Studies Show Republicans Don’t Understand What Produces Wealth in America

Eric Zuesse, originally posted at strategic-culture.org

A Pew poll published on May 2nd was headlined “Why people are rich and poor: Republicans and Democrats have very different views”, and it reported that, “Most Republicans link a person’s financial standing to their own hard work – or the lack of it. Most Democrats say that whether someone is rich or poor is more attributable to circumstances beyond their control.” The partisan difference on this issue was stark: “By about three-to-one (66% to 21%), Republicans and Republican-leaning independents say hard work, rather than a person’s advantages, has more to do with why someone is rich. By nearly as wide a margin, Democrats and Democratic leaners say the opposite: 60% say a person is rich because they had more advantages than others, while just 29% say it is because they have worked harder.”

So, I decided to look at the data regarding this question.

Pew itself had published evidence about this matter, on 7 August 2008, under the title “Upward Intergenerational Economic Mobility in the United States”, and noted in their summary, that:

• Men experience sharply higher rates of upward economic mobility than women.

• Blacks experience dramatically less upward economic mobility than whites.

• Rates of upward economic mobility are highest for white men, followed by white women, black men and, finally, black women.

For example, the report said, “women born to parents in the fourth and top quintiles [richest 40%] are more than twice as likely as men to fall to the bottom quintile [poorest 20%].” In other words: upper-income girls in America are “more than twice as likely as” upper-income boys are, to become poor adults.

And: “Only 21 percent of [Blacks] who start in the top income quintile remain there as adults.” By contrast, for Whites, the latter figure is not “21 percent,” but instead “39 percent of the children in [White] families in the top income quintile remain in the top quintile” as adults. That’s almost twice the percentage (39% as compared to 21%) who stay rich as adults. Thus, rich-born Blacks have a much more precarious financial future (almost twice as precarious), than do rich-born Whites, and a generally similar situation pertains also for girls as compared to boys: the girls have a much more precarious financial situation than do the boys.

Of course, whether a person is or isn’t a male, or a White, are obviously “circumstances beyond their control.”

The linked 48-page report there, also titled “Upward Intergenerational Economic Mobility in the United States”, was written by Pew’s Dr. Bhashkar Mazumder, who is one of the top experts concerning U.S. economic mobility, and he notes that this study is the first ever to include a crucial set of data that’s called the “National Longitudinal Survey of Youth 1979 cohort (NLSY),” which had been neglected by most previous studies “despite having several attractive features,” which Mazumder then listed. So, his was the most comprehensive study until at least 2008.

The results, from combining the NLSY data with other data, are:

Consistent with the previous findings of the Economic Mobility Project, the NLSY shows strong “stickiness” in both the bottom and top quintiles of the income distribution. A sizeable number of children who grew up in the bottom fifth remained there as adults, and the same was true of those who grew up in the top fifth. Overall, fewer than 40 percent of individuals who start in the bottom half of the income distribution move to the top half of the distribution as adults.

That last statement is quite striking. If, instead, that finding had been “Overall, 50 percent of individuals who start in the bottom half of the income distribution move to the top half of the distribution as adults,” it would be meaning: half of the individuals who start in the botton half, rise from the bottom half into the top half as adults. And, yet, even that doesn’t seem to be anything like the American dream (of being ‘the equal-opportunity society’), though it’s better than the reality. The actual finding was that “fewer than 40 percent of individuals who start in the bottom half” rise. On page 18 of the pdf is given the racial breakdown of this particular finding: “While 46 percent of whites who are born to parents below the median will surpass the median [the average], the comparable figure for blacks is only 22 percent.” So: even for Whites, the overall U.S. is a somewhat classist society; but, for Blacks, U.S. class-rigidity is outright depressing. And, both girls and Blacks face especailly precarious financial lifetime prospects, as compared to boys and to Whites.

Obviously, equal opportunity is a myth in the United States. This doesn’t come from me — it comes from the data. Republicans are up against the data, when they deny that “whether someone is rich or poor is more attributable to circumstances beyond their control” than it is to “their own hard work.” In fact, the data make obvious that the reality is the opposite of what Republicans are assuming — the data show that in order for an American child to have a rich adulthood, that child is going to have to work much harder if it’s a Black or a girl, than if it’s a White or a boy. This is America’s reality, stripping away the very-predominantly-Republican (but more generally the conservative) myth. The reasons why this is the case, aren’t necessarily entirely discrimination against Blacks and against girls; but, to explain such findings without acknowledging the fact that discrimination (prejudices, bigotries) constitutes a severe economic-and-justice problem in this country, and without acknowledging that this problem would need to be eliminated in order for the U.S. to become anything like what Republicans think America is (i.e., an equal-opportunity society), would be extremely unreasonable, under the existing circumstances, as shown in the data.

Furthermore, reader Will Dippel was kind enough to point out, in a comment to the present article’s posting here at Washingtonsblog, that an August 2016 study, “The Ever-Growing Gap”, has found that during 1983-2013, wealth increased 85% among Whites, 69% among Latinos, and 27% among Blacks; so, the unequal-opportunity problem in America is rapidly getting even worse than it already is. The trend, in other words, is atrocious; and, so, Republicans’ downplaying of this problem is extremely destructive, in addition to being extremely unreasonable.

