America Is Ruled by Billionaires, and They Are Coming After the Last Shreds of Our Democracy

America Is Ruled by Billionaires, and They Are Coming After the Last Shreds of Our Democracy

Post by Karolina Dean...Big Money weave a might » Mon, 08 Apr 2013 13:24:13

America Is Ruled by Billionaires, and They Are Coming After the Last
Shreds of Our Democracy
America is a plutocracy through and through -- what are we going to do
about it?

April 4, 2013  |
Plutocracy literally means rule by the rich. Rule can have various
shades of meaning: those who exercise the authority of public office
are wealthy; their wealth explains why they hold that office; they
exercise that authority in the interests of the rich; they have the
primary influence over who holds those offices and the actions they
take. These aspects of plutocracy are not exclusive. Government of
the rich and for the rich need not berun directly by the rich. Also,
in some exceptional circumstances rich individuals who hold powerful
positions may govern in the interests of the many, e.g. Franklin

The United States today qualifies as a plutocracy on a number of
grounds.  Lets look at some striking bits of evidence. Gross income
redistribution upwards in the hierarchy has been a feature of American
society for the past decades. The familiar statistics tell us that
nearly 80% of the national wealth generated since 1973 has gone to the
upper 2%, 65% to the upper 1 per cent. Estimates as to the rise in
real income for salaried workers over the past 40 years range from 20%
to 28 %. In that period, real GDP has risen by 110% it has more than

To put it somewhat differently, according to the Congressional Budget
Office,  the top earning 1 percent of households gained about 8X more
than those in the 60 percentile after federal taxes and income
transfers over a period between 1979 and 2007; 10X those in lower
percentiles.  In short, the overwhelming fraction of all the wealth
created over two generations has gone to those at the very top of the
income pyramid.  That pattern has been markedly accelerated since the
financial crisis hit in 2008. Between 2000 and 2012, the real net
worth of 90% of Americans has declined by 25%.  Theoretically, there
is the possibility that this change is due to structural economic
features operating nationally and internationally. That argument wont
wash, though, for three reasons. First, there is no reason to think
that such a process has accelerated over the past five years during
which disparities have widened at a faster rate. Second, other
countries (many even more enmeshed in the world economy) have seen
nothing like the drastic phenomenon occurring in the United States.
Third, the readiness of the countrys political class to ignore what
has been happening, and the absence of remedial action that could have
been taken, in themselves are clear indicators of who shapes thinking
and determines public policy. In addition, several significant
governmental actions have been taken that directly favor the moneyed

The latter include the dismantling of the apparatus to regulate
financial activities specifically and big business generally. Runaway
exploitation of the system by predatory banks was made possible by the
Clinton reforms of the 1990s and the lax application of those rules
that still prevailed. Attorney General Eric Holder just a few weeks
ago went so far as to admit that the Department of Justices decisions
on when to bring criminal charges against the biggest financial
institutions will depend not on the question of legal violations alone
but would include the hypothetical effects on economic stability of
their prosecution. Earlier, Holder had extended blanket immunity to
Bank of America and other mortgage lenders for their apparent
criminality in forging, robo-signing, foreclosure documents on
millions of home owners. In brief, equal protection and application of
the law has been suspended. That is plutocracy.

Moreover, the extreme of a regulatory culture that, in effect, turns
public officials into tame accessories to financial abuse emerged in
stark relief at the Levin Committee hearings on J P Morgan Chases
London Whale scandal. Morgan officials stated baldly that they chose
not to inform the Controller of the Currency about discrepancies in
trading accounts, without the slightest regard that they might be
breaking the law, in the conviction that it was Morgans privilege not
to do so. Senior regulators explained that they did not see it as
their job to monitor compliance or to check whether claims made by
their Morgan counterparts were correct. They also accepted abusive
treatment, e.g. being called stupid to their face by senior Morgan
executives. Thats plutocracy at work.  The Senate Finance Committee
hearing drew only 3 senators yet another sign of plutocracy at work.
When mega-banks make *** profits by money laundering for drug
cartels and get off with a slap on the wrist, as has HSBC and others,
that too is plutocracy.

When the system of law that is meant to order the workings of society
without reference to ascriptive persons is made malleable in the hands
of officials to serve the preferred interests of some, it ceases to be
a neutral instrument for the common good. In todays society, it is
becoming the instrument of a plutocracy.

