The 2013 Federal Reserve Board Survey of Consumer Finance was released last week, though you would not have noticed it if you relied on the New York Times. Its story appeared on page 2 of the Business Section because the welfare of consumers/workers is nothing compared to a story about a new investment in some media project or the one about grading teachers the way you grade servers at sit-down franchise restaurants. The top line result is that the rich are doing great, and the rest of us aren’t. The bottom quintile saw a huge drop in wealth and income, and the 1% exploded upward in both.
Well, actually, the report doesn’t give us figures for the top 1%, we get the chart on wealth above, showing results for the top 3%. Perhaps the Fed didn’t want to feed the public’s volcanic anger about the 1%. Anyway, you can see that the top 3% show a steady growth in wealth share over the last 25 years, and everyone else lost wealth share. The same thing is true of income share, as this chart shows.
This report is a simple presentation of the state of the union: we are nation-state run for the sole benefit of the rich. Joseph Stiglitz reinforces this idea in an essay for Project Syndicate: The shift in wealth and income does not represent an increase in productive capital or in production. It is simply the outcome of changes in the way markets work that only benefit the richest, changes that are brought about by oligarchic control of the mechanisms of the markets themselves.
Moreover, if banks succeed in using their political influence to socialize losses and retain more and more of their ill-gotten gains, the measured wealth in the financial sector increases. We do not measure the corresponding diminution of taxpayers’ wealth. Likewise, if corporations convince the government to overpay for their products (as the major drug companies have succeeded in doing), or are given access to public resources at below-market prices (as mining companies have succeeded in doing), reported financial wealth increases, though the wealth of ordinary citizens does not.
This isn’t capitalism, says Stiglitz, it’s “ersatz capitalism”, where the political system designs rules creating and sustaining distorted markets in which the richest and their corporations exploit the rest of us. It’s also not democracy, it’s “ersatz democracy”, where the entrenched political elites of both parties do the will of the filthy rich at the expense of the rest of us. This Vox explainer has the details on the crushing of democracy.
Don’t even think you can fix things through legislation. The Supreme Court will figure out a way to call it unconstitutional, or will construe it out of existence, as Erwin Chermerinsky demonstrates over and over in his book The Case Against the Supreme Court, which will come up on our Book Salon on September 28. Just look at the courts pecking away at Obamacare, or my personal favorite, Anthony Kennedy’s decision that the only kind of corruption you can prevent is quid pro quo corruption, not the everyday corruption documented by Zephyr Teachout (yes, the woman challenging the entrenched Andrew Cuomo in the New York primary this Tuesday: vote for her) in her new book Corruption in America. Reviewer David Cole explains:
In the framers’ view, corruption in the broader sense of using public office for private ends was essentially the opposite of public virtue, and was therefore a central threat to the life and health of the republic. A republican form of government required that men act as citizens, concerned for the public good, and not merely as private, self-interested individuals.
The Supreme Court is a wonderful institution for the protection of the property interests of the richest, and a marvelous tool for crushing the will of the people.
So, you can’t protect yourself with legislation. You spend your one life working but you don’t share in the growth; the only reason for working is you have to eat. You pay your taxes, but the filthy rich and their corporations don’t. State and local governments are unable to raise taxes because the rich won’t pay and have persuaded everyone else not to pay. Your infrastructure sucks (seen any potholes lately, any water mains bursting, aquifers drying up?), not least because the filthy rich and their corporations make heavy use of it and refuse to pay their share. The dominant ideology of neoliberalism infects both parties and a large segment of the population. The police are heavily armed and they want to kick your ass for protesting. The rich are heavily invested in making the system worse, whether it’s ALEC or the Art Pope or any of a number of other creepy wingnuts.
In the face of all this, the Moral Monday crowds led by the Reverend Barber, the Gaza protesters, the Ferguson protesters, the Keystone Pipeline protesters, the Strike for 15 protesters, and Zephyr Teachout are a sunlit sky.