Sunday, June 13, 2010

Power Stays with the Powerful or Our Unethical Economy

There is total and complete truth behind the thought that the rich are getting richer. More than that though, those in power seem to stay that way. In fact we now seem to have in America a powerful elite. There is an aristocratic class of people who run our government and corporations. We are in the midst of an American plutocracy and well on our way to a new brand of feudalism.

I know what you are thinking, that this is crazy talk. Is it though? Just look at the piece on FindLaw by Scott Gerber and Kevin Hawley entitled Elena Kagan and the Return to Feudalism. From the story –
Feudalism, as readers may know, is a medieval concept in which the social order is based on status and rank. People are not free and equal. Rather, they are embedded members of hereditary groups. In feudalism's idealized form, the Norman system introduced in England in 1066 by William the Conqueror, people were born and lived their lives within a specific class—as lords, vassals, peasants, or serfs—and the principal purpose of law was to preserve this hierarchical social order.

America was founded as a rejection of feudalism. In 1776, the political theory of John Locke—feudalism's most powerful critic—was articulated by Thomas Jefferson in the Declaration of Independence as "an expression of the American mind." And James Madison wrote that same theory into the U.S. Constitution in 1787, prohibiting the state from conferring advantages, or imposing disadvantages, on the basis of a person's class, hereditary status, or personal connections.

President Obama apparently remembers none of this. His nomination statement about Kagan was little more than a laundry list of her elite status: former law clerk to a Supreme Court justice, former professor at the University of Chicago Law School, former dean of Harvard Law School, and current solicitor general of the United States. The president said nothing about what contributions Kagan had made to the law.

Revealingly, when skeptics deigned to raise questions about Kagan's actual accomplishments, her social equals rallied to her defense, largely on the basis of her status as a Harvard-educated lawyer. For example, Professor Mark Tushnet, a colleague of Kagan's at Harvard Law School, posted a sympathetic assessment of the one article Kagan published at Harvard to get tenure there. Equally problematic, another former Harvard colleague, Christopher Edley—now the dean of UC Berkeley School of Law—published an op-ed in the Washington Post in which he defended Kagan's nomination because, if she's confirmed (a virtual certainty), the Court will then be comprised of Harvard and Yale law school graduates only.

Departing Justice John Paul Stevens, whom Kagan would replace, graduated from Northwestern, which Edley would regard as a "good" law school, not a "great" one. Never mind that even Stevens's conservative critics can't help but acknowledge his powerful intellect and impressive reasoning while on the Court: what matters to Edley is the law school Stevens attended in his 20's.

The elitism that Edley thinks is so wonderful—and that Tushnet works so hard to disguise—is a clear sign that the American legal profession is now feudalistic. There are no objective measures of talent in the law anymore, at least none that are used. Instead, elites rely on someone's resume (Edley), or provide a spirited defense of a colleague (Tushnet), as a substitute. A degree from Harvard or Yale marks someone as more qualified than someone else. Always. No exceptions. Who cares what the person actually accomplished.


The cost of such relentless elitism is self-evident. Take Thurgood Marshall, for example—the justice for whom Kagan clerked. He went to Howard, not Harvard. But President Johnson actually cared about Marshall's record—Marshall, who argued and won Brown v. Board of Education, was one of the most accomplished civil rights lawyers in the history of American law—not merely his resume. President Obama, Dean Edley, Professor Tushnet, and their Cambridge-class might believe that the United States is doomed unless the American people acknowledge their station and allow their social betters to rule, unquestioned. But history suggests they are wrong.

Now on to a story and a book excerpt found by our good friend Jimmie at First up, Jimmie linked to the piece Greed and corporate power created American plutocracy by Robert Zaller. I’m actually breaking my normal rule of not reposting someone else’s work in their entirety because this is just too good and important not to post completely. Emphasis is mine.

Kevin Phillips' new book, "Bad Money," details what he calls the "financialization" of the American economy in the past generation, by which lending instruments, whose purpose is - or ought to be - to facilitate productive investment, became themselves the principal source of investment and profit in the economy.

