CBS’ award-winning 60 Minutes March 30th telecast showed rather conclusively how the mega-financial institutions use high-speed flash trading software and hardware severely to tilt the playing field in favor of those tech-advantaged Wall Streeters, their traders and principals who trade on their own account and favored clients (all well-heeled) who bet on stocks and bonds side-by-side through them. Billions of profits that go to these flash-traders at the expense of all the other buyers and sellers in those national stock and commodities exchanges without such special access. The rich get richer.
Most of this cadre of rarified-air-folks fight like hell to keep their taxes down, to create loopholes and rights to overseas accounts that (if well-structured) avoid U.S. taxes, to preserve capital gains tax rates wherever possible while maximizing their deductions and to minimize regulations that might make the cost of their business operations a bit more expensive and their trading activities a bit more transparent.
To amplify and support those aspects of the American legal system that have given those at the top these special benefits, for that 1% to keep and grow their 42% of the nation’s wealth (while the bottom 60% only accounts for 2.3% of that wealth), they need every edge they can get to elect sympathetic legislators, state and federal, as well as governors and even the president (not to mention the judges that they appoint). It doesn’t matter if their message often twists or distorts the truth, that they are using sensitive “social issues” to get less affluent voters to vote unknowingly against their own economic interests, to support policies that decimate the environment and impose massive hard costs on those impacted… they really need to make sure that their taxes remain low and regulations minimal. Little else matters to too many of them.
The new Tea Party wing of the GOP is gung-ho for this marriage of “give us rich folks all the breaks you can” with “we’ll support your social issues.” Speaking at the University of Michigan on April 2nd and responding to former GOP VP-candidate, Rep. Paul Ryan’s, proposed budget proposal, here’s how the President described that budget and Republicans with the above policy restatements: “Here’s the truth: They’re not necessarily cold-hearted…They just sincerely believe that if we give more tax breaks to a fortunate few; and we invest less in the middle class; and we reduce or eliminate the safety net for the poor and the sick; and we cut food stamps and we cut Medicaid; and we let banks and polluters and credit card companies and insurers do only what’s best for their bottom line without the responsibility to the rest of us, then somehow the economy will boom and jobs and prosperity will trickle down to everybody.”
Underemployment has reached new sustained lows, the trickle-down economic theory has almost no serious support from trained economists anymore (this Reagan-era mantra just didn’t work), and there is zero evidence of any linkage between any of the recent tax cuts and solid job creation. But to get elected, conservatives need money and campaign support, a pretty easy trick these days.
In fact, it is easier than ever to connect with the super-rich to offer to do their bidding... in exchange for campaign support. Back in 2010, the Supreme Court imbued labor organizations, corporations, and other similar business entities with personhood, such that they were entitled to the free speech rights accorded to people under the First Amendment.Citizens United vs. FEC effectively gave those with the ability to buy massive ad campaigns to support candidates and express views – as long as there was no direct linkage to the candidates themselves – an unlimited, uncapped right to buy as much media as their hearts desired. In the following election, SuperPacs exploded, mostly supporting candidates on the right, the darlings of the mega-wealthy and those with social conservatism on their agenda.
In late March, a parade of most the biggest GOP presidential hopefuls visited a special gathering sponsored by Vegas billionaire and super-contributor Sheldon Adelson (pictured above), whose less-than-secret agenda is to ban internet gambling (making this Vegas casino assets that much more valuable). They pitched Adelson, and he listened. He sat in judgment, his billions jangling in the background. “After hearing speeches by Kentucky Senator Rand Paul, New Jersey Governor Chris Christie, former Florida Governor Jeb Bush, and several others who were for sale, Mr. Adelson concluded that none of them are worth owning… ‘I don’t want to spend millions on another loser,’ said Adelson, who purchased both Newt Gingrich and Mitt Romney in 2012… The casino magnate was scathing in his assessment of the candidates he declined to buy, calling them ‘a third-rate grab bag of has-beens and dimwits.’” NewYorker.com, March 31st. But the fact that big money could even cause such candidates to grovel for cash says a lot about our political system and how it is particularly well-shaped for those with lots of money to call the shots.
Yet the litany of Supreme Court interventions in favor of the rich has not ended. “A split Supreme Court [on April 2nd] struck down limits on the total amount of money an individual may spend on political candidates as a violation of free speech rights, a decision sure to increase the role of money in political campaigns.
“The 5 to 4 decision sparked a sharp dissent from liberal justices, who said the decision reflects a wrong-headed hostility to campaign finance laws that the court’s conservatives showed in Citizens United v. FEC , which allowed corporate spending on elections… ‘If Citizens United opened a door,’ Justice Stephen G. Breyer said in reading his dissent from the bench, ‘today’s decision we fear will open a floodgate.’
“Chief Justice John G. Roberts Jr. wrote the opinion striking down the aggregate limits of what an individual may contribute to candidates and political committees… The decision did not affect the limit an individual may contribute to a specific candidate, currently $2,600.” WashingtonPost.com, April 2nd. The case, McCutcheon v. FEC, strikes down a 40-year-old statute governing campaign spending, and flies in the face of election reformers from both sides of the aisle:
“While the aggregate limit was part of the post-Watergate campaign finance reforms in 1974, it was adopted as part of the package of changes to the campaign funding system that Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) pushed through Congress at the start of the last decade. ‘I am concerned that today’s ruling may represent the latest step in an effort by a majority of the Court to dismantle entirely the longstanding structure of campaign finance law erected to limit the undue influence of special interests on American politics,’ McCain said in a statement [April 1st] morning.” The Post.
How do average Americans feel about these campaign laws? “A Gallup poll conducted in June found that 8 in ten Americans, if given the opportunity, would vote to limit the amount of money candidates for the Senate and the House of Representatives could raise and spend on their election campaigns…Unlike the Supreme Court’s decision, which was split along ideological lines, the public’s views are cohesive. The poll found that broad majorities of all Americans, regardless of their political philosophy, party identification, age, education, sex or income level, preferred limits on campaign donations.” New York Times, April 2nd. But who cares what the people want? The rich, who obviously make the rules, have voted, and theirs is apparently the only voice that matters. Welcome to the Plutocracy of the Semi-United States of America! Kingmakers and power moguls, prepare to see thy candidates in review for thee to select, to bestow your wealth in exchange for forever-fealty. We’ve simply legalized what is considered campaign corruption in many other countries.
Whatever the long term impact of this litany of unfair advantage accorded to those with money, the United States now has an income spectrum that can be found nowhere else in the developed world. It faces a contracting middle class, a growing underclass with a decreasing percentage of the economic pie and severe and fairly-recently-generated concentration of wealth in a very narrow slice at the top of the socio-economic ladder. Even as many of those nations pejoratively referred to as “banana republics” are showing an explosive growth in their own middle classes, particularly the large economies of Mexico and Brazil, our own statistical reality is moving U.S. numbers into that pejorative banana-like paradigm. And according to prestigious bodies like the IMF, such extreme polarization is toxic to overall economic growth, hope and opportunity.
If our judicial decisions, statutes and regulations continue to provide an increasing and disproportionate series of benefits to the rich at the expense of the rest of society, there is a really strong risk that we will lose the wonder we call the United States of America. Add a dash of costs from global climate change disasters, and we might see a big unraveling a lot sooner than we might otherwise predict. Throw in a well-armed civilian population, and you might see flashes of all those futuristic apocalyptic movies we love so well.
I’m Peter Dekom, and we all better start loving this country as whole and not fracture into a powerful and polarized “me and only me” segmentation.
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