A 23 August 2017 Quinnipiac poll asked Americans “How serious a problem do you think that prejudice against minority groups is in the United States today; a very serious problem, a somewhat serious problem, a not so serious problem, or not a problem at all?” 76% of Democrats said “Very serious.” 21% of Republicans did. 26% of Republicans said “Not so serious.” 11% of them even said “Not at all” serious. (Those same respective figures amongst Democrats were only 4% and 1%.) Republicans are thus starkly oblivious to the glaring inequality-of-opportunity problems in the United States; and, so, Republicans’ economic-and-justice proposals ignore an enormous part of American reality.

On 10 June 2014, Carter C. Price, at the Washington Center for Equitable Growth, headlined “Patterns of economic mobility in the United States”. It’s a really terrific report (48 pages long in its linked pdf version), which summarizes lots of previous studies related to this question. For example, the opening of this report shows that the physical location where a given person lives within the U.S. is a crucial determinant of that individual’s likelihood of being able to draw a higher annual income than that person’s parents did. Some parts in the U.S. have remarkably low class-rigidity, whereas other U.S. regions have stunningly high class-rigidity, more like a caste system than like any sort of equality-of-opportunity or democracy.

Not only is the U.S. a nation of extremes, but it’s a nation where some areas are, regarding class-rigidity, close to embodying the Republican view of the entire nation (i.e., exhibit remarkably low class-rigidity), and other parts of the country are extremely not (i.e., they have exceptionally high class-rigidity). This disparity is made shockingly clear in the map of the U.S. shown on Price’s page 8 (and also — and more clearly — here). The biggest “extremely not” region (i.e., with very high class-rigidity) extends (and here is a U.S. map showing the outlines of each state) all the way from Michigan, down to Florida, and this area is also very wide, extending from Louisiana in its southwest, to Virginia in its northeast, thus encompassing both the rustbucket states plus almost all of Old Dixie. But the largest “very yes” (i.e., with highly equal-opportunity) region, where the traditional American dream of intergenerational mobility is almost a reality, extends from the Dakotas and Minnesota, down through Nebraska and Iowa, to Kansas. Remarkably, both of those two large extreme regions, the “extremely not” and the “very yes,” are overall heavily Republican. Whereas in the “very yes” region, Republicans might be overwhelmingly endorsing the view that America is an equal-opportunity society on account of what they are seeing within their own states (which is remarkable equality of oportunity), there is simply a mystery as to why Republicans in the “extremely not” states (Old Dixie) are likewise overwhelmingly endorsing the view that America is an equal-opportunity society — because those Republicans live in areas that are anything-but equal-opportunity regions. (A hypothesis on this matter might be that Old Dixie happens also to be known as the Bible Belt — it’s famous for the residents’ extraordinarily high amount of faith; and this means that believing counter-factual things is especially easy for these individuals; empirical evidence is ignored if it conficts with any item of faith; indeed, in their high-faith culture, faith is highly honored by them; and this could explain why Republicans in Old Dixie think that they live in an equal-opportunity society.)

Furthermore (p. 19 of the document), Price’s study summarizes “the work of University of Ottawa economist Miles Corak, who produced estimates for the intergenerational earnings elasticity for several countries.” Price’s report goes on:

According to Corak’s data, the United States has an intergenerational earnings elasticity of 0.47, indicating that nearly half of future earnings differences among children are associated with differences in parental earnings. This means that according to this measure the United States has much lower economic mobility than many developed economies in the Organisation for Economic Co-operation and Development, and lower also than Pakistan.

Using data from the World Bank on the Gini coefficient, a measure of inequality, Corak found a strong inverse relationship between inequality and mobility [i.e., high mobility went with high equality]. Princeton economist and former Chairman of the Council of Economic Advisers Alan Krueger used the term the “Great Gatsby Curve” to describe this relationship.50 This curve has sparked a great deal of debate, particularly because the United States stands out among wealthy nations for its high inequality and low mobility. (See Figure 7.) 

(That boldface is added by me, to emphasize this glaring contrast between Republicans’ views of America, versus the data-demonstrated reality of America.)

Corak’s ranking of 22 countries on “Intergenerational earnings elasticity” is shown by Price (also on p. 19), and the U.S. rank there is #15. Numbers 1, 2, and 3, are Denmark, Norway, and Finland. Numbers 20-22 are Brazil, China, and Peru (at the very bottom). Immediately above the U.S. in the rankings is #14, Switzerland; and immediately below the U.S. is #16, Argentina. Virtually all of Western Europe, plus Japan, Singapore, Australia, New Zealand, and Canada, ranked higher than the U.S.

Applying a very different methodology, a January 2013 World Bank study, “Inequality of Opportunity, Income Inequality and Economic Mobility: Some International Comparisons”, ranked “Inequality of economic opportunity index” for 41 countries, and showed the U.S. as being #24 of the 41, with Norway #1, and Guatemala at the very bottom, as #41. The Index itself “ranges from 2% in Norway to 34% in Guatemala” and is around 18% for the U.S. So: the U.S. is somewhat midway between Norway and Guatemala. Republicans wouldn’t be able to find this America, on their conceptual map of the world. The real America is far from being number-one, in these global rankings

Thus: the U.S., as a whole, is not (even if it might have been in the past, at least for male Whites) an equal-opportunity society; it isn’t that even for male Whites — and definitely not at all, for Blacks, nor for women.

