Nel's New Day

April 23, 2014

U.S. Becomes Oligarchy

It’s official! Instead of a democracy, the United States is now an oligarchy, meaning profoundly corrupt, according to a study to appear this fall in the Perspectives on Politics:

“Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But [the country has] “the nearly total failure of ‘median voter’ and other Majoritarian Electoral Democracy theories [of America]. When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”

Authors Martin Gilens and Benjamin I. Page of “Testing Theories of American Politics” point out that the available data probably under-represents the super-rich control of the United States. This first-ever scientific study of whether the nation is a democracy tests the theoretical predications study in an examination of 1,779 policy issues. The study’s findings show that the United States now follows the pattern of Russia and other countries that claim to be “electoral” “democratic” countries.

The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” The following shows a few of these ignored preferences in which the GOP House members ignore the will of the public:

  • 62% oppose the subsidies that the federal government gives to oil, gas and coal companies.
  • 67% believe there is solid evidence of climate change. [In the House, 56 percent of Republicans deny basic science behind climate change.]
  • 65% favor setting stricter emission limits on power plants in order to address climate change.
  • 80% believe that unauthorized immigrants who have been in the country for years and are employed, speak English, and would pay back taxes should be allowed to become citizens.
  • 33% support delaying, defunding, or repealing the Affordable Care Act. [This was almost a year ago as the House was in the midst of its 50 attempts to do this.]
  • 27% want Congress to drop long-term unemployment benefits. [Thus far, the House has followed the 27 percent.)
  • 73% want the minimum wage raised to $10.10.
  • 79% want background checks for all guns that are purchased.
  • 75% believe all politicians are “corrupted” by campaign donations and lobbyists.
  • 70% believe politicians use their political power to help their friends and hurt their enemies.

Although President Obama just signed a pet bill from House Majority Leader Eric Cantor (R-VA) that all the Democrats opposed, Cantor later accused the president of refusing to work with him. The new law provides $126 million for pediatric disease research named after one of Cantor’s constituents who died of a brain tumor.  Cantor’s complaint may have been about the Democrat’s refusal to pass their weak immigration reform bill that was tied to repealing the Affordable Care Act.  The Koch brothers, whose net worth just passed $100 billion, is an excellent example of the corruption in the falsehoods in their ads against the Affordable Care Act.

  • A leukemia patient said her policy was cancelled and she would die without medication.
  • A woman said her policy went up $700 a month because of Obamacare.
  • Residents in Louisiana open letters from health care companies telling about the evils of Obamacare.

An ad for a Stainmaster carpet, one of the Kochs’ many products, would require the ad to “conspicuously disclose that the persons in such advertisements are not actual consumers,” according to Hill columnist Mark Mellman. There were no cancellations that caused these problems, no letters sent out, and no residents—just paid actors. At this time, only 15 states require that political campaign ads cannot be false. A  Supreme Court case heard yesterday may allow all political ads to lie as much as they want. The government is arguing that lying in campaign ads is an important part of free speech on April 22 in the case Susan B. Anthony List v. Driehaus.

The protection of armed self-identified military members that kept rancher Cliven Bundy from obeying federal law and cheat the government out of money is another example of oligarchy. Wealthy right-wing billionaires manipulated Tea Part members and right-wing media fought for Bundy’s rights not to pay his 20-year debts. A millionaire gets to declare that the United States doesn’t exist so that he can keep fattening his cattle on land that taxpayers own and then sell them at a profit that he keeps for himself.

The Koch brothers will reap any wins from Bundy because they have vast investments in mineral and cattle industries. They just send out Americans for Prosperity to make themselves more prosperous, driving the country farther in oligarchy-land.

The United States of Oligarchy gave $1.2 trillion to the top Fortune 100 companies between 2000 and 2012. That amount doesn’t include the billions of dollars that housing, auto, and banking enterprises made in 2008 and 2009 nor does it include subsidies for ethanol. Open the Books found that the government military contracts with private firms brought billions of dollars, for example Lockheed Martin ($392 billion), General Dynamics ($170 billion), and United Technologies ($73 billion). Another $21.8 billion in direct subsidies went to corporate recipients, and giant oil companies got another $8.5 billion.

The recent Supreme Court ruling of McCutcheon v. FEC, giving the wealthy almost unlimited opportunities to buy lawmakers, ignored the rapidly increasing inequality in wealth. Since the 1960s, the richest 0.1 percent of U.S. households, each averaging over $20 million, have more than doubled their share of U.S. wealth from 10 to 20 percent. That 0.1 percent equals about 316,000 people. They get rich because the only way to add wealth is saving and investing. Wealthy people can do this so their net worth compounds while the rest of the people have to spend their income to provide food and shelter.

trickle down

Despite the vast wealth that these people have, they’re incensed by criticism. The top one percent got 95 percent of the nation’s income growth from 2009 to 2012, their income grew by 31 percent while the 99 percent got 0.4 percent, and they’re upset because some of the media points this out. They still pay taxes at a lower rate than the middle-class, and they accuse people of being jealous, comparing the populist threats to Hitler’s statements in Germany.

When Rep. Dave Camp (R-MI) suggested that the ten biggest Too Big to Fail Banks pay a tax as partial payment to taxpayers who bailed them out to give the wealthy more money, GOP leaders Mitch McConnell and John Boehner quashed any possibility of this even getting a vote. Goldman Sachs cancelled meetings with the RNC about fundraisers, and the bank lobby demanded that GOP renounce this heresy. Fifty-four GOP House members sent a letter to Camp about their deep concerns that the proposal would reduce access to credit and slow growth. Camp retired.

In a letter to the Wall Street Journal, billionaire Tom Perkins compared the reaction of the “anti-rich radicals” toward the super-rich to Kristallnacht, Hitler’s pre-Holocaust attack on the Jews. He suggested that the number of votes from people should be equivalent to the amount of taxes that they pay. He refuses to belief that this situation already exists, thanks to the Supreme Court.

Even an economist from JP Morgan doesn’t believe the bunk of “trickle-down” economics that supports the myth that giving the wealthy all the money will create wealth for the poor and middle classes. Michael Feroli broke this balloon when he stated that consumer spending is lagging by $1 trillion historically anticipated.


Since the end of the recession, households spend only 1.7 cents of each extra dollar earned as compared to 3.8 cents between 1952 to 2009. There does seem to be a limit to what the wealthy can buy, and the rest of the people don’t have the money to spend. Harvard Business Review blogger Andrew O’Connell wrote that the top 5 percent of U.S. earners increased spending by 17 percent compared to a one-percent increase for everyone else.

Another study published in the Political Research Quarterly found that only the rich are represented in the U.S. senate. A review of the voting records of senators in five Congresses found them consistently aligned with their wealthiest constituents. Lower-class constituents didn’t influence the Senators’ voting behavior.

This is only part of the picture. More later.


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