The Perfect Storm
Monday 18 October 2010
by: Robert Reich | RobertReich.org
It's a perfect storm. And I'm not talking about the impending dangers facing Democrats. I'm talking about the dangers facing our democracy.
First, income in America is now more concentrated in fewer hands than it's been in 80 years. Almost a quarter of total income generated in the United States is going to the top 1 percent of Americans.
The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.
Who are these people? With the exception of a few entrepreneurs like Bill Gates, they're top executives of big corporations and Wall Street, hedge-fund managers, and private equity managers. They include the Koch brothers, whose wealth increased by billions last year, and who are now funding tea party candidates across the nation.
Which gets us to the second part of the perfect storm. A relatively few Americans are buying our democracy as never before. And they're doing it completely in secret.
Hundreds of millions of dollars are pouring into advertisements for and against candidates — without a trace of where the dollars are coming from. They're laundered through a handful of groups. Fred Maleck, whom you may remember as deputy director of Richard Nixon's notorious Committee to Reelect the President (dubbed Creep in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce, a third.
The Supreme Court's Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.
We're back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.
Just before it recessed the House passed a bill that would require that the names of all such donors be publicly disclosed. But it couldn't get through the Senate. Every Republican voted against it. (To see how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)
Here's the third part of the perfect storm. Most Americans are in trouble. Their jobs, incomes, savings, and even homes are on the line. They need a government that's working for them, not for the privileged and the powerful.
Yet their state and local taxes are rising. And their services are being cut. Teachers and firefighters are being laid off. The roads and bridges they count on are crumbling, pipelines are leaking, schools are dilapidated, and public libraries are being shut.
There's no jobs bill to speak of. No WPA to hire those who can't find jobs in the private sector. Unemployment insurance doesn't reach half of the unemployed.
Washington says nothing can be done. There's no money left.
No money? The marginal income tax rate on the very rich is the lowest it's been in more than 80 years. Under President Dwight Eisenhower (who no one would have accused of being a radical) it was 91 percent. Now it's 36 percent. Congress is even fighting over whether to end the temporary Bush tax cut for the rich and return them to the Clinton top tax of 39 percent.
Much of the income of the highest earners is treated as capital gains, anyway — subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modest. The top 15 hedge-fund managers earned an average of $1 billion.
Congress won't even return to the estate tax in place during the Clinton administration – which applied only to those in the top 2 percent of incomes.
It won't limit the tax deductions of the very rich, which include interest payments on multi-million dollar mortgages. (Yet Wall Street refuses to allow homeowners who can't meet mortgage payments to include their primary residence in personal bankruptcy.)
There's plenty of money to help stranded Americans, just not the political will to raise it. And at the rate secret money is flooding our political system, even less political will in the future.
The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that's raising its taxes, reducing its services, and unable to get it back to work.
We're losing our democracy to a different system. It's called plutocracy.
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Comments
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Well, we know what the W tax
Mon, 10/18/2010 - 18:35 — Anonymous (not verified)Well, we know what the W tax cuts for the rich are being used for--not to create jobs but to buy the government.
It's amazing how many people at present are buying into a theory of voodoo economics when the evidence of its failure is all around them.
In addition, America is bent on electing representatives from a party that denies global warming after the hottest summer in recorded history?
The zeitgeist is reckless, delusional, nightmarish.
The dems want to take money
Mon, 10/18/2010 - 18:52 — Anonymous (not verified)The dems want to take money from the middle class to pay for the deficit. 250K is middle class. Start taxing at a million per annum income. Americans are spoiled. The rich are spoiled, the poor are spoiled. there may be a huge difference between the rich and the poor today. But there is an even bigger gap between the poor 80 years ago and the poor today. While there is a million on the street. There is another 150 million watching the boob tube eating chips and drinking Bud and watching Oprah or Monday Night Football.
Hard to feel sorry for today's poor comparatively speaking. And if you want to get rich, come up with an idea and make it happen. Like Mr. Facebook. Get off your buns. This is American not a European Nanny State.