That doesn’t necessarily mean lazy Americans can become wealthy, but this also does happen to be true, and it’s true even around the world, not just in America: Lazy individuals can be, and sometimes are, extremely wealthy. The children of billionaires can become billionaires simply by inheriting it (or having it gifted) from their parents. That can happen even if the heir doesn’t work a day in his or her life. It can happen almost entirely by good luck. And, in order to become one of the world’s wealthiest individuals, inheritance from wealthy parents is all but essential. For examples of this important fact:

Consider the Forbes list of the world’s wealthiest individuals in 2010. #1 on the list was Mexico’s Carlos Slim. His father Julian was a real estate millionaire in Mexico City, and taught business and investments to all his children. Two sons of Carlos, who were Carlos Slim Domit and Patrick Slim Domit, led America Movil, which was the Western Hemisphere’s largest wireless carrier, and the largest subsidiary of Carlos’s own Grupo Carso conglomerate. A third son, Hector Slim Seade, led Telmex, Mexico’s phone monopoly.  #2 was America’s Bill Gates, the son of William Gates II, cofounder of the giant law firm, Preston Gates & Ellis. #3 was America’s Warren Buffett, son of the wealthy stockbroker and congressman, Howard Buffett, who was one of the founders of America’s libertarian movement, and who had an article published in the second year’s edition of the founding magazine of libertarianism, New Individualist Review, in 1962, where the other writers included Milton Friedman, Murray Rothbard, and Ralph Raico. Howard Buffett was also a founder of the John Birch Society. His son Warren felt politically alienated from him even as a child, but Warren’s focus on investing still was taught to him by his father. #4 was Indian Mukesh Ambani, son of the millionaire founder of Reliance Industries, Dhirubhai Ambani, of whose corporation Mukesh was now the Managing Director. #5 was Indian Lakshmi Mittal, son of Mohan Lal Mittal, the founder of the steel manufacturing company Nippon Denro Ispat. #6 was American Lawrence Ellison, who truly had risen from the middle class, after his adoptive father, Louis, made a fortune in Chicago real estate, and lost it during the Great Depression. #7 was Frenchman Bernard Arnault, founder of Ferret-Savinel Corp., renamed Ferinel Corp. The book From Predators to Icons, notes (p. 146) that his parents were extremely wealthy. #8 was Brazilian Eike Batista, whose father, Eliezer Battista da Silva, headed the Brazilian mining giant, Vale Corp. #9 was Spaniard Amancio Ortega Gaona, fashion magnate, who authentically came from a working-class background. #10 was German Karl Albrecht, founder of the Aldi supermarket chain, who also came from a working-class background.

So, of the world’s ten wealthiest individuals in 2010, 8 were sons of millionaire founders of major corporations and organizations. 1 was middle-class, and 2 were lower-class. And, the two lower-class ones were at the bottom of the top-ten list, and both of them weren’t Americans. Among the top 8, all but 1 (Ellison) were from extremely rich parents.

The advantage that being born to wealthy parents produces is enormous: The children of the very rich constitute only a tiny minority of the population, less than 1%, but they included, in 2010, 70% of the world’s ten wealthiest individuals. Eike Batista was typical of the group in proudly saying “All my businesses started from zero. … I made my own connections.” But even he had to admit, after turning $6 million he had made in gold-trading commissions into only $300,000 and then taking the gamble of buying a gold mine with it, “Thank God, the mine was idiot-proof. Only an extremely rich mine could have withstood all the mistakes I made. I was lucky.” So, the general formula for becoming extremely wealthy is to have the luck to be born rich, and then to have luck yourself in business (or else in the performance of your portfolio). Just being a “brilliant” businessperson works for very few, and it fails for virtually everyone else who is “brilliant.” But having wealthy parents who teach you their trade will increase enormously your likelihood of success. The top key to being on the world’s wealthiest list was to be born rich. (Many hard-working geniuses are like Mozart, or Turing, or van Gogh — they die poor.) Hereditary wealth was the most important feature (70%) of the top ten members of the global aristocracy, in 2010.

On 13 March 2013, Bloomberg News headlined “Brazil’s Richest Family Forging $13 Billion Niobium Dream”, and reported, “In 1965, U.S. Navy Admiral Arthur W. Radford persuaded Walther Moreira Salles, a Brazilian banker and former Ambassador to the U.S., to back a venture to produce something called niobium. At the time, there was no market or commercial use for the powdery element – just studies suggesting that tiny amounts of it could make steel stronger.” Ambassador Salles thus learned crucial information that had been discovered by U.S. Government researchers. “Moreira Salles decided to buy a majority stake in the operation, and the bet paid off. … The Moreira Salles family’s wealth is almost three times that of Eike Batista, who was Brazil’s No. 1 until November.” That good luck came to Ambassador Salles by way of information he had received from his friend, U.S. Navy Admiral Radford, whose profession had enabled him to know the great importance that Niobium would have. Knowing ‘the right people’ helps enormously. What children are raised with the most of that particular advantage, of ‘the right friends’? The children of the very wealthy, of course.

This inherited-wealth basis of the aristocracy has deep implications regarding public policy, and perhaps the most immediate one is estate taxes, which Republicans prefer to call “death taxes,” as if more than 1% of estates have any federal estate tax on them at all — which is not true. 99% of estates in the U.S. have no federal estate taxation of them at all. To call the estate tax, as Republicans do (because their heroes who are Republican aristocrats do), a ‘death tax’, is a lie (at least on the part of those aristocrats, even if not among the Republican mass who crave to become clones of their Party’s aristocrats, and who might thus more properly be called “suckers” than “liars,” though Republican aristocrats are indeed liars on this matter).

