Wealth Concentrated in a Few Hands Not Compatible with Democracy
by John Lawrence
The book by the same name was written by Hedrick Smith. In it he quotes Louis Brandeis, a Supreme Court justice and advisor to President Woodrow Wilson: "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." I guess America has made its choice: democracy concentrated in the hands of a few. A new class system is taking hold composed of two classes - the 1% of super wealthy and the 99% of what formerly was the middle class. Now the middle class has been turned into the debtor class. To get anywhere, most people think, you have to go into debt in order to get a college diploma. Meanwhile, you run up credit card debt in order to live. Then add to that car payment debt and you have a perfect storm for the creation of the new debtor class regardless of whether or not you get a job when you graduate college.
A growing number of people will never pay off their student loan debt even over the course of a life time. Instead it will come to haunt them when their social security payments are garnished after they turn 65 or 70. The income gap and the wealth gap are continuing apace. The internet has facilitated this as certain companies like Google, Microsoft and Apple have established beachheads all over the world. The globalization of corporations has precluded local operations from getting started with the result that profits are shipped back to one corporate profit center instead of being distributed broadly.
Franchise Operations Extend Their Tentacles All Over the World
Franchise operations have very successfully replicated themselves forcing out local Mom and Pop operations. Starbucks and McDonald's, for example, have had the same result - their operations have forced out local one off Mom and Pop's so that the profits are not distributed world wide, but concentrated in corporate profit centers. The billionaire class, with money to burn, controls which enterprises get established with their "angel" investors and enormous IPOs that generate instant billionaires. Then Wall Street encourages them along or disses them if short term profits aren't up to their standards. They are selling boxes and widgets which do nothing to solve real world problems like war and climate change. To the contrary, they are mainly contributing to waste and climate change by inventing new military gadgets and gadgets which become obsolete as soon as the new model comes out. It is planned obsolescence which is the way that cars used to be manufactured before foreign makes gave American car manufacturers some competition.
Hedrick Smith writes:
In our New Economy, America's super-rich have accumulated trillions in new wealth, far beyond anything in other nations, while the American middle class has stagnated. What separates the Two Americas is far more than a wealth gap. It is a wealth chasm - "mind-boggling" in its magnitude, says Princeton economist Alan Krueger. Wealth has flowed so massively to the top that during the nation's growth spurt from 2002 to 2007, America's super-rich, the top 1 percent (3 million people), reaped two-thirds of the nation's entire economic gains. The other 99 percent were left with only one-third of the gains to divide among 310 million people. In 2010, the first full year of the economic recovery, the top 1 percent captured 93 percent of the nation's gains.
Wall street, no doubt, accounted for more than its share of economic gains following the Great Recession because US government policy and the Federal Reserve central bank policy was to bail them out in such a way that investors and Wall Street executives got paid 100 cents on the dollar for all their casino bets. It's as if everyone at the casino, regardless of their wins or losses, was turned into instantaneous winners and everyone went home with their pockets stuffed with cash.
By Keeping Interest Rates Low the Fed Has Screwed Savers
By keeping interest rates low the Fed, the US central bank, has screwed savers, mainly old people, and has created huge asset bubbles in the stock market and real estate. They are playing into the increasing financialization of the economy. Whether or not these bubbles will pop at some point, only investors are getting richer. Workers, who have seen no increase in their paychecks, are definitely not getting rich or even improving their financial situations. When the bubbles pop, the Fed will again use its tools of quantitative easing (QE) and money printing to bail out the rich and screw the poor. It worked in 2008; I'm sure they are planning to use the same tools again. This will increase the economic divide even more.
Politics at all levels is now a money game. Those who have the money, those who can contribute to political campaigns, those who can pay lobbyists to create the legislation they want, are the only ones who have access to government, especially at the national level. Unions used to represent the working class. Now unions to a large extent have gone bye-bye. Citizens United is a conservative 501(c)(4) non-profit organization in the United States started in 1988 with major funding from the billionaire Koch family. It brought a U.S. Supreme Court case known as Citizens United v. FEC, which greatly loosened rules governing campaign finance. So now the billionaire class has unprecedented access to the governing class which basically has become a subsidiary of the billionaire class and represents them almost exclusively.
Back to the Middle Ages
The economic structure of the Middle Ages is now being recreated. That was a time when the nobility owned all the land and the wealth while the rest of the people, the serfs, toiled in the fields and did their bidding in order to survive and get a few crumbs from the table. Trump's tax "reform" which consists mainly of tax cuts for the rich and for corporations will accelerate the trend towards a two class system - a neo-nobility and a neo-serf class. The masses of US citizens have played right into the hands of the wealthy by electing Republicans at all levels. Republican politicians and their donors can afford the best propaganda in behalf of themselves, convincing voters to vote for them despite the fact that they govern in the interests of the very rich. They have convinced the majority of the electorate that their best interests are served by pleasing their masters in order to get a few crumbs from the table.
When the majority of the American people wake up and realize that their best interests are served not be the billionaire class and the tripe they've been served by TV political ads, Rush Limbaugh and Fox news, they may start to realize that the agenda of some progressive Democrats like Bernie Sanders and Elizabeth Warren is their last best hope to convert the American Dream back into some semblance of what it used to represent.