There are myriad other examples of complicity between legislators or
regulators, on the one hand, and special business interests on the
other. EPA judgments that are reversed under the combined pressure of
the commercial interests affected and beholden politicians is one. The
governments decision not to seek the power to bargain with
pharmaceutical companies over the price of *** paid for with public
funds is another. Tolerance for the concealment of offshore profits in
the tens of billions is a third. Relaxed interpretations of the tax
laws by the IRS to the advantage of high income persons can be added
to the list. So, too, can the give-away to sole source contractors of
the tens of billions squandered in Iraq and Afghanistan. The number of
such direct assists to big business and the wealthy is endless. The
point is that government, at all levels, serves particular selfish
interests no matter who holds high positions. While there is some
difference between Republicans and Democrats on this score, it has
narrowed on most major items to the point that the fundamental
properties of the biased system are so entrenched as to be impervious
to elect***outcomes. The most revealing experience that we have of
that harsh reality is the Obama administrations strategic decision to
allow Wall Street to determine how and by whom the financial crisis
would be handled.

Systemic biases are the most crucial factor is creating and
maintaining plutocratic orientations of government. They are
confirmed, and reinforced, by the identities and identifications of
the persons who actually hold high elected office. Our leaders are
nearly all rich by any reasonable standard. Most are very rich. Those
who werent have aspired to become so and have succeeded. The Clintons
are the striking case in point. That aspiration is evinced in how they
conduct themselves in office. Congress, for its part, is composed of
two rich men/womens clubs. In many cases, personal wealth helped win
them their offices. In many others, they knit ties with lobbies that
provided the necessary funds.  Whether they are bought off in some
sense or other, they surely are often coopted. The most insidious
aspect of cooptation is to see the world from the vantage point of the
advantaged and special economic interests.

The devolution of the Democratic Party from being the representative
of ordinary people to being just another bunch of guys is a telling
commentary on how American politics has degenerated into a plutocracy.
The partys rolling over to accommodate the interests of the wealthy
has been a theme of the past four years. From the Obama White House to
the halls of Congress, party leaders (and most followers) have
conceded the *** of conservative ideas about macro-economic
strategy (the austerity dogma), about retaining largely untouched the
for-profit health care non-system, about bailing out the big
financial players as the expense of everyone else and the economys
stability, about degrading Social Security and Medicare. The last item
is the most egregious and revealing of our plutocratic ways and
means. For it entails a combination of intellectual deceit, blatant
massaging of the numbers, and disregard for the human consequences in
a time of growing distress for tens of millions. In other words, there
is no way to conceal or spin the trade-offs made, who was being hurt
and who would continue to enjoy the advantages of skewed fiscal

There is another, absolutely crucial dimension to the consolidation of
Americas plutocracy. It is controlling the means to shape how the
populace understands public matters and, thereby, to channel thought
and behavior in the desired direction. Our plutocratic guides,
prophets and trainers have been enormously successful in accomplishing
this. One object of their efforts has been to render the media into
either conscious allies or to denature them as critics or skeptics.
Their success is readily visible.

Who has challenged the plutocracy serving falsehood that Social
Security and Medicare are the main cause of our deficits whose
imminent bankruptcy puts in jeopardy the American economy? Who even
bothers to inform the public that those two programs trust funds draw
on a separate revenue source from the rest of the budget? Answer: no
one in or near the mainstream media. Who has performed the most
elementary service in pointing out that of all the jobs created since
2009, small as the number has been, 60% at least have been either part-
time or temporary? Answer: again, no one. Who has bothered to
highlight the logical flaws in the market fundamentalist view of the
world that has so deformed perceptions of what works and doesnt work
in macro-economic management? Yes, Paul Krugman, Joseph Stiglitz and a
handful of others although even Krugmans colleagues writing on
business and economics  at the NYT seem not to have the time to read
him or else lack the wit to comprehend what he is saying.

