“Of the 1%, by the 1%, for the 1%”, Joseph E. Stiglitz
from Edward Fullbrook
The meaning behind the title, “Of the 1%, by the 1%, for the 1%”, of Joseph Stiglitz’s article in the May issue of Vanity Fair may be lost on non-Americans. It is a play on Abraham Lincoln’s “government of the people, by the people, for the people” which, along with Patrick Henry’s “Give me Liberty, or give me Death”, was once upon a time the most revered set of words in American culture.
Stiglitz begins by noting that 25 years ago the richest 1% of Americans had 33% of the nation’s wealth and took 12% of its yearly income, whereas the corresponding figures today are 40% and almost 25%. He then offers reasons to believe that not only will the results of this program of massive upwards redistribution of income and wealth be retained but will also be augmented.
The article’s gist, as its title suggests, is that American democracy has become a sham. It still maintains the trappings of democracy, but in reality it is a system of government controlled by the richest 1% of its citizens. The USA today is shaped by “changes in the rules that have been bought and paid for by the financial industry” and by the 1%’s ownership of elected and unelected officials. Stiglitz elaborates as follows:
The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.
Stiglitz obviously believes that the worst is yet to come.
An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.
He calls attention to the pro-democracy uprisings in Egypt, Tunisia, Libya, Yemen and Bahrain “where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life” and where the good of the many is routinely sacrificed for the good of a tiny few. Then Stiglitz poses a big question.
As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.
Stiglitz’s article may be read here.
Even Larry Summers, this past weekend at a shin dig put on by the George Soros, echoed Stiglitz when he said “Inequity has risen in the last decade, and it will continue to rise.” Read more at http://curiouscapitalist.blogs.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/
Most chilling is the prospect of the deluge that the 1% are inviting by persisting in their greed.
Their behavior is like cheating at poker on the Titanic.
Inevitably there will be a reckoning.The longer it is delayed the bloodier it will be.
Curioser and curioser!
As a student of the Chinese Revolution, and looking at it from a political science perspective, I would be very interested in learning the different scenarios proposed for a second US revolution/deluge/reckoning. Is there any scholarship on scenarios?
Question is whose blood? I was in Chile when Salvador Allende was elected President. The first ever elected President of Chile. I was also in Chile when Allende was deposed by the military under Pinochet and the so called “Popular Front” government established (read, single party rule, with no elections and most civil rights suspended). Allende made many mistakes, including promoting Pinochet to command the Chilean Army. Allende rushed too quickly to Socialist reforms and failed to build bridges to Chilean businesses and the Chamber of Commerce. He also had a naive trust that everyone supported democracy. The right and far right parties pushed back. He might have been able to negotiate a settlement with these parties had he been given the chance. He was not. He was removed from office by the military and murdered. But Allende’s mistakes pale by comparison to Pinochet’s crimes — murdering 2,000-3,000 to take power, imprisoning without trial another 80,000, and subjecting 30,000 to 40,000 to torture during his ruling period. Yet if few protested Allende’s murder, even fewer protested Pinochet’s crimes. And when he fled Chile to avoid prosecution but for the rebellious British (who sent him back to Chile despite US objections) he might have faced trial. As it turns out he died (of natural causes they say) before he could go to trial. Also included in his acts as dictator was the privatization of almost every aspect of Chilean economics; the evidence indicating these actions were taken at the insistence of the US. According to Milton Friedman, this privatization lead to the so called economic “Miracle of Chile.” Chile’s GDP grew like never before and the economy expanded. But more than that Friedman contends the free-market economics lead directly to the replacement of military dictatorship in Chile with democracy. But the free-market changes also produced greater economic inequality than ever before in Chile, and welfare indicators such as job security, wages, divorce rates, infant mortality, etc. crashed. And as with much of the “economic gains” attributed to the dot.com, financial, etc. booms in the US, much of the reported economic gains turned out to be chimera. I’m not saying this is the scenario for the US, but it’s something to think about.
For me personally, acquiring everything financially and politically is the core
function for the 1% wealthy. Without a doubt they all have a psychological disorder.
Can we as a society today just allow this to happen?? Well we are! It should never progressed this far. Listen to everyone other than a few. How can this happen? Where will we be? We’ll be a third world nation. YOU DON’T HEAR A DAMNED WORD ABOUT CHANGING IT AS IS OUR RIGHT!!!
OBVIOUSLY WE NEED SIMPLY SOMEONE THAT CAN ATTRACT THE MEDIA WITH THE COMMON SENSE APPROACH. CREATE SOMETHING TO STAND FOR AND SHOUT IT!!!
PERSONALLY I THINK THAT VIOLENCE IS THE ANSWER THAT “CREATES” THE FEAR TO ABSTAIN
“POST HASTE”. THEN IF FORCED TO USE IT; KNOW THAT WHAT YOU DO SAVES OUR COUNTRY FOR OUR CHILDREN AND MAKES THE WORLD PAY ATTENTION.
I know it seems simplistic but who wants to sit and read and read.
Help! Help!
Perhaps the 1% have wanted/planned it this way all along. All they have to do is keep up with the puppet show of government, wars, climate change etc to deflect the debt heavy cattle anger from them while they circle their gold wagons.
Indeed. It comes to the notion that as long as you have the trappings of a democracy, you have a real democracy.
There are some wealthy people that look at the path our country is taking and recoil in horror. Maybe they lived through some difficult times themselves before they achieved their current status. But the greedier ones get all the press, while the responsible ones, such as those that are members of Responsible Wealth, are mostly ignored.
http://faireconomy.org/responsible_wealth
There are only two ways I can see the situation improving before social, political and economic catastrophe strikes.
1. The constitution is amended. No president can do much with antagonistic congressmen and senators. Both parties are in the pockets of the rich 1%. Effective campaign funding caps are vital.
2. A significant campaign for secession from the Union in progressive states scares the hell out of the 1%. Are there any likely contenders?