Taxes, of any sort, are, in the final analysis, ultimately about distributing the burden of financing government. Should laborers pay taxes at a higher rate than heirs, as they now do? Heirs don’t pay any federal tax at all on their inheritance (unless the estate is among the wealthiest 1% — and, even then, the rate of taxation usually ends up being far below the rate that’s charged on earned income), but workers pay tax on all of their earnings that they draw from their sweat (not only income above the meager income-tax exempt amount but also in the sales and other taxes they spend even on their using the portion of their wages that’s below the tax-exemption — which exemption currently is set at around $4,000 that’s untaxed per person). Is this low an estate-tax fair? It’s theft from the earned, and it’s transferring this theft as booty to the unearned. It’s what the propaganda from aristocrats (who own the major ‘news’ or propaganda media who pump continually against ‘the death tax’) has caused millions of American suckers to favor, even while it actually robs these people of what they earn. But the conservative mass accept this status-quo because they think that, somehow, they’re going to compete against the aristocrats and win — and, that when they win, they will benefit from there being no taxation of unearned income their children will receive from them as gifts and as inheritances. Maybe the odds on that happening are about as good as the odds that these people will win the lottery; but, at least the lottery can be a reasonably fair game, and this real life situation certainly is not. And one reason it’s not, is that unearned income is taxed far lower than earned income is.

The deceptionists portray estate taxes as being theft from everyone who dies. But it’s not taking, at all, from people who are dying; it’s instead taking from their often-useless heirs (at the time when the asset is being transferred to them) and only if the deceased was enormously wealthy (was above the level of wealth at which a federal estate tax exists); and this taking is not theft at all, because an heir, by definition, hasn’t done a thing to earn whatever it is he or she is inheriting — it’s purely a windfall to him or her, which rewards that person’s good luck to have been born rich, and which turns this good luck into good luck squared, and at the expense of all workers, who have actually earned their keeps and paid taxes on all of it. The people who are being robbed by this are everyone who isn’t so phenomenally lucky — and their bad luck thus becomes bad luck squared, because they’re being saddled with the burden of financing a government that gives to heirs (and provides tax-supported services to them such as training their employees so that they’re literate, and building the highways on which a billionaire’s corporation transports its goods, etc.) without taking anything at all from them (unless the estate they inherit happens to have been among the largest 1%, and even then the taxation-rate at present in the U.S. is usually lower than what an actual laborer pays).

By rights, all inheritances should be taxed at a 100% rate, because it’s all unearned money. (Otherwise, it would be pay, which is taxed.) To enforce that requirement, however, would entail draconian penalties against tax-evasion, and against exporting wealth as a means of avoiding that 100% tax on all (gifts and) inheritances that exceed modest amounts. Consequently, those changes would first need to be made. However, certainly, the taxes on estates that are over a million dollars, which are currently subject to estate taxation, should be taxed at far higher rates than they are — not taxed zero as Republicans and conservative Democrats urge. The only big problem is the current excessively low taxation-rate on the estates of the very wealthy. Estate-taxation of those estates needs to be increased enormously, in order for an equal-opportunity society to be able to exist at all — for it even to be able to come into existence here.

Why are gifts tax-free, whereas earned assets (such as salaries) are not? Earned receipts are taxed, but unearned ones are not. That’s simply vile, but the aristocracy has bamboozled the public to think it’s terrific. No such society is actually committed to equality of opportunity. It’s committed instead to the reverse. The aristocracy has the public by the throat. To be more accurate, they’ve got it by the mind. And they need the so-called “experts” on morality in order to do this con-job for them. That’s largely the clergy who peddle the morality that promotes aristocracy – God, after all, has selected God’s People to be God’s People – and the ‘news’ media do the remainder of this scam, for the aristocracy, by peddling the ‘social blessedness’ of extreme wealth (‘philanthropy’ and other means of leaving a decedent’s asset under private control, instead of transferring it to public control — control by the government, which would help reduce everyone else’s taxes). Other than the clergy and the ‘news’media who peddle this line, the peddlers for the aristocracy on this are the professors who teach the ‘classics’ that were written by Plato and by other agents of the aristocracy in former times, which (no coincidence) ‘justify’ (though sometimes on a non-religious basis) the existing enormous inequality of wealth. We’re all taught, throughout our lives, this inequality of personal rights, as being, somehow, ‘democratic’.

On 5 June 2006, the Republicans’ aristocratic Tax Foundation headlined “Poll Questions on the Estate Tax”, and reported that 68% of respondents wanted “completely eliminating the estate tax – that is, the tax on property left by people who die.” The question was a lie, because only about 1% of “people who die” were wealthy enough for their estates to be taxed at all under then-current federal law. Honest wording would have been “tax on property left by millionaires when they die.” But on 16 December 2010, Paul Waldman headlined in the liberal (or: the Democratic Party’s) American Prospect, “The Oddly Unpopular Estate Tax”, and he said that a poll he had done showed that even when the question was honestly phrased, the public support for abolition “was only lower by about 10 points.”

The American public wants the estate tax eliminated and the burden transferred onto workers. But Republicans especially do. And, thus, they favor actually the opposite of the equal-opportunity society. And, so, the 2 May 2017 Pew poll found that Republicans especially believe in the myth that America is an equal-opportunity society. Their heads are in a fantasyland. Unfortunately, they vote. But so too do Democrats, and their vision of reality is only marginally more realistic. Clearly, the American public are heavily deceived by the American aristocracy, so as to consent to the existing regime and to want it to become even worse (by either eliminating or else lowering estate and gift taxation).