"250K is middle class. Start
Mon, 10/18/2010 - 19:14 — Anonymous (not verified)"250K is middle class. Start taxing at a million per annum income. Americans are spoiled."
You prove your point.
Also--in Europe the standard of living and life expectancy are both higher than in the U.S. And people have universal healthcare. Imagine.
I really hope the person who
Mon, 10/18/2010 - 19:21 — Anonymous (not verified)I really hope the person who posted at 23:52 is joking. First of all, I've always had a hard time thinking of a $250,000 salary as middle-class. Not that you're filthy stinking rich, either, but a quarter million dollars a year just doesn't strike me as middle class. But I'm sick and tired of hearing people talking down to the poor, basically saying "get off your ass and get a job", as if the people who are poor or are unemployed are poor or unemployed because they want to. Nobody said this was a European "Nanny State". But in the supposed wealthiest and most powerful nation on Earth, the government should be able to take care of the people who really make the country tick- THE WORKERS. Targeting the working class like you do is sad. The people who work hard to make things run when times are good are to blame when times are bad. Mr. Reich makes good points here- the American people and what little bit of a democracy we have left are being robbed right in front of our eyes. Now more than ever we need the same revolutionary spirit that we had back in the '60s to take to the streets like the French are doing right now. We could take an example from them. The French government tries to raise the retirement age two years, and just about the whole country goes on strike. Our democracy is being bought and we don't know by whom. And we sit and do nothing. So maybe we should be looking at those "European Nanny States" and learning a thing or two instead of blaming the poor and unemployed in our country.
Maybe we need a
Mon, 10/18/2010 - 20:51 — Skip Mendler (not verified)Maybe we need a Congressional resolution to the effect that plutocracy is officially recognized as the true American governing principle...
The most I've ever made in
Mon, 10/18/2010 - 21:03 — Anonymous (not verified)The most I've ever made in my life was $27,000 in one year. I'd LOVE to have made $250,000 in ONE(1) year. Geez! If you can't live on $250,000 a year there is something wrong with your life style. Please explain to me why Donald Trump, Paris Hilton, et al, can't part with another 5 mil a year in taxes to help out with some of the needs of their FELLOW citizens. Please explain.
$250K is middle class....
Mon, 10/18/2010 - 21:05 — Anonymous (not verified)$250K is middle class.... what planet is that?
I agree we need a revolution akin to the 1960s and do what the French are doing right now. Raise the retirement age to 62 and the French shut the country down. RIGHT ON!!! Here they want to raise the retirement age to 70 and AARP is flat on its butt.
Republicans always always always want to take the money from the middle class...never never never from the wealthiest.
http://thecurrent.theatlantic
Mon, 10/18/2010 - 21:33 — Anonymous (not verified)http://thecurrent.theatlantic.com/archives/2008/06/public-financing.php
To the second commenter: The
Mon, 10/18/2010 - 21:37 — Deverick (not verified)To the second commenter:
The only reason there are any "rich" in this country (or world for the matter) is because of the masses of people actually doing work for them. The income of the rich should be proportional to how their wealth-producing lemmings are doing.
Very few people can become Mr. Facebook or Mr. Microsoft. You know that, but are too cynical to say so. Saying that the poor are sitting around eating chips and watching the boob tube is the lousiest excuse in the book from heartless conservatives. Try again.
This country is dominated by corporations and wealthy puppet masters - end of story.
The culture of corruption
Mon, 10/18/2010 - 22:14 — Anonymous (not verified)The culture of corruption and racism Republican's Southern Strategy has worked, expanding to the rest of America.
I just watched Lawrence O'Donnell's extraordinary interview with author Isabel Wilkerson ("Warmth of Other Suns") and NBA legend Bill Russell, describing the exodus of black citizens from the hardcore, racist, caste-system South between1950 and 1970, in which blacks fled the whites-only South for friendlier, freer climes.