A second objective in a similar vein has been to dominate the think
tank/foundation world. Today, nearly every major Washington think tank
depends on corporate money. Businessmen sit on the boards and shape
research programs. Peter G. Peterson, the hedge fund billionaire, took
the more direct route of acquiring the International Institute of
Economics, renaming it after himself. He then set about using it as in
instrument to carry on the campaign against Social Security which has
become his lifes work. Then there is Robert Rubin. Rubin is the
distilled essence of financial malpractice, and the embodiment of the
government-Wall Street nexus that brought the country to wrack and
ruin.  Author of Clintons deregulation program while Secretary of the
Treasury: later super lobbyist and Chairman of CITI bank in the years
before it was pulled from the brink of bankruptcy by Ben Bernanke,
Paulson and Tim Geithner; and adviser to Barack Obama who stocked the
new administration with Rubin protgs.  He since has ensconced
himself as Chairman of the Council on Foreign Relations and Director
of the highly prestigious, lavishly funded Hamilton Project at
Brookings. By happenstance, both organizations late last year featured
presentations by Jaime Dimon. The one billed as a forum for a leading
global CEO to share priorities and insights before a high-level
audience of CFR  members.

That is plutocracy in action.

The third objective has been to weaken public education. We have
witnessed the *** on our public elementary school system in the
name of effectiveness, efficiency and innovation. Charter schools are
the watchword. Teachers are the heart of the problem. So
privatization, highly profitable privitization, is sold as the
solution to save Americas youth in the face of ample evidence to the
contrary. Cast aside is the historical truth that our public school
system is the one institution, above all others, that made American
democracy. It also is a bastion of enlightened social thinking. It
thereby qualifies as a target. The same for the countrys proud
network of public universities. From state to state, they are starved
for funding and made sacrificial lambs on the altar of the austerity
cult.  They, too, are stigmatized as behind the times, as no longer
doing the job of supplying the business world with the obedient,
practical skilled workers it wants. Business schools, long a
dependency of the corporate world, as held up as the model for private-
public partnership in higher education.  Distance learning, often
managed by for-profit expert consultants or entrepreneurs, is
advertised as the wave a bright future a future with fewer liberal-
leaning professors with fuzzy ideas about the good society. Distance
learning is the higher education companion to the charter school fad.
Lots of promises, little delivery but well conceived to advance a
plutocracy friendly agenda.

Here, too, boards of regents are led by business men or women.  The
abortive coup at the University of ***ia was instigated by the
Rector who is a real estate developer in ***ia Beach. The Chairman
of the Board of Regents at the University of Texas system where
tensions are at a combustible level is a real estate developer. The
Chairman at the University of California is CEO of two private equity
firms and the husband of Senator Diane Feinstein. His pet project
was to have the moneys of the California teachers pension fund placed
in the custody of private financial houses. Two former directors of
the fund currently are under criminal investigation for taking very
large kick-backs from other private equity firms to whom they directed
monies and which later employed them as placers. Thats plutocracy
at work.

The ultimate achievement of a plutocracy is to legitimize itself by
fixing in the minds of society the idea that money is the measure of
all things. It represents achievement, it is the sine qua non for
giving people the material things they want. It is the gauge of an
individuals worth. It is the mark of status in a status anxious
culture. That way of seeing the world describes the outlook of Bill
Clinton and Barack Obama.  It is Obama who, at the height of the
financial meltdown, lauded Jaime Dimon and Lloyd Blankfein  as savvy
and successful businessmen. It is Obama who eagerly became Dimons
golfing buddy an Obama who twice in his career took jobs with
corporate law firms. It was Bill Clinton who has been flying the world
in corporate jets for the past twelve years. It is the two of them who
promoted Alan Simpson and Erskine Bowles to press for the crippling of
Social Security. Thats plutocracy pervading the leadership ranks in
both parties of what used to be the American republic.

Perhaps the most extraordinary achievement of the plutocracys
financial wing has been to win acceptance from the countrys entire
political class that its largely speculative activities are normal.
Indeed, they are credited with being the economys principal engine of
growth. It follows that their well-being is crucial to the well-being
of the national economy and, therefore, they should be given
privileged treatment.


