Watch

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

Add new comment

Sign Up

Article Tabs

climate chaos, carbon emissions, climate movement, Break Free from Fossil Fuels, worldwide climate protests, disrupting dirty power, Climate Mobilization, 350.org, keep it in the ground, renewable energy transition

Starting next week, a global wave of mass actions will target the world’s most dangerous fossil fuel projects.

protest movements, social mobilizations, movement of the squares, Occupy Wall Street, Podemos Party, Jeremy Corbyn, Bernie Sanders, protest demands, horizontal democracy, Arab Spring, Nuit Debout

The movements of the squares were a watershed moment that profoundly changed grassroots and institutional politics – they have enthused in equal measure as they have disappointed, both under-delivering and over-delivering on their promises.

Bay Bucks, alternative currencies, barter economy, alternative economic systems, Chong Kee Tan, community resilience, sharing economy, Swiss WIR

The Bay Area currency operates a commercial barter system – where businesses with unused inventory or excess capacity "deposit" their excess into an exchange, and “withdraw” other businesses’ excess goods and services instead of money.

climate crisis, climate information, Climate Feedback, accurate climate coverage

Climate Feedback brings together a global network of scientists who use a new web-annotation platform to provide feedback on climate change reporting.

Black Lives Matter, ACLU of Oregon, state surveillance, surveillance programs

Monitoring the social media use of BLM activists is an example of "how the level of trust between law enforcement and communities of color has been so damaged," the civil rights group says.

migrant crisis, East African migrants, migrant smugglers, organ trafficking

A week ago, on April 17, 400 East Africans drowned in the Mediterranean Sea after their boat capsized on the way to Italy – and when the numbers get this big, we forget that they are individual lives being lost, like this, every day.

Posted 4 days 8 hours ago
Panama Papers, tax avoidance, tax shelters, corporate tax evasion, Oxfam

The names on the list of "Broken At the Top" are like a who’s who of big business – and some of the headline figures are simply staggering.

Posted 2 days 1 hour ago
British academies, privatized education, lower teaching standards, low teacher pay, National Union of Teachers, Anti-Academies Alliance

“It is a complete bonfire of pay and conditions," said David Gilchrist of the Anti-Academies Alliance, who claims the government has "no evidence to back up the claim that academies improve educational standards – in fact the opposite is true."

Posted 3 days 2 hours ago

In recent weeks, thousands of people marched and were arrested on the steps of the Capitol demanding that the people’s voice be heard: that we the people, not money, be the driving force of our government.

Posted 4 days 8 hours ago
solar energy, rooftop solar, California clean energy policies, National Renewable Energy Laboratory, carbon emissions, San Francisco solar policy

Starting Jan. 1 of next year, new commercial and residential buildings here up to 10 stories high must install rooftop solar systems for heat or electricity – making San Francisco the first major U.S. city to enact such legislation.

Posted 4 days 8 hours ago
Panama Papers, tax avoidance, tax shelters, corporate tax evasion, Oxfam

The names on the list of "Broken At the Top" are like a who’s who of big business – and some of the headline figures are simply staggering.

migrant crisis, East African migrants, migrant smugglers, organ trafficking

A week ago, on April 17, 400 East Africans drowned in the Mediterranean Sea after their boat capsized on the way to Italy – and when the numbers get this big, we forget that they are individual lives being lost, like this, every day.

In recent weeks, thousands of people marched and were arrested on the steps of the Capitol demanding that the people’s voice be heard: that we the people, not money, be the driving force of our government.

British academies, privatized education, lower teaching standards, low teacher pay, National Union of Teachers, Anti-Academies Alliance

“It is a complete bonfire of pay and conditions," said David Gilchrist of the Anti-Academies Alliance, who claims the government has "no evidence to back up the claim that academies improve educational standards – in fact the opposite is true."

Black Lives Matter, ACLU of Oregon, state surveillance, surveillance programs

Monitoring the social media use of BLM activists is an example of "how the level of trust between law enforcement and communities of color has been so damaged," the civil rights group says.