The Republicans have just expanded their Southern Strategy out of the South to the rest of our society, resulting in a new Caste System (based on the old), with the typically whites-only ultra-wealthy malignantly transforming our country into a Caste System, but based on a division between the rich and poor, the haves versus the have nots, with all levels of government bought and paid for by the ultra-wealthy (mainly whites), just like what was present in the Jim Crow South.
And I'm white. And from the South. But I'm not fooled. And I'm voting straight Democratic Party ticket this election, in an attempt to stop this conservative Republican madness, if possible, before they completely destroy our nation, and the future of our nation's children, no matter what their color of skin.
Some people are still under
Mon, 10/18/2010 - 22:17 — Alan8 (not verified)Some people are still under the delusion that this is a Republican phenomenon. In reality, the Democrats let it all happen.
NAFTA, media consolidation, corporate money in politics, no universal health care, allowing then expanding three wars (Afghanistan, Iraq, and Pakistan), overturning financial regulations, and watering down the bailout.
If you voted for either of these corporate parties since 2000, this is YOUR fault!
They both receive the majority of their money from the same corporate sources.
The Green Party doesn't accept ANY corporate money and represents CITIZENS' interests.
Even 1% - 2% of the vote for the Green Party will get the Democrats' attention, since that's enough to flip a close race. 5% will get the Green Party matching Federal funds.
"We're losing our democracy
Mon, 10/18/2010 - 23:25 — Lavrenti Beria (not verified)"We're losing our democracy to a different system. It's called plutocracy."
Change the "losing" to "lost" and the "plutocracy" to "fascism" and I'll buy that. But I'm afraid that the author of this fine piece imagines that the solution to the problem he poses can be found in the proper exercise of the franchise. And in this belief he is deluded, of course. We are quite beyond elections, the importuning of the resident social fascists here this Fall to vote Democrat notwithstanding. One fully suspects that we will have to go through a reactionary, tea party phase before we arrive at an authentic opportunity for a peoples' moment. Historical precedent for such a development clearly exists. One sits out this and any other election in good conscience, therefore. We're next.
Perfect_Guillotine_Storm Afte
Tue, 10/19/2010 - 00:24 — Kevin Schmidt (not verified)Perfect_Guillotine_Storm
After their fair trials, of course!
Hey kids! Now you too can build your own full scale working replica of the famous French Revolution Guillotine!
stewwebb.com/guillotine_symbol_of_tyranny.htm
I love it--$250K is middle
Tue, 10/19/2010 - 08:56 — Anonymous (not verified)I love it--$250K is middle class? That's what Faux News is now teaching its viewers?
Oh, those poor dears, how WILL they get by, facing such hardships . . .
Still can't take Reich
Tue, 10/19/2010 - 09:00 — NAFTA Reich (not verified)Still can't take Reich seriously, his past apologism for NAFTA is a bit disgusting. He claims that jobs weren't created to backfill the ones that NAFTA allowed to be shipped elsewhere for slave wages and exploitation. He claims this was the problem, he's either dishonest or looney.
Why is it when a stiff is appointed (DOL) they actually oversee some of the devastation like NAFTA, then years later, almost out of regret, they pick up the agitator's pen. Jeeze!
I don't think there can be
Tue, 10/19/2010 - 09:23 — Kym (not verified)I don't think there can be enough articles written about this, for no other reason than to keep raising awareness. Here is a very interesting graph that indicate "Americans are horribly misinformed about who has money". http://www.good.is/post/americans-are-horribly-misinformed-about-who-has-money/
Anyone who believes the monetary system is archaic should probably check out the Zeitgeist movement. But I'm guessing that's way too radical for these readers.
The faulty logic and general
Tue, 10/19/2010 - 11:54 — Anonymous (not verified)The faulty logic and general wrongheaded thinking of Anonymous @ 23:52 above reveals why these conditions exist in America and the world today. Should poor people be happy because they have it better than the Dark Ages? It is hard to feel sorry for people who employ such unsound thinking, but I will feel sorry for you. While there will always be "poor", a society without empathy that leads to programs for the poor is just Ayn Randian novel material. Eliminating poverty is a worthy goal, regardless of whether "those people" choose to live lives in ways that we do not approve of.
