| DON'T WORRY, IT WILL TRICKLE DOWN
By Rick Wilson
Benjamin Franklin was past 80 when he attended the U.S. Constitutional Convention in 1787. Debates continued for nearly four months in the heat of a pre-air-conditioned Philadelphia summer.
When it was over, a woman asked, "Well, Doctor, what have we got â a republic or a monarchy?"
Franklin's answer was short and punchy: "A republic, if you can keep it."
That's the question today, although now the problem isn't monarchy: it's money-archy.
There's always been inequality of wealth and income in the U.S., but we're living in an age of extremes.
Since the late 1970s, the gap has steadily widened to the point where, today, the wealthiest 0.1 percent of Americans (that's one-tenth of a percent, or 1 in 1000 people) owns as much as the bottom 90 percent.
Wealth is defined as what you own minus what you owe, which puts lots of us in the negatives. And there's no necessary connection between wealth and work.
The three wealthiest Americans â Bill Gates, Jeff Bezos and Warren Buffett â now own more than the bottom half of the U.S. population, a total of 160 million people or 63 million households.
The top 25 billionaires are worth $1 trillion (thousand billion, but who's counting?), as much as 178 million Americans or 70 million households.
The billionaires who are on the Forbes 400 list now own more wealth than the bottom 64 percent of the population.
For that matter, a few Walmart heirs own more than the bottom 40 percent of Americans.
In terms of income, the Economic Policy Institute found that the top 1 percent of Americans got 85.1 percent of total income growth from 2009 to 2013. In 2013, the 1.6 million families in the top 1 percent made over 25 times as much on average as the 161 million families in the bottom 99 percent.
The bogus "tax reform" just passed by Congress â and supported by all of West Virginia's delegation, with the exception of Sen. Joe Manchin â will only make the gap grow bigger.
The last time the wealth gap was that large was in the late 1920s, right before the Great Depression.
That worked out well. Not.
That growing divide wasn't the result of pure market forces. Nor can we blame sunspots, constellations or cosmic destiny. It was caused by decisions made â and not made â by people. These include tax and trade policies, assaults on unions, a stagnant minimum wage, and deregulation (which in reality is re-regulation).
Since economic power translates into political clout, that means trouble for a democracy in which elections are becoming more like auctions, public policies are bought and sold like commodities and armies of lawyers and lobbyists grind away, 24/7.
The 2010 Supreme Court Citizens United case added fuel to the flame by ruling that corporations were people and money was speech, which makes it easier for the wealthy to buy even more power and influence to widen the gap.
(Far be it from me to dispute the wisdom of the court, but most people I know think people are people and corporations are corporations and speech is speech and money is money.)
In 2014, researchers from Princeton ran the numbers. The results weren't pretty.
Here's a summary: in political science, there are different models of how decisions are made in America to answer the question "Who really rules?" These include majoritarian democracy, in which the will of average Americans prevails; interest group pluralism, in which various groups duke it out and come up with something like the general will; economic elite domination, which is what it sounds like; and biased pluralism, in which corporations, business associations and such prevail.
Looking at hundreds of cases, the results weren't even close. In the cases where broad public opinion stood against economic elites, the public didn't stand much of a chance. Here are some of their observations:
- "The preferences of economic elites ⦠have far more independent impact upon policy change than the preferences of average citizens do."
= "In the United States, our findings indicate, the majority does not rule â at least not in the causal sense of actually determining policy outcomes."
- "When a majority of citizens disagrees with economic elites or with organized interest, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it."
And here's the punchline: "We believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America's claims to being a democratic society are seriously threatened."
While some scholars have criticized these findings, the research of French economist Thomas Piketty, author of "Capital in the Twenty-First Century," suggests that these things could actually get even worse, given that returns on wealth grow at a higher rate than productivity, let alone wages for workers, which lag far behind.
That means we're in danger of effective rule by wealthy dynasties, rather than democratic majorities.
The results aren't inevitable though, unless we just let it happen. Former black slave and later abolitionist hero Frederick Douglass put it this way: "Find out just what any people will quietly submit to and you have the exact measure of the injustice and wrong which will be imposed on them."
The question posed to Franklin is still relevant. We were given a republic. Will we keep it?
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