What, then, is the difference between the Republican and the Democratic Parties? The level of hypocrisy is even higher amongst the Democratic Party’s billionaires and their agents, than amongst the Republican Party’s billionaires and their agents. In the Democratic Party, the line is: Don’t worry really about America’s extreme inequality of wealth, but only about America’s inequality of opportunity.

Larry Summers, the chief economist for President Bill Clinton and President Barack Obama, is an archetypal aristocratic agent in the Democratic Party, and so he represents very well the line of that Party’s billionaires. On 15 June 2012, Bonnie Kouvassi at Huffington Post, bannered “Larry Summers: We Need To Focus On Inequality of Opportunity”, and she presented a video of him teaching at Harvard, saying, “I think we can accept, I think we should accept inequality of results, recognizing that those who earn more are in a better position to contribute more to support society.” He attacked those who criticized America’s extreme inequality of wealth, and he praised at length “those who are in a better position to contribute more to support society.” Summers’s aristocrat-enhancing view was that, even in a nation of such extreme wealth-inequality as America, inequality of opportunity can be reduced without also reducing inequality of wealth. It’s not just false, but absurdly false: In a country with such extreme wealth-inequality, inequality of opportunity is largely the result of inequality of wealth. Addressing the former without also addressing the latter is doomed to fail. One side of that whole cannot be attacked without simultaneously attacking the other side of it. As a reader at a blog phrased the matter, on 29 September 2013: “The privileges of wealth grow exponentially with each generation in no small part because of the greater educational opportunities the children of the rich have – with less distraction from needing to work their way through school and less debt with which to begin the ‘rat race’.” If anyone should know about that, it’s the former Harvard president Summers. However, Summers routinely displayed enormous respect for wealthy people, and contempt for the poor. He was quoted in Ron Suskind’s 2011 Confidence Men as saying in 2009 (p. 197), “One of the challenges in our society is that the truth is kind of a disequalizer. … One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way they’re supposed to be treated.” In other words: he holds that the enormous and increasing inequality of wealth in America reflects more than in prior eras the enormous inequality of worth among individual citizens: the super-rich are just super-terrific, and the poor are just super-terrible, in his view. He authentically reflects classical writers such as Quesnay, Smith, and Pareto — agents of the aristocracy in their own time (and they all despised the poor, just as Summers does). But those same classical writers are also implicit in the Republican aristocracy’s agenda. The big difference between the two Parties, is that, though both are essentially the same (one-party — aristocratic-party) rule, over the country, the Democratic Party’s aristocracy and their agents (the Democratic wing of the aristocratic party) are far better at hypocrisy. They pretend to care about the public’s interest. Whereas the Republican Party’s aristocracy (the Republican wing of the aristocratic party) rely upon ‘tough talk’ and a ‘hard-nosed’ approach, the Democratic Party’s (wing) rely instead upon ‘equality of opportunity,’ but both sides of the aristocracy are actually pumping the same basic lie. And, of course, the Democratic Party’s mass of voters haven’t got a clue to that reality. But, neither do the Republican Party’s. The voters, in both, are deceived, by different sides, of the same con-operation.

Consequently, it’s obvious that discrimination exists not only on the basis of race, and not only on the basis of gender (etc.), but also — and universally — on the basis of wealth.

And, the policy-implications of this, extend far beyond merely such issues as estate-taxation (though that’s absolutely essential in order to address discrimination on the basis of wealth), but also need to countervail the other forms of bigotries (not only against the poor). For example: the August 12th Charlottesville Virginia racist attacks represent, in an extreme form, the far more widespread common bigotry against Blacks. Such blaring and bleeding headline events as this (and their prosecutions or lack of same) are open sores in a cultural disease that extends far wider, and deeper, than just that bleeding skin-surface of events. In an oligarchically controlled country, politics will inevitably focus only upon that skin-surface (especially when it’s bleeding), but the cause of the chancre is far more important.

The public are suckered by the agents for the billionaires. This happens even more to Republicans than to Democrats, as is shown in the polling-numbers. Whereas, at the bottom, amongst the masses, there are enormous differences between Republicans and Democrats on some issues; there is, at the top, amongst the billionaires who fund the Party and its organs (such as the Democratic aristocrats’ American Prospect), very little real difference. But Democratic aristocrats are far more-skilled hypocrites than Republican aristcrats are. It’s like in Britain, where Labour’s Tony Blair was a hypocritical imperialist, but the Conservative Margaret Thatcher had been an overt one (and not nearly as aggressive a one as Blair turned out to be). And, so, the two aristocratic groups, Republican (or conservative) and Democratic (or liberal), sound different from one-another; and, that’s the political competiton between America’s two Parties. That’s the level of political debate, in this (and almost every) country. And, it has been proven that America’s aristocracy rule the nation, behind the scenes — the U.S. is no democracy. Whereas a few countries might possibly be classified reasonably as a “democracy,” the U.S. certainly isn’t one of those.

Furthermore, some Republican politicians even give Democratic politicians competition in the hypocrisy department. For example, the Christian-fundamentalist-pandering Republican Judge Roy Moore, who recently won the U.S. Senate nomination to fill U.S. Attorney General Jeff Sessions’s vacated Senate seat from Alabama, was revealed on October 10th to have lied and engaged in tax-evasion. Moore, who is famous for posting the Ten Commandments at his court as the Chief ‘Justice’ of Alabama’s Supreme Court, should have known that one of those Commandments was “Thou shalt not steal” (including steal from the government that’s paying his salary), and that another was “Thou shalt not bear false witness” (including against his detractors who had earlier tried to publicize Moore’s fakeries). Both Parties are con-operations for the aristocracy.

