Private profit over public welfare is the core principle of capitalism. This enables big corporations to increase their power and exploit our donor-dominated political system. Democracy’s principle of all socioeconomic strata being served by elected representatives has been replaced by the profit-maximizing goals of big corporate donors, such that plutocracy is clearly our form of government, not democracy.
In 2010 the conservative Supreme Court strengthened capitalism’s control of government with 2 major rulings. The first, Citizens United v. Federal Election Commission, January 21, ruled (5–4) that laws that prevented corporations and unions from using their general treasury funds for independent “electioneering communications” (political advertising) violated the First Amendment’s guarantee of freedom of speech. The Court invalidated Section 203 of the federal Bipartisan Campaign Reform Act of 2002 (BCRA)—also known as the McCain-Feingold Act—as well as Section 441(b) of the Federal Election Campaign Act of 1971 (FECA), which the BCRA had amended.
The July SpeechNow.org v. Federal Election Commission ruling created Super Pacs, which are independent expenditure-only committees, and can raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates. The attacks ads flooding cable TV during campaign seasons are funded by Super Pacs and feature partisan-based personal smears against the opposing candidate.
These recent assaults on democracy are consistent with the long American tradition of aristocracy over democracy. Wealthy land-owning aristocrats were deemed the proper representatives in the American republic. In Federalist Paper No. 10, James Madison wrote, “Measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.” Madison noted the prevalence of the landed class, aristocracy, of his time. He worried what would happen if elections were open to all classes of people, as peasants outnumbered landowners, whose property would then become insecure. Madison stated the government should be constituted to protect the minority of the opulent against the majority, i.e., peasantry.
The United States evolved from its agrarian aristocratic republic into a capitalist behemoth-state. U.S. Treasury Secretary Andrew Mellon, 1921-1932, stated the capitalist agenda when confronted with The Great Depression. He urged President Hoover to refrain from using the government to intervene in the depression. Mellon believed that economic recessions, such as those that had occurred in 1873 and 1907, were a necessary part of the business cycle because they purged the economy. In his memoirs, Hoover wrote that Mellon advised him to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down. … enterprising people will pick up the wrecks from less competent people.”
But the capitalist-control of the government was finally countered by President Franklin Roosevelt’s New Deal policies with new regulatory agencies and programs to help the non-wealthy get jobs and government assistance. From 1933 to 1973 the GDP of the United States grew 600%, 4.88% annually. This era marked the closest approximation by our government to a democracy, having been clearly a plutocracy before. By contrast, the GDP growth of 1973 to 2016 was 202%, 2.88% annually. The postwar boom had wages increase 4.5% annually 1948-1966, then 3% annually 1966-1979. Since the early 1970’s wages have stagnated, and are “essentially at 1974 levels” despite the fact that U.S. GDP grew from $5.66 trillion to $18.05 trillion in the same period. Wealth in capitalist state flows upward, not downward.
With democratic policies assisting the non-wealthy, wage growth exceeded corporate profit growth: 4.5% vs 4.2% for 1948 to 1966, 3.0% vs. 0.1% for 1966 to 1979. The anomaly of a pro-labor democracy replaced the pre-FDR plutocracy. Since then, we’ve returned to a plutocracy with wages stagnating as corporate profits increased over time. From 2000 to 2007, a real estate bubble fed corporate profits for 5.3% annual growth while wages grew 0.4%. The new global capitalism minimizes labor costs by offshoring and thereby boosts profits for corporations. It is indeed Reverse Robin Hood economy. Our post-industrial economy is manifested by stock market bubbles, like the tech bubble of the late 1990’s, the real estate bubble of 2002-2008, and the Obama-Trump bubble from 2009 that seems to have ended in recent months.
With the assistance of corporate-funded media highlighting the drama of clashing candidates, twitter posts, and empty slogans subjected to analysis by cable-TV corpo-pundits, we now have the Trump Plutocracy. Big corporations benefiting from unlimited campaign contributions to politicians have their ultimate capitalist czar, Trump, to remove environmental regulations, promote pollution for profit by selling off or using public lands for this profiteering. Putting corporate wolves in government posts to regulate their own industries is essentially replacing government with big business. The private profit of management and wealthy shareholders is replacing the welfare of the public. The public service aspects of government are being crushed by capital. Any aspects of government reducing corporate profit margins are propagandized in trickle-down rhetoric in conservative MSM outlets.
One example of Trump’s letting capitalism crush democracy, is his crusade to unleash pollution in the nation’s waters, as reported in The Nation on 12/13/18. https://www.thenation.com/article/trump-clean-water-act/ Trump seeks to gut the Clean Water Act, to dismantle the federal law that protects the nation’s waterways, aquatic habitats and drinking water. The Nation reports:
“Early on in his administration Trump attempted to roll back key water protections by unraveling the Obama administration’s updated regulation to the CWA, which established a much broader regulatory scope for waterways nationwide. Though his earlier attacks on the CWA were blocked in court, Trump’s latest stab at destroying public health and ecological protections would essentially strip federal oversight from vast swaths of the country’s wetlands, streams, ponds, and related habitats. Because it threatens to leave major portions of communities’ water supplies and ecosystems virtually unprotected against pollution, environmental advocates have denounced the proposal as a blank check for corporations, agribusiness, and real-estate developers.”
In our capitalist-bubble-economy era, ten years have passed since the 2008 economic crisis began, usually designated by the 9/15/2008 bankruptcy of Lehman Brothers. The recovery and accompanying bull market, stock market bubble that began on March 2009, provide an occasion to reflect on how well or poorly people have done and these include the non-wealthy whose status is typically obscured by typical MSM reporting.
