Thursday, August 18, 2011

Duopoly and Wealth: The Ties that Bind

Our Plutocratic Duopoly. As previously stated, our country is governed by a political duopoly (the Republicans and the Democrats), who freeze out any viable attempts at representation by any other party. This duopoly is in turn controlled by the plutocrats (the wealthy). What has happened over the years is that our so-called representatives have been increasingly generous to the wealthy, and the wealthy have responded in kind with generous financial support. As a result, the politicians have doled out more favors for the rich, and the rich continue to reciprocate in kind.

Democracy On the Auction Block.  Almost a nine years ago, this problem was recognized and brought to the attention of the American people by Senator Paul Wellstone.  Here is what he had to say on the Phil Donahue Show! in December of 1992:

"We've got government to the highest bidder. We've got auction block democracy. It's not true that each voter counts for one and only one; that's the way it's supposed to be in a democracy. Money determines who gets to run for office, how people run for office, it determines what people do while in office and the fact of the matter is the vast majority of people are cut out of the loop."

The Rich Get Richer …
 And the poor get poorer.  While the wages of the working class have stagnated or even dropped over the years, the incomes of the plutocrats have increased in drastic proportions.  According to one source (How Rich Are The Rich?), a gigantic proportion of our country's economic growth over the past 30 years has gone directly into the pockets of the top one-hundredth of one percent of the population, who now have an average annual income of $27 million per household. Meanwhile, the average annual income for the bottom 90% is only $31,244.  Yet Congress goes along with huge tax breaks for the rich.

Our Congressional Elite.
 To make matters even worse, some of the Congressional members who act on legislation favoring the wealthy are wealthy themselves. According to an article published by the Center for Responsive Politics titled Congressional Members' Personal Wealth Expands Despite Sour National Economy,” almost half of our federal legislators are millionaires themselves.  Roll Call's "Guide to Congress" lists the 50 Richest Members of Congress. You can be sure that most of those who are not yet millionaires certainly will be after they leave office and move into lucrative corporate, consulting, or lobbying positions.

Taxing the Wealthy.  Here is a recap of the highest income tax brackets in effect from 1936 to the present. (source:
  • From 1936-1963 (24 years), the rate ranged from 81% to 94%.  
  • From 1950-1963 (14 years), the rate ranged from 91% to 92%.  
  • From 1964-1981 (8 years), the rate ranged from 69.125% to 77%..  
  • From 1982-1986 (5 years), the rate was reduced to from 69.125% to 50%.  
  • From 1987-1992 (6 years), the rate fluctuated between 28% and 38.5%.
  • From 1993-2000 (8 years), the rate stabilized at 39.6%.  
  • In 2001, the rate was reduced from 39.6% to 39.1%.
  • In 2002, the rate was reduced from 39.1% to 38.6%.
  • In 2003, the rate was reduced from 38.6% to 35%, where it still stands in 2011.

A Boon for the Wealthy. For 45 years, the highest income tax rate for the ultra-wealthy was at 70% or higher, and our country prospered. Since then, the maximum tax rate has been cut in half and look where we stand today. While these tax cuts have generated untold riches for the wealthy, the rest of the country has suffered from huge unemployment rates, loss of home values, loss of job benefits, loss of retirement funds, a substandard educational system, a crumbling national infrastructure, threats of cuts in Social Security, Medicare, and Medicaid,, and an ever-increasing national debt,

It Started with Carter. And it's not just the conservatives who are to blame. Both parties are tainted with this mutual gift exchange between the two major political parties and the elites. It all pretty much started under Jimmy Carter. In 1978, his Democratic Congress passed a bill to cut the top rate of the capital gains tax from 48% to 28% (where it remains today). and Carter signed it into law.  What a windfall for the wealthy!

Continued with Reagan.
 Not to be outdone, Ronald Reagan, in a can-you-top-this gesture, signed his Economic Recovery and Tax Act into law, which unleashed a bunch of extra benefits for the wealthy, including tax cuts for corporations and reductions in both capital gains and estate taxes -- something to warm the heart of every plutocrat in the country.  And campaign contributions continued to pour into campaign coffers.

And Culminated with Bush. In the year 2000, George W. Bush finally made it public when he stated to a room full of wealthy donors, "Some people call you the elites. I call you my base."  And the wealthiest of the elites were probably his home base.  They rewarded Bush and he went on to pay them back with his big tax cuts that drastically favored the rich over the middle and lower classes.   Bush maintained that his 2001 tax cuts would benefit all Americans, but that proved not to be. A source quoted in Mother Jones claims that 51% of the tax cut benefits went to the top 1% of the population.   (see:How the Oligarchs Took America).

The Rising Tide. Politicians who pass bills giving financial advantages and incentives to the rich like to cite the oft-use catchphrase, "A rising tide floats all boats."  There may seem to be an element of truth in there somewhere, but not everybody in this economy is wealthy enough to own a boat (proverbial or otherwise).  So, unfortunately, all it does for many people is to just flood their back yards with increasing financial problems.

The Ties that Bind.
 It is increasingly obvious that both parties are in bed with big money interests, and that they are willing to cater to them in order to garner their favor and financial support. And it isn't just a one-night stand. They are joined at the hip. These are indeed the ties that bind our government to wealthy special interests, instead of to the people. These are the ties that have destroyed our democracy.

Coming Up. 
                          Political Duopoly: Working Partner of the Plutocracy

Plutocracy to Plutonomy: From Bad to Worse!

Campaign Funding's Impact On Democracy

Money Talks, And Politicians Listen!

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