The American version of plutocracy is noteworthy for its crassness.
Subtlety, discretion and restraint are foreign to it. It has a
buccaneering quality. That style has roots in the countrys history
and culture. Much of the behavior is impulsive, grasping.  Individuals
are greedy for vivid displays that they are top dog, of what they can
get away with, as well as the riches themselves. There is little
interest in building anything that might endure no new order, no
new party, no new institutions. Not even physical monuments to
themselves. Why bother when the existing set-up works so well to your
advantage, to that of your like-minded and like-interested associates
when you can turn ideas, policies and money in your direction with
ease. And while the public is blind to how they are being deluded and
abused. After all, the more things appear to stay the same, the more
they can change in a country whose civic ideology imbues everyone with
the firm belief that its principles and institutions embody a unique
virtue. To challenge any of that would be to run the risk of raising
consciousness which is the last thing that the plutocrats want.

There are exceptions. The most stunning is Wall Streets biggest
players audacity in coopting a part of the NYC Police Department in
setting up a semi-autonomous unit to monitor the financial district.
Funded by Goldman Sachs et al, managed by private ban employees in key
administrative positions, and with an explicit mandate to prevent, as
well as to deal with any activity that threatens them, it operates
with the latest high tech equipment out of a dedicated facility
provided by its sponsors. The facility for years was kept under the
counter so as not to tempt inquisitive parties to expose it. This is
the unit that coordinated the squelching of theOccupy movements
Manhattan demonstrations. It represents the appropriation of a public
agency to serve and to serve under private interests. The post-9/11
hyper-anxiety provided political and ideological cover for a deal
devised by Mayor Mike Bloomberg (himself a Wall Street billionaire who
has gone down the line to defend it against all charges of financial
abuse) in collusion with his former associates.  Is this simply
Bloomberg registering NYCs fiscal dependency on financial sector
jobs? Well, this is the same Bloomberg who killed a widely supported
initiative to set a minimum decent wage of $10 an hour with health
insurance ($11.50 without) on development projects that receive more
than $1 million in taxpayer subsidies. He stigmatized the measure as
a throwback to the era when government viewed the private sector as a
cash cow to be milked. The last time we really had a big managed
economy was the USSR and that didnt work out so well.  Thats as
plutocratic as it gets and in liberal New York.

Furthermore, the moving forces of the plutocracy are not very
organized. There is no *** as such. It is the convergence of
outlook among disparate persons in different parts of the system that
has accomplished the revolution in American public life, public
discourse, and public philosophy. Nobody had to indoctrinate Barack
Obama in 2008-2009 or intimidate him or bribe him. He came to the
plutocrats on his own volition with his mind-set and values already in
conformity with the plutocracys view of itself and of America. This
is the man who, for the first two years of his presidency, repeatedly
misstated the coverage of the Social Security Act of 1935 ignorant
and not bothering to find out or willfully ignorant so as to create a
convenient comparison with his fatally flawed health care pseudo-plan.
This was the man, after all, who cited Ronald Reagan as model for what
sort of presidency American needed. He has been living proof of how
effectively Americans had been brought into line with the plutocratic

This is not to say that the plutocrats success was inevitable or
that they were diabolically clever in manipulating everything and
everyone to their advantage. There has been a strong element of good
fortune in their victory. Their most notable piece of luck has been
the ineptitude and shortsightedness of their potential opposition
liberal Democrats, intellectuals, and their like.  The plutocrats
pursued their goals is a disorganized, diffuse way. However, the
absence of an opponent on the contested terrain assured success.

As to cleverness, the American plutocracy is actually a stupid
plutocracy. First, it is overreaching. Far better to leave a few
goodies on the table for the 99% and even a few crumbs for the 47%
than to risk generating resentment and retaliation. Since the
financial meltdown, financial and business interests have been unable
to resist picking the pockets of the weak. Fishing out the small
change in the wake of grand larceny is rubbing salt into wounds.  Why
fight a small rise in the minimum wage? Why ruthlessly exploit all
those temps and part-timers who have so little in the way of economic
power anyway? Why squeeze every last buck from the small depositors
and credit card holders whom you already systematically fleece? In the
broad perspective, that sort of behavior is stupid.

To explain it, we must look to the status compulsions of Americas
audacious corporate freebooters. These peculiar traits grow more
intense the higher one goes in the hierarchy of riches. One is the
impulse to show to everybody your superiority by displaying what you
can get away with. Sharp dealing always has been prized by segments
of American society. Its the striving, insecure man who has to prove
to the world and to himself that he can act with impunity. He is
little different from the hoodlum showing off to his pals and to his
moll. These people at heart are hustlers they crave the thrill of
pulling off a scam, not constructing something.