Mr. Reich spreads the myth
Tue, 10/19/2010 - 12:09 — Anonymous (not verified)Mr. Reich spreads the myth that most income in America is earned. The majority of wealth in the USA is inherited, and those billionaires don't want this democracy thing to touch all that unearned income.
They created the "death tax" tale to fool workers, but the dead pay no taxes, they are dead. In fact, the first two million is tax-free. Bill Gates deserves to be a billionaire, but do his children deserve to inherit billions of dollars tax-free while their maids, drives and butlers pay income tax?
what about the report just
Tue, 10/19/2010 - 14:11 — Anonymous (not verified)what about the report just out that shows 99% of Harry Reid's campaign funds came from business while 99% of Angle's came from people giving $200 or less? What about Geithner, Corzine and many others coming from and working on behalf of Goldman Sachs. It's true that Paulson & a bunch of GOPers did too but that's my point. The lines aren't so clear cut anymore. You do a huge disservice to the msg that you say you're trying to get out by painting republicans only as controlled by business. Watch food inc and see who used to work for Monsanto. Let's just be honest for once. The problem is so much deeper than dem and rep.
The people who give to
Tue, 10/19/2010 - 15:31 — Anonymous (not verified)The people who give to Angle's campaign scare me more than the corporations do.
. . . and those "99%"
Tue, 10/19/2010 - 15:55 — Anonymous (not verified). . . and those "99%" figures seem *highly* doubtful w/o adequate documentation.
Yeah, Angle brags about how
Tue, 10/19/2010 - 16:04 — Gonzo (not verified)Yeah, Angle brags about how much $$$ she receives each time she appears on Limbaugh's show and on the Faux News shows. A darling of the crazies.
In addition, tons of dough rolls into her campaign from the California tea partiers and from Rove's illegal operations.
Losing? I'd say LOST.
Tue, 10/19/2010 - 17:36 — elizabeth (not verified)Losing? I'd say LOST. Based on the ongoing failure to rid DC of special interests and the ongoing failure to reign in Wall Street, the banks, Big Oil, the Chamber, the health-care lobbies, and the military-industrial-intelligence complex, we're going to have to pull out an entirely clean, new bolt of cloth. I just pray we can do it nonviolently without Civil War.
One possible silver lining: If we repudiate the Tea Party, it will be one hellava slap in the face to these greed heads and their hired lackeys.
There is very little
Tue, 10/19/2010 - 17:59 — Anonymous (not verified)There is very little difference between an Asp and a Republican. They're both toxic and even deadly. The thing with the Asp is, at least they don't pretend to be anything but a snake!
I agree with Alan8 that the
Tue, 10/19/2010 - 21:10 — Uppity Woman (not verified)I agree with Alan8 that the Green party is the best hope for improving our situation as their platform is THE dream of the modern progressive movement. The problem is that voting Green can help Republicans win in close races, and I'm sorry, these thugs are worse than Democrats in many, many ways and I can't be a party to letting them gain control of congress this year (but yes, the Democrats do leave much- very much- to be desired). What we must do is destroy the Republican Party first; then the Republicans can no longer hold Green voters hostage, and the scoundrels in both parties will have to think of some thing more interesting than the good cop bad cop game they have been playing for over 30 years now (which, by the way, I doubt they have the intelligence to do). And if you think about it, why should it be that difficult to bring this party down? Just like the Whigs, they are doing everything they can to destroy themselves. No one likes a self-important hypocrite, and these folks have that up one side and down the other. They take themselves too seriously, have little of real value or importance to contribute, and would wither and die if we all just up decided to stop paying any attention to their "media." There are many ways we can affect the power structures in this country, and turning off the television is the easiest place to start.
