City or elsewhere this week, know that today's IMSI technology used by police or the FBI could greatly affect the privacy of your cell phone and protest communications.

Posted 2 days 4 hours ago

"We know it is fraud. They know it is fraud. We look to anyone brave enough to stand up and defend the rights of the people," says homeowner defender Sherry Hernandez.

Posted 4 days 5 hours ago

Using social media and alternative news networks, activists and citizen journalists have found new ways to tell Americans the real story – it's immediate, it's personal, its electronic and its everywhere.

Posted 2 days 4 hours ago

Brazil's president called NSA surveillance of her country “a breach of international law” and a violation of human rights.

With drones seemingly more in the public’s conscience than ever, anti-drone activists have just launched their most ambitious campaign to date.

For the last seven years, I’ve been studying the startling economic gulf between ordinary Americans and the people who represent them in the halls of power.

Fiction: Louder Than Words

“These civilians,” his hoarse cry, on camera for the world. “Why violence? Against peaceful protesters? Against your brothers and sisters, citizens like you, of this country!”

Thousands of protesters took to the streets of Madrid on Saturday to demand a referendum to abolish Spain's monarchy, just days after King Juan Carlos abdicated in favor of his son.

Sign Up