Hence, Lloyd Blankfein not showing up for White House meetings yet
having Obama thank him for letting the president know, albeit after
the meeting already had begun, that Blankfein cant make it. Hence,
Jaime Dimon indignantly protesting his verbal mistreatment by the
press, by the White House, by whomever. Then there is Jack Welch, the
titan of American industry who struts sitting down, who holds the
Guinness record for the most manufacturing jobs outsourced by one
company and yet impudently calls Barack Obama anti-business after
the president appoints his hand-picked successor, Jeffrey Immelt, to
head the White Houses Job Council. Or Bank of Americas faking
compliance with the sweetheart deal it got from Obama on the felonious
foreclosure scam.

The ultimate episode of egregious lawlessness is the MF Holdings
affair whereby under its chief, former Senator and Governor Jon
Corzine, this hedge fund took the illegal action of looting a few
billion from custodial accounts to cover losses incurred in its
proprietary trading. JP Morgan, which held MF Global funds in several
accounts and also processed the firms securities trades, resisted
transferring the funds to MFs customers until forced to by legal
action. Punitive action: none. Why? The Justice Department and
regulatory bodies came up with the lame excuse that the MF groups
decision-making was so opaque that they could not determine whose
finger clicked the mouse. To pull capers like these and get off scot
free, without chasti***t, is the ultimate ego trip.

Willie Sutton, the notorious bank robber of the 1940s, explained his
targeting banks this way: thats where the money is. Todays
financial swindlers go after the high risk gambles because thats
where the biggest kicks are. That is more important than the biggest
bucks although they add to the thrill. For the ever status striving,
identity insecure financial baron is a compulsive gambler. He needs
his fixes. Of winning, of celebrity, of respect. Of deference. All are
transitory, though. For American culture provides few insignia of
rank. No Sirs, no seats in the House of Lords, no rites of passage
that separate the heralded elite from all the rest. Oblivion shadows
the most famous and acclaimed.

Thus, the grasping for whatever badges of regard are within reach
however ludicrous they might be.   When IR Magazine awarded JPMorgan
the prize for best crisis management of 2012 for its handling of the
London Whale trading debacle, at a black-tie awards ceremony in
Manhattan, Morgan executives were there to express their appreciation,
rather than bow out gracefully. The only Wall Street personage who has
played the celebrity game without being marginalized in the public
mind is Robert Rubin. Through nimbleness and political connection he
has semi-institutionalized his celebrity status. Yes, there is Paul
Volcker but that is another world all together. His stature is built
on an unmatched record of service to the commonweal and unchallenged
integrity. The Blankfeins and Dimons and Welchs not only lack the
critical attributes they also lack the sense of what it means to
serve the public from which they habitually distance themselves.

The plutocrats compulsive denigration of the poor, the ill and the
dispossessed is perhaps the most telling evidence of status obsession
linked to insecurity that is at the core of their social personality.
They find it necessary to stigmatize the latter as at best failures,
at worst as m***degenerates drug ***s, lazy, parasites, in part
to highlight their superiority and in part to blur the human
consequences of their rapacity.  Behavior of this kind is the
antithesis of what could be the cultivated image of the statesman of
commerce even though they pay a price in public esteem. They also
pay in price in terms of the other aspect of their own self-image.

Second, Americans have a craving to believe in their own virtue as
well as to have others recognize it.  The perverse pride in beating
the system cannot in and of itself compensate for the feeling that
youre a bad guy. Blankfein again: I have been doing the Lords
work. No one laughs in public so Im right about that. Dimon
swaggering through the Council On Foreign Relations or Brookings with
the huddled masses in his audience   and on the dais   beaming
their adulation as they bask in his fame and thirst for his wisdom on
the great affairs of the world. Perhaps, his views on whether the
BRICS can rig the LIBOR rate with the connivance of the Bank of
England and the Federal Reserve or ignore regulatory reporting rules
when they threaten to reveal a madcap scheme that loses $6 billion?