America has an actually one-party Government, with two contrasting sales-pitches to it, and those two sales-pitches are the programs of the two nominal Parties. One sales-pitch, the pitch that’s directed to Republican voters, depends upon that mass’s conservatism; the other sales-pitch, to Democratic voters, depends upon deceiving that mass of voters, to think this Party to be the opposite of conservative — that the Democratic Party is progressive — when it’s actually not. (The Democratic Party, which was progressive when FDR led it, gradually became merely liberal — fake ‘progressive’ — after he died. It’s now more conservative than it is progressive.)

So: Do Democrats understand what produces wealth in America? Polls show that the mass of Democratic voters have a far more-realistic idea of this than Republican voters do; and, that’s just a fact. Perhaps it’s also the reason why, in the research for my book They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, I found that Democratic Presidencies (and, to a lesser extent, Democratic Congresses) have produced far better economic results for the nation than did Republican ones. Democratic politicians, in order to retain their voting-base, need to hew at least a little to the Party’s economic hypocrisies about its concern for “the little guy.” This doesn’t fully anchor the Party’s policies to economic reality, but Democratic politicians can’t afford to make a fetish of denying economic reality, nearly to the extent that Republican ones can, and do. (The Republican Party, after all, proudly declares itself to be conservative; they don’t even try to hide the fact.) And that’s the difference — it’s a very real difference at the voting-base of each Party, but not at the billionaires’ level, which actually controls things and produces the bipartisan (neoconservative-neoliberal) dictatorship that rules America, behind two screens of deceits: one to manipulate conservatives, and the other to manipulate progressives.

On October 7th, the neoconservative-neoliberal (that’s the single ideology of the U.S. aristocracy) New York Times, headlined its lead frontpage Sunday print-edition story, “The ‘Resistance,’ Raising Big Money, Upends Liberal Politics”, and reported that Democratic billionaires such as fund-manager George Soros and “the San Francisco mortgage billionaire Herbert Sandler, the New York real estate heiress Patricia Bauman and the oil heiress Leah Hunt-Hendrix” were “posing an insurgent challenge to some of the left’s most venerable institutions — and the Democratic Party itself.” That news-story linked to “Document: Here’s the Democracy Alliance’s ‘Resistance Map’,” and this ‘Resistance’ turns out to consist of groups which those same billionaires, and other billionaire Democrats, had donated heavily to, and which had supported Hillary Clinton’s Presidential campaigns. It’s now calling itself collectively the ‘Resistance’, in the Democratic Party; but, what it is the ‘resistance’ to, is not made at all clear. The presumption of the story’s writer, and the newspaper’s editors, seems to be that the Party’s voters won’t be sufficiently intelligent to have suspicions about the honesty, of that ‘resistance’, and of that news-report about it. This type of presumption, this trust by the public, has always worked for the aristocracy in the past; but, maybe, someday, it no longer will. Perhaps there is a limit to how many times the public can be fooled, before they start to understand the game.

During the American Revolution, Americans finally came to understand the game, and overthrew and replaced the British aristocracy. Perhaps some day, Americans will overthrow and replace the American aristocracy. But, as of yet, no way is clear as to how that could be done. If it ever happens, it will be the Second American Revolution. However, one thing is very clear: if it ever happens, no American aristocrats will be donating to it, nor assisting the American people in any other way, to gain freedom. The aristocracy are maybe the top .01%, but they control this country, more than the bottom 99.99% do, and won’t relinquish that control voluntarily. And there is no way that it would be able to happen under the rules that they have established for this country. No more would that be the case, than it was the case regarding the First American Revolution. (That’s why it is called a “Revolution.”)

No such ‘Democracy Alliance’ is going to do such a job. It might do a job, but that wouldn’t be the job which is necessary, not even if they’re promising to do that job. Behind the scenes, they’re already committed to not doing the job that needs to be done. But, obviously, some people think that it’s the job that needs to be done, or else the New York Times wouldn’t be positioning this puff-piece as the lead story in their Sunday newspaper, in order to promulgate, to the public, the organization’s propaganda-line, that these people intend to do the job that needs to be done. This free publicity for those billionaires’ effort wouldn’t be donated to that organization if the Times management didn’t think it would help the cause of the people who control the corporation, which is an important propaganda-vehicle for the Democratic Party.

Right now, we’re stuck with a highly unequal-opportunity system, which is getting more unequal-opportunity, instead of less; and (mixing metaphors here) the Republican Party are the bulwark for it, while the Democratic Party plays the ‘good cop’ ‘resistance’, against that ‘bad cop’ bulwark, in this kabuki show, which has been set up by the aristocracy, for the ‘entertainment’ (deception) of the American public.

Because hypocrisy is so essential in order for Democratic aristocrats to be able to control their voters, there is, in the Democratic Party, a far larger separation between the aristocracy and its voters, than is the case in the Republican Party. Whereas, in the Republican Party, there is no progressivism, not even in pretense (since conservatism itself is the opposite), there is substantial progressivism within the Democratic Party’s electorate; and — since none of the aristocracy are progressive — the potential tensions between the electoral base and the money-base are far larger within the Democratic Party, than within the Republican Party. For example: on October 5th, Pew headlined “The Partisan Divide on Political Values Grows Even Wider” and reported that, whereas 71% of Democratic Party voters believe that “Government should do more to help the needy,” only 24% of Republican Party voters do. Obviously, no billionaire supports that position, because doing so would entail that person’s donating everything to a U.S. Presidential campaign and to Congressional campaigns, backing only candidates who honestly do support that position (placing first the interests of the needy, and last the interests of the greedy), which would constitute the Second American Revolution, if it won control. And, likewise obviously, no such Revolution has, as of yet, occurred, which means that there apparently are no billionaires who even want it to occur.

