Plutocracy: news from this remarkable year of de-democratization

I’m working on an essay called The Case for Plutocracy and wish to share a few studies and news stories that are influencing my thinking:

Breaking news: New government funding bill allows high risk trading backed by taxpayer money, enabled by political donors and spenders: Citigroup drafts provision of government funding rule. The result is to put capitalism (and especially ordinary American’s savings) at risk. Let’s repeat the 2008-2009 economic crisis, shall we? Most troubling for democracy, though, is the evidence that large financial interests draft legislation that is passed word for word (70 plus of 85 lines of text to be precise), and naturally these financial interests (JPMorgan, Goldman Sachs, Bank of America, Wells Fargo etc.) are big players in political finance. That’s the mechanism that earns our political system the title “plutocracy.”

“An analysis of the House vote on Thursday on the $1.1 trillion federal budget bill — which included a contested provision that will roll back a key rule of the Dodd-Frank law — shows that Democrats who voted in favor of the measure on average received nearly four times as much money from large financial institutions as others who voted ‘no.'”

Also, the funding bill raises the limit for private contributions to political party committees from about 100k to over 700k, or $1.5 million per election cycle- this is Congress doubling down on the Supreme Court’s ruling in McCutcheon. More corruption (undue influence of the wealthy over political outcomes) to follow. Congress says parties need this plutocratic funding provision in order to counter the influence of outside groups (SuperPACs, dark money, etc.)

And the drafting of that plutocratic funding provision itself seems corrupt:

American Oligarchy: groundbreaking study by Martin Gilens (Princeton) and Ben Page (Northwestern) appears to prove that ordinary Americans exercise no independent influence over law and policy as set by elected officeholders. Our political leadership is accountable to affluent citizens and organized interest groups representing business concerns and unaccountable to everyone else. Yes, progressives have long believed this to be the case, but now it’s rather well established, empirically speaking. Theories of democracy that held that officeholders were accountable to their geographic constituents or the median voter’s preferences have been discredited. Of course the term oligarchy is imprecise given the nature of the data analyzed by Gilens and Page. Oligarchy is government by a small elite group, but if the organizing principle of an oligarchy is wealth as opposed to nobility or standing in religious hierarchy for example, then the precise sort of oligarchy at hand is a plutocracy.

Click to access gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf

Similarly, Thomas Hayes: “I examine Senate responsiveness for the 107th through 111th Congresses. The results show consistent responsiveness toward upper income constituents.” State Adoption of Tax Policy: New Data and New Insights

The most “pernicious” effect of income inequality is that it drains political power from lower- and middle-class Americans and allows the richest to then begin “changing the rules in their favor”: MIT economist, Daron Acemoglu: “when economic inequality increases, the people who have become economically more powerful will often attempt to use that power in order to gain even more political power. And once they are able to monopolize political power, they will start using that for changing the rules in their favor. And that sort of political inequality is the real danger that’s facing the United States.” Commentary:

Washington gridlock helps the super-rich stay rich, and get richer”– how Congress doing nothing benefits the economic elite, another cutting edge academic study with real world explanatory power. “The researchers looked back over 70 years of data, and found that the more dysfunctional Washington is, the bigger the share of the pie the top one percent tends to grab.” Commentary here:

And gridlock/dysfunction are the “new normal”

And of course, Economic inequality so high that revolution looks to be inevitable— Thomas Piketty. The top 10% of US wealth holders own 70% of national wealth, while the bottom half of all Americans own just 2%, and other devastating facts about rising inequality–

Plus little hope for environmental regulations in this plutocratic system, meaning little hope of avoiding the climate crisis:

The Courts are also included within the plutocratic design- “Justice at Risk,” campaign contributions linked to judicial rulings.