Plutocracy in the current American style is having pernicious effects
that go beyond the *** influence of the rich on the nations
economy and government. It is setting precedents and modeling the
unaccountability and irresponsibility that is pervading executive
power throughout the society. Two successive presidential
administrations and two decades of rogue behavior by corporate elites
have set norms now evident in institutions as diverse as universities
and think tanks, the military and professional associations. The
cumulative result is a widespread degrading of standards in the uses
and abuses of power.

Plutocracy also raises social tensions in society. Logically, the main
line of tension should be between the plutocrats and the rest or, at
least, between them and all those with modest means. But that is not
the case in the United States. While it is true that there were bitter
words about the Wall Street moguls and their bailouts during the first
year or so after the financial collapse, it never became the main line
of political division. Today, outrage has abated and politics is all
about austerity and debts rather than the distribution of wealth and
the power that goes along with it.The deep-seated sense of anxiety and
grievance that pervades the populace manifests in outbreaks of hostile
competition among groups who are in fact themselves all victims of the
plutocrats success in grabbing for themselves most of the countrys
wealth thereby leaving the rest of us to fight for the leftovers.
So, it is private sector employees pitted against government employees
because the latter have (some) health insurance, some pension and some
security relative to the former who have been shorn of all three. Its
parents worried about their kids education against teachers. Both
against cash strapped local authorities. Municipalities vs states.
Its the small businessman against unions and health insurance
requirements. Its doctors against patients against administrators.
Its university administrators against faculty and against students,
faculty against students in competing for a much reduced
appropriations. Its all of those against boards of regents and state

Its everyone frustrated by the ever sharpening contrast between hopes
and aspirations and darkening realities of what they might expect for
themselves and their children. Meanwhile, the folks at the top wait
confidently and expectantly above the fray they have engineered ever
ready to swoop down to strip the remains of combat by way of
privatized public assets, no-bid contracts, tax and regulatory havens,
commercially owned toll roads, student loan monopolies, rapacious
buying up of foreclosed properties with federal incentives, and myriad
tax breaks.

President Obama used his State of the Union Address to send the
message loud and clear. Let me put colleges and universities on
notice he warned, If you cant stop tuition from going up, the
funding you get from taxpayers will go down. He thereby set forth a
line of reasoning that put him on the same wavelength as Rick Perry.
For the reality is the exact opposite. It is because funding has gone
down by 2/3 over the past few decades that colleges and universities
are obliged to raise tuition despite flat-lining faculty and staff
salaries.   This is the essence of intellectual conditioning to the
plutocracys self-serving dogma and the suborning of public
authorities by the plutocracy. Beyond capture, it is assimilation.

Does this sort of perverse pride go before the fall? No sign of that
happening yet. Plutocracy in America is more likely to be our destiny.
The growing dynastic factor operating within the financial plutocracy
militates in that direction. Wealth itself has always been transferred
from one generation to another, of course; reduced inheritance taxes
along with lower rates at upper income brackets generally accentuate
that tendency. With socio-economic mobility in American society
slipping, it gains further momentum. Something approaching a caste
identity is forming among the financial elites as personified by
Jaime Dimon who is the third generation of Wall Street stockbrokers/
financial managers in his family his father an Executive Director at
American Express where the young Dimon joined forces with Sandy
Weill.  As a revealing coda to this generational tale, Dimon, last
year, hired his 81 year old father to work for JP Morgan Chase. His
fathers first-year salary was $447,000;  slated to rise to $1.6
million now that he has some work experience under his belt,
presumably.  A sense of limits is not part of the financial
plutocracys persona.


All that has been recounted here is on the public record. Facts are
facts; the inferred attitudes of the plutocracy are confirmed by an
abundance of data including the players own statements. The
consequences analyzed are also a matter of public record. The tepid
reaction should be no surprise; that is exactly what is to be expected
in a plutocracy.

So what is to be done? Rectify the sins of commission by rescinding
them and those of omission by restoring responsible, enlightened
policies. A model? How about 1974? Inglorious year, but.Richard Nixon
was well to the Left of Barack Obama civil liberties included;
corporate power, especially that of big finance, was kept in check by
effective regulation; and the integrity of American institutions was a
paramount concern of most elected officials and the political elite in

The Word awaitsbut

The script is small

The preacher is blind

The audience is deaf

And the echoes ricochet off bare walls soundlessly