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

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

Sign Up

Article Tabs

Greenland, Greenland melting, Greenland minerals, Greenland exploitation

Greenland’s potential is epic, but a young nation can be easily seduced and exploited.

Roxanne Dunbar-Ortiz, An Indigenous Peoples' History of the United States, Thanksgiving

Each November, Americans celebrate a mythical version of U.S. history – Thanksgiving Day's portrayal of the experience of Native Americans under the boot of settler-colonialism is one of the Empire's most cherished falsehoods.

Activism across the food industry is far more diverse than media stereotypes suggest.

Low pay, abusive conditions, no union representation — now employees are fed up and fighting back, as the city just across the Rio Grande from El Paso, Texas, is the center of a growing rebellion of laborers in border factories.

fit to work, U.K. mental health care crisis, mental health funding cuts, U.K. austerity cuts, U.K. austerity policies, National Health Service

Between 2011 and 2014, more than 4,000 people deemed "fit to work" died within six weeks following their Work Capacity Assessment by the U.K. government, shocking the nation and revealing a looming crisis in mental health care.

idiot america, Charles R. Pierce, saddled dinosaur, creationism, education, #blackoncampus, Million Student March, free education, college tuition, student debt, Fight for 15, Jonathan Butler, University of Missouri, hunger strike, green washing, Keystone

First, since when did stupidity become so popular? I guess since dinosaurs wore saddles – yes, saddles. Next up, education is a right and it's time to stop treating students like customers at a luxury store.

Posted 6 days 16 hours ago
Catalan independence movement, Catalan referendum

“In Catalonia we feel mistreated and misunderstood by the Spanish state, and we be believe we deserve to be a nation – so why can someone from Madrid say we are not? We have voted democratically and they just ignore us."

Posted 5 days 15 hours ago

One again, union leadership prioritizes political connections in high places over the best interests of its members.

Posted 4 days 15 hours ago
indigenous land, indigenous rights, LandmarkMap, right to land, indigenous land access

LandmarkMap, which provides information about indigenous and community lands on the national and local level, could be the most authoritative source for people seeking to secure rights to their most vital resource.

Posted 6 days 16 hours ago
ISIS, ISIS Paris attacks, Anonymous, Charlie Hebdo, Paris terror attacks, Anonymous war on ISIS

Expect massive cyberattacks. War is declared. Get prepared.

Posted 6 days 16 hours ago
negative interest, Zero Interest Rate Policy, central bank policies, bank bailouts, bail-ins, Silvio Gesell, Charles Eisenstein, Wörgl currency, free money, Dodd-Frank Act

If you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.

Four former Air Force service members who operated military drones have written an open letter to President Obama warning that the program of targeted killings has become a "driving force" for ISIS and other terrorist groups.

Syrian refugees, Rick Snyder, Michigan refugee relocation, ISIS, ISIS bombings, Paris terror attacks, Pontiac refugee resettlement

Last week, a group of eight investors announced a first-of-its-kind project to resettle refugees on land purchased in Pontiac, north of Detroit – but the Paris terror attacks put a sudden freeze on the plan.

indigenous land, indigenous rights, LandmarkMap, right to land, indigenous land access

LandmarkMap, which provides information about indigenous and community lands on the national and local level, could be the most authoritative source for people seeking to secure rights to their most vital resource.

Bernie Sanders, democratic socialism, Kshama Sawant, Socialist Alternative Party

Distancing himself from the “radical” label applied to self-described socialists in the U.S., the presidential candidate instead placed himself in the left-wing American tradition of Franklin Roosevelt and Martin Luther King Jr.