The Counter-Revolution against the American Revolution has succeeded, and it is continuing still further, to succeed even more than it already has. That’s the American reality, today. Neither the Democratic Party, nor the Republican Party, nor any other party that will be funded by the U.S. aristocracy, will admit this fact, no matter how much the data might happen to back it up.

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • WillDippel

    Here is an article that looks at the relationship between wealth and ethnicity/race in the United States:

    http://viableopposition.blogspot.ca/2016/08/the-growing-ethnicracial-wealth-gap.html

    The notable presence of public policies that exacerbate racial and economic inequality and the lack of will by Washington to change the system mean that the ethnic/racial wealth gap is becoming more firmly entrenched in society.

    • cettel

      Thanks, Will. I’ve now added that information to the article, and I credit there your comment as having brought it to my attention.

  • Shiggity

    Unfortunately more and more wealthy parents are turning into Warren Buffets.

    “I started with nothing and made it, so should you.”

    Any argument made on the basis of logic or reason will be ignored. This is nothing more than a selfish cop out, a piece of rhetoric designed for insanely greedy people to rationalize keeping their obscene wealth until the day they die. I’ve honestly heard wealthy individuals quote versions of the divine right of kings…

    There is a big difference between saving money and hoarding money. Americans used to know the difference, I guess they don’t anymore.

  • kimyo

    in your view, should corporations pay taxes? at what rate should they be taxed?

    you’re framing the issue as ‘rich vs. poor’. why would you ignore the role of corporations? many pay no taxes and use those funds to control our political apparatus. an inheritance tax will do nothing to fix this, which by far is the primary factor, oligarchy-wise.

    Bernie Sanders says tax share paid by corporations has fallen from 33% to 9% since 1952

    “Want to better understand why we have a federal deficit? In 1952, the corporate income tax accounted for 33 percent of all federal tax revenue. Today, despite record-breaking profits, corporate taxes bring in less than 9 percent. It’s time for real tax reform.”

    Biggest Corporate Tax Cheats, From General Electric to Google to News Corp.

    As reported Friday, General Electric concluded 2010 with $14.2 billion in profit, for which the Internal Revenue Service is paying them a tax benefit of $3.2 billion, thanks to a shrewd use of U.S. tax loopholes, aggressive lobbying and favorable international tax provisions. They’re far from alone.

    Last year, Google reduced its tax burden by $3.1 billion by altering its tax practices. Boeing hasn’t paid any federal corporate income taxes in the last three years, despite earning $10 billion in domestic pre-tax profit. Pharmaceutical companies Pfizer, Eli Lilly, and Forest Laboratories habitually avoid paying U.S. income taxes by recording profits in a country a world away from where the sales occur. A study released in 2008 by the Government Accountability Office concluded that 57 percent of U.S. companies doing business in the country paid “ no federal income taxes for at least one year between 1998 and 2005.”

    • Eric Zuesse

      Corporations aren’t people, regardless what the Supreme Court says. The rate (%) of taxation should depend upon the beneficiary, the stockholder (an actual person — the individual), not at all upon the corporation (a fictitious ‘person’ that’s only a pass-through — on a collective, NOT an individual, basis — to actual individuals). Otherwise, the commitment to progressivity in taxation-policy is being violated, not actually being expressed (such as Bernie thinks).

      • kimyo

        so you’re fine with untaxed corporate profits being used to purchase influence in washington?

        • Eric Zuesse

          What I think or feel is irrelevant. All that’s relevant is the evidence (in order to determine whether the postulates are or aren’t true), and the reasoning from the evidence (i.e., the argument’s logic: is it 100% logical, or not?).

          • kimyo

            if your analysis is incomplete, your solution is unlikely to rectify matters.

            in this particular case, even if trump signs an executive order tomorrow mandating a 100% inheritance tax, it’ll be 20+ years before we can determine the success of your approach.

            the people who today need to choose between feeding their families and getting them medical care are in their predicament because of corporate control of government. that is where your analysis should start. will your ‘solution’ address this? (answer: highly doubtful, and i’m being kind) bonus question: what are the chances that congress would ever pass such a tax? (a: nil)

          • cettel

            The way to deal with “corporate control of government” is by going after the individuals who control the corporations — and this requires holding those individuals (not ‘the corporation’) legally responsible and susceptible of being imprisoned, and of restituting ‘the corporation’s victims, for the executive and board and controlling-stockholder decisions, the choices by those individuals, that had produced the harms to these victims. The “corporate veil” protects the “respectable” crooks and must therefore be removed, and your objection to my article is irrelevant, and such irrelevancies protect the mega-crooks and are therefore partly to blame for the problem’s continued existence.