Phillips can claim a considerable share of the credit for the disasters he now deplores. He was one of the chief ideologues of the Nixon and Reagan revolutions that systematically denuded the middle class, destroyed regulatory oversight of the economy and, manipulating the civil disorder and racial anxieties of the 1960s, persuaded the American working class to buy into social reaction, corporate tax exemption and the creation of a new "gilded age" of plutocracy, speculative frenzy and licensed criminality. It is good that Phillips now repents his former sins, and paints the devil in his true colors. But he has a lot to answer for.

Forty years ago, when the country elected Richard Nixon its president, the United States was already a declining power. If a society be judged, as Aristotle suggested long ago, on the size and strength of its middle class - that is, its relative egalitarianism - then the United States was headed full steam in the wrong direction.

The plutocratic revolution of the past 40 years, if we may give it its proper name, has stripped the gears of what was once the most powerful and in some ways the most hopeful society on earth. The size and so-called "productivity" of the American economy has grown, a natural consequence of population increase, technological change and the increased efficiency of worker exploitation (more hours worked at declining rates of compensation), but its nature has become more markedly predatory, as a narrower and narrower elite claims a greater and greater share of its wealth and the political power that goes with it.

A single statistic may serve to indicate how uphill the battle against corporate power was through much of the 20th century. In 1980, when Ronald Reagan was elected president, the relative income distribution in the United States was approximately the same as it had been in 1910, when champagne still flowed in the bathtubs of our first Gilded Age. In between, the 16th Amendment had created a progressive income tax, which reached a nominal rate of 91 percent on the super-rich during World War II and 50 percent on corporate earnings in the Eisenhower '50s. Social Security had underwritten the retirement and disability income of working Americans, employer-based health care had been written into the social contract, and Lyndon Johnson's "War on Poverty" had reduced the official poverty level in half, from 22 percent to 11 percent. In other words, the collective result of seventy years of progressive social policy, federal trust-busting and union activism had been to keep America exactly as inegalitarian as it had been when J. P. Morgan and John Rockefeller still ruled the land.

What would America have looked like in 1980 had there been no resistance to corporate aggrandizement? One only has to look at America in 2008. Blue- and white-collar jobs have vanished overseas, while private sector unionization stands at barely 7 percent of the workforce. The average American has a lower standard of living while working longer hours than 30 years ago; less health care at higher cost; less pension security.

The lifetime job at the plant or the office has disappeared, except for civil service bureaucrats or the vanishing breed of tenured academics your present author belongs to. The learned professions - law, medicine and teaching - have lost their autonomy, and much of their self-respect, as corporate imperatives have tightened the noose around them.

Meanwhile, the Food and Drug Administration no longer guarantees the safety of the food and drug supply, but openly abets big agriculture and big pharmaceutical companies. The Environmental Protection Agency no longer protects our air, water and wildlife, but turns a blind eye to polluters and extends a helping hand to developers. The Securities and Exchange Commission no longer polices our capital markets but blesses merger, monopoly and speculation. And, all the while, the appallingly rich become unspeakably richer: 550 percent richer in inflation-adjusted gross income alone since 1970.

Americans once prided themselves on being a can-do people, a nation of inventors, mechanics, tinkerers, fixers. Now we are defined by what we can't do, even though most other mature Western economies have found solutions to the problems we find intractable. We can't control violence because we have a gun culture. We can't have cost-effective, energy-efficient transit because we have a car culture. We can't have a rational, single-payer health care system because that would be socialist.

We didn't find ourselves in a daze by accident. For every unsolveable problem we face, there's an interest or an industry that prospers by keeping things the way they are. Our economy has enshrined a gospel of greed. Our society has become fearful and embittered. Our politics are ritualistic and symbolic, a mechanism for feeding antagonism and manipulating discontent, and accustoming us to worse and worse.

Democracies die, like every other kind of animal. It's not too late to rescue ours, but time is wasting, and our bad habits are increasingly set.
Next is the post 85% of Americans only have control of 15% of the wealth...the view from the bottom of the economic jungle that quotes from Jared Paul Stern’s book The Classicist: The History of America's Upper Class. From the post –
In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).


Of course, you first have to accept Foulkes' premise that America does in fact have a class system, even if the current recession has painfully demonstrated that no one should take their positions for granted while Barack Obama's ascendancy proved that traditional barriers are no longer as formidable. "I am often told that 'American high society' is an oxymoron, either by those who hold the quaint belief that the United States is a classless society in which opportunity is open to all," Foulkes notes, "or by Europeans who believe themselves to be superior and look down pejoratively upon the social aspirations of a country that is younger than many families, social clubs, educational establishments, and even socks in the Old World."