Also, if you have money of your own in a bank, you are part of the problem. My money is in a credit union, and has been since the savings and loan debacle of the late 70's. Even my mom's one horse town in Podunk Alabama has its own credit union. Your town has one too, or if not, the town down the road does. Want to make everyone in DC wake up and take notice? Millions of us pulling our meager funds out of banks and putting them in credit unions would shake up more than a few folks. Go out tomorrow and make that one little change. If you have the means, take your mortgage, vehicle purchases, and credit cards to them too. The banks obviously think it is ok to screw the people, so I say, let's us screw them instead! Every action has consequences. Our actions matter very much, and if we all choose options that are in OUR best interests, we might finally see some of that change we've been looking for.
Man, all of you have valid
Wed, 10/20/2010 - 11:36 — Anonymous (not verified)Man, all of you have valid points. The guys saying 250k is middle class is not far from the truth. There are millions of millionaires out there, they drive podunk cars to work or in our neighborhoods to deceive and hide Lamborghin's in the garage until Sunday mornings. While 250k is the upper echelons of middle class, they are still not millionaires. Taxing at 1mil and up makes sense. I will be looking into the credit union idea, I was in one for quite a while then got out, maybe like the poster says if we all show the Wall Street homeboys a thing or two, government will take notice and man up, and own up to the fact they've been doing a horrific job at taking care of their people. Vent your anger with your VOTE.
http://www.rawstory.com/rs/20
Wed, 10/20/2010 - 13:28 — hannah (not verified)http://www.rawstory.com/rs/2010/10/memo-exposes-secret-list-conservative-donors-plotting-campaign-democrats-climate-change/
just because you're paranoid doesn't mean they're not out to get you. roughly HST
Bill Gates III is hardly
Thu, 10/21/2010 - 11:59 — Anonymous (not verified)Bill Gates III is hardly self-made.
Gates II is a prominent Seattle attorney and sent Bill Jr. to Harvard before the latter decided to strike out on his own and become a super plutocrat.
No rags-to-riches there.
It's hard to maintain a
Thu, 10/21/2010 - 14:12 — AnonymousDV (not verified)It's hard to maintain a condo in Florida for on $250K... my god, these fouls would have to switch to timeshares!
There was a time when there
Fri, 10/22/2010 - 19:50 — Anonymous (not verified)There was a time when there was a sense of outrage in this country. And a fourth estate that brought the weight of the public to bear on the idiots running us into the ground. Our owner class has completely wrung the necks of the golden egg layers, US. As happened in all countries who go through revilution (sic) when you have nothing to lose, that is the time when you get off of your easy chair and hit the streets. The French get riled over a change in the retirement age. We should be so lucky TO RETIRE. Outrage is muttered under the breath, and everyone seems to be waiting for some hero to come lead them across the Rubicon.
IT STARTS AT HOME PEOPLE. YOU ARE THE LEADER, THIS IS WHAT AMERICA IS ALL ABOUT! THAT'S WHY I CONTINUE TO SPREAD THE WORD TO EVERYONE, MAKING THEM UNCOMFORTABLE WITH THE TRUTH. THEY EVENTUALLY GET IT.
This movement is not about Repugnicans and Demorats. They are all tools of the CFR and Wall Street. We have been led to the slaughter, fleeced, fileted, fricaseed. Are you fed up yet? DO SOMETHING!!!
Yep, it is really hard to
Sun, 10/24/2010 - 13:10 — brunssd (not verified)Yep, it is really hard to take Reich seriously since, when was Sec o' Labor for Clinton and in a real position to do something to help (or at least advocate for workers), all we got was the old "education is the key" bullshit. "Everyone could be a computer programmer if they had the training" went the mantra, when in actuality you'd end up with garbage truck drivers, Walmart greeters and carpenters with degrees in Computer Science.
It seems it takes a Democrat to really cut the legs off of the working class e.g. NAFTA, ED welfare as we know it, repeal Glass Steagall.
Thanks Clinton, Thanks Reich
that'd be, "end welfare as
Sun, 10/24/2010 - 13:15 — brunssd (not verified)that'd be, "end welfare as we know it"