One prime example is how plutocrats in Michigan, even with democrat Obama as President, took the opportunity to profit by polluting Flint’s water supply since the cleaner water they had before cost more money. On April 25, 2014, Flint mayor, Dayne Walling ended Flint’s 50-year reliance on the Detroit water system. Water from the heavily polluted Flint River, both saved money and privatized profits with a new, private water system—the Karegnondi Water Authority (KWA). This callous profit-based decision was compounded by the failure to add chemical corrosion controls, setting in motion an environmental and health disaster.
https://www.wsws.org/en/articles/2018/04/27/flin-a27.html reported:
“Keishwaun Wade, a Flint high school student, told the rally, “It was a deliberate decision by our elected officials. They did not take into account our humanity and dignity which has been stripped away. They poisoned us. Our government failed us. Our voices have been ignored and silenced in spite of the truthfulness of our concerns. They are dismissing us and will not fix the problem. This is not the kind of society we should be striving for.”
In this post-industrial economy, the long-term trend has been welfare for the wealthy, the 1%, and austerity for the non-wealthy 99%. The statistics given on our “healthy growing economy” paint a rosey hue on reality. Before the 2008 meltdown, the U.S. employment/population ratio was 63.3%. The current ratio is 60.3%. The official unemployment figure is 3.9%, which is determined by dividing the number of jobless people who are looking for work by the total labor force—defined as all those people working or actively looking for work. In August that was 3.9 percent. If you factor in underemployed workers, those working less than full time not by choice, “discouraged” workers, those marginally attached — who would work but feel they can’t find a job — that adds about 12.3 million people to the unemployed total. This raises the rate of unemployed to 7.6 percent. The number of jobs advertised by employers and the number of workers who quit reached record highs in July 2018. The number of unfilled positions increased 1.7%, to 6.9 million, while the number of employees deciding to leave rose 3%, to 3.58 million.
The cornerstone of business and finance news is stock market performance, which is intended to represent the status of the economy as a whole, rather than the well-being of those who can afford a big stock portfolio. Since the 2008 crash, the S&P 500 has grown 3,315% (as of Oct 2018) whereas average wages have grown an annual average of 2.03%. The vast majority of Americans, the bottom 80% in income, own 6.7% of all stocks. The top 10% own 84% and the next 10% own 9.3%. Contrast this salient real fact with the claims of Trickle Down economics.
Since the major recession of 2008, largely attributed to excessive mortgage debt, consumer debt is even worse 10 years later. The debt has shifted from mortgage to auto loans and student loans. The continued reliance on debt reflects how corporate profits tend to flow upward to the wealthy rather than downward to middle or low income workers. Auto loans rose by 42% over the past ten years, from $798 billion to $1.13 trillion, with the average loan 69.5 months (over 5.75 years). About 1/4 of auto loans are to people with subprime or deep-subprime credit ratings. Student loans have skyrocketed to $1.53 trillion from 627 billion in 2008. There are 44 million student borrowers who owe an average of $37,000. Overall consumer debt is $13.95 trillion, 4.7% higher than in 2008, despite the fact of a slight reduction in mortgage debt. This debt averages out to $42,660 for each American. This dismal state of indebtedness does not factor into typical acclamations of the strong economy as reported by the mainstream media.
The less than rosey reality of economic status for the non-wealthy is intentionally hidden by business reporting for the simple reason to make people think they are doing better than they really are. Big powerful corporations own the mainstream media and prefer to have content workers over discontented ones. The economic system for decades has been plutocratically driven, a series of bubbles, fed by globalization, being able to offshore jobs and decrease wages and thereby boost profits. The claims provided by trickle down economics have proved to be false with real median male wages lower than they were in 1975. The increased participation by women in the workforce facilitates the use of household income as a statistic. The inclusion of more two-breadwinner households offsets the fact that mens’ incomes do not keep pace with inflation and more women must work to offset this fact. Clearly, the “American Dream” of decades past has deteriorated, is less possible, less often achieved than it was 40 years ago. Clearly plutocracy is both the economic and governmental system, rather than democracy. The increasing struggles of average non-wealthy Americans to merely “get by”, pay monthly bills, let alone aspire to achieving loftier career goals, are direct results of a continual dismantling of democracy by the plutocracy. Profits come from paying people less, either here or outside the U.S., and these flow upwards, not downwards, as the facts I state here demonstrate.
SOURCES:
https://www.jacobinmag.com/2015/01/capitalism-democracy-citizens-united
https://www.opensecrets.org/pacs/superpacs.php
https://www.britannica.com/event/Citizens-United-v-Federal-Election-Commission
https://founders.archives.gov/documents/Madison/01-10-02-0044
https://en.wikipedia.org/wiki/Andrew_Mellon
https://www.fool.com/investing/2018/08/14/real-us-wages-are-essentially-back-at-1974-levels.aspx
http://www.smartbrief.com/branded/635D2192-7CCE-4A2F-B6DB-0EC8232131AD/920EB83B-7831-4239-9BCD-8D5302D9A863
https://www.advisorperspectives.com/commentaries/2016/09/14/almost-six-million-unfilled-jobs-in-america-question-is-whyread:
https://www.dailymail.co.uk/wires/pa/article-5295767/Worlds-richest-gained-82-new-wealth-2017-Oxfam-report-shows.html
https://www.politifact.com/california/statements/2018/sep/18/ro-khanna/what-percentage-americans-own-stocks/https://www.businessinsider.com/trump-says-94-million-americans-out-of-labor-force-in-speech-to-congress-2017-2
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