The fact of the matter, however, Foulkes writes, is that "The United States is no longer a young country; it is a middle-aged nation with its own social codes and structures locked into its collective DNA. It has its prominent families, an untitled aristocracy, who exerted such a profound effect on the nation or have just been around for so long that the doings of their descendants are still a source of interest." The second pillar of American society is the plutocracy, "Men who made so much money that they simply floated to the pinnacle of the social structure on a tide of cash, building huge mansions and amassing art collections that remain among the most impressive the world has ever seen."
So that is where we are. We live in a society in which the powerful keep and horde their power, while people on both the Left and the Right defend this American elitism to the detriment of the American people. Our economy and society is headed in an unsustainable and unethical direction and I honestly don’t know if there is anything that we can do to stop it.

Look at the choices we have in our leaders and their parties. Both the Republican and Democratic parties are completely in bed with and indebted to the American plutocracy. Sure there are individuals within each that are against this blasphemy, but they are drowned out by the cacophony of those who desire nothing more than keeping their power and the status quo. We’ve been sold bills of “change” from both the Right and the Left, yet nothing has really changed. The power in this country has not been given back to the people and I fear that it never will. The Republicans have sold out to the corporations and the Democrats have sold out to the unions and none of the give two shits about any of us. Any more, the only economic theory that makes any sense is that of distributism, which I have to admit is ironic that I am drawn to an economic theory started by Catholics that was said to “seeks to subordinate economic activity to human life as a whole, to our spiritual life, our intellectual life, our family life.”

I only hope and pray that we find the strength to weather this storm and come out as the America as envisioned in the Declaration of Independence and the Constitution and not some feudalistic state. But then again, we might already be there.


Man of the West said...

Our economy and society is headed in an unsustainable and unethical direction and I honestly don’t know if there is anything that we can do to stop it.

Sure there is, Dave. Even now, though I really don't know for how much longer, the American voter holds an enormous amount of power, enough to completely change the direction of government every two years. That they don't...well...

Let me ask you: do you think that if most people had read the Constitution and The Federalist Papers--they were published as newspaper articles, after all--that they would be so easily hoodwinked? If they had all read Hamilton's Report on Manufactures, would they have voted for people who gutted what had been proven, over decades, to be a generally very successful policy?

Of course they wouldn't. All the American people have to do is take the time to educate themselves. God knows the government isn't going to educate them. They have to educate themselves. Of course, most of them won't trouble themselves. They don't want to take the time or make the effort to do the reading.

Look at the stats in the quotes in this book review and tell me that the source of the problem doesn't lie in an American electorate that, by and large, doesn't give two squats about much of anything as long as they've got cable tv, beer, and groceries. If you're looking for a villain in this story, there it is: what has been done to the American people could not have been done without their compliance and apathy.

Dave said...

I think that it is a 60/40 situation. Putting all of the blame on the public is just far too easy and convenient and lets those in power off the hook. 40% of the problem comes from the public and the fact that they just don’t care. 60% come from those in power and with the money. They will do anything to keep it. There is a reason why the Romans came up with the term “bread and circus.”

Otter Limits said...

I agree. I think blaming the public for the political state of affairs in this country is like blaming the homeowner for being robbed because he can't afford to install a home securty system.

I mean, sure, in general, the electorate is un-informed and un-educated but when, in most cases, we have 2 crooks to choose from....what is the alternative? Not voting at all?

The only thing I think we can truly blame the electorate for is re-electing elitist power-grabbing party playing incumbents. Otherwise, the hacks in office are to blame.

Man of the West said...

All I'm sayin', gents, is that when your electorate basically doesn't give two hoots until the manure hits the fan, you will inevitably wind up with the crooks and the ideologues in power, and if your electorate does exert the effort to educate themselves, there will be relatively few crooks and ideologues in power. If you've got crooks and ideologues running things, it's a symptom, kind of like a fever. Sure, you hate the fever, it can kill you, but it's not the underlying problem.

In the end, a nation pretty much winds up with the government it deserves.