          • kimyo

            if you remove every single corporate exec today, what do you think will happen tomorrow?

            each and every seat will be filled with a willing psychopath, ready for his/her turn to prostitute him/herself.

            it’s straight out of ‘grapes of wrath’.

            the most effective approach is to limit corporate power over government. an inheritance tax is a particularly unsuitable and ineffective method of achieving this.

            best way to ‘protect the mega-crooks’: write ten gazillion articles on how voting is a strategic necessity whilst ignoring how completely ineffective it’s been – zeusse votes obama x2, gets dubya both times. zeusse votes trump, gets dubya.

            does he learn? adapt? incorporate new information?

            nah. not his ‘style’. not his ‘thing’.

            grapes of wrath

            “Sure, cried the tenant men,but it’s our land…We were born on it, and we got killed on it, died on it. Even if it’s no good, it’s still ours….That’s what makes ownership, not a paper with numbers on it.”

            “We’re sorry. It’s not us. It’s the monster. The bank isn’t like a man.”

            “Yes, but the bank is only made of men.”

            “No, you’re wrong there—quite wrong there. The bank is something else than men. It happens that every man in a bank hates what the bank does, and yet the bank does it. The bank is something more than men, I tell you. It’s the monster. Men made it, but they can’t control it.

            “The bank – the monster has to have profits all the time. It can’t wait. It’ll die. No, taxes go on. When the monster stops growing, it dies. It can’t stay one size.”

          • cettel

            I didn’t say “remove every single corporate exec.” That’s entirely your imagination. It’s also wildly at variance with what I would ever consider to be a good thing to do. I was speaking about individual accountability for crimes. I wasn’t advocating a lynch-mob, such as you have in mind, but instead democratic accountability, which entails a correctly functioning legal, and justice and penal system. I said “holding those individuals (not ‘the corporation’) legally responsible and susceptible of being imprisoned, and of restituting ‘the corporation’s victims, for the executive and board and controlling-stockholder decisions, the choices by those individuals, that had produced the harms to these victims.”

          • kimyo

            Meme says Hillary Clinton’s top donors are banks and corporations, Bernie Sanders’ are labor unions

            Clinton’s top 10 cumulative donors between between 1999 and 2016 were, in descending order, Citigroup ($782,327), Goldman Sachs ($711,490), DLA Piper ($628,030), JPMorgan Chase ($620,919), EMILY’s List ($605,174) Morgan Stanley ($543,065), Time Warner ($411,296), Skadden Arps ($406,640), Lehman Brothers ($362,853) and Cablevision Systems ($336,288).

            kindly explain how your approach will correct this, the fundamental reason why politicians represent corporate interests and not those of the people.

            or, is this not a problem in your view?

          • cettel

            The individuals there are to blame; the ‘corporation’ does their bidding but the penalized entities need to be those individuals who are to blame (and this includes the executives and the board-members, not merely the stockholders (who often don’t lose anything at all when a corporation they hold stock in gets fined — so the current system is rot even as regards the stockholders).

          • kimyo

            I was speaking about individual accountability for crimes….

            …The way to deal with “corporate control of government” is by going after the individuals who control the corporations…

            …holding those individuals (not ‘the corporation’) legally responsible and susceptible of being imprisoned

            those individuals who instructed their corporations to give millions to clinton broke no law. exactly how/why would they face imprisonment?

          • cettel

            I nowhere was defending the existing laws. I’ve been criticizing them. Try a different straw-man, next time.

          • kimyo

            where did i suggest that you were defending current laws?

            what i was saying is that your grasp of how things work is essentially nil.

            it’s a simple, key question, let’s try again: those individuals who instructed their corporations to give millions to clinton broke no law. exactly how/why would they face imprisonment?

          • cettel

            Rereading your comment, I just noticed its hypocrisy, its arguing against estate-taxation because poor people allegedly will “need to choose between feeding their families and getting them medical care.” A tax that now hits only the top 1% should be abolished in order to protect what — the bottom 20%, the bottom 50%, what? Furthermore, I did not propose that estates smaller than a million dollars become taxed, but only that estates above a million dollars should be taxed at percentage-rates far higher than at present — and I noted that the increase in tax-income to the federal Treasury which would result from that, would reduce the amount of tax-income which the Treasury would need to extract from the non-rich. So: I suggest you offer your argument to the Koch brothers etc., who will be much more welcoming of it, because it supports their view, and their interests.

          • kimyo

            obviously, the poor i’m speaking of are not subject to an estate tax. you are left to falsely portray my words because your argument has no substance.

            the poor need relief today. when will your solution provide same?

            your ‘solution’ (100% estate tax) may shift money away from the 1% (as if they’d let that happen). that may happen over the next 20 or more years as the elder 1% die off (plenty of time for them to arrange alternatives, blind trusts, overseas accounts). it may shift control of corporations away from the 1% (as likely as a clear and lucid three-sentence zuessian paragraph).

            the poor can’t wait to find out if your lame brained scheme will deliver, and they would be correct to suspect that your lame brained scheme will never provide any meaningful relief.

            the problem is corporate control of government. in no way whatsoever does your lame brain scheme resolve this issue. your calls to prosecute the individuals running the corporations will also fail to deliver any meaningful results.

            you clearly don’t understand how this all works. it’s the corporation which promotes the most psychopathic people into power, both on their boards and in our government. remove those and the corporation will simply replace them. that’s how it works. you have it backwards, as usual.

          • nomadd

            Wow. Corporations should be tax exempt?
            What? Like churches?

          • cettel

            Corporations are not people, and only people should be taxed. This also means that corporations should not be penalized nor fined, but instead the criminal persons should be, because corporate harms are perpetrated by people, who should be fined and imprisoned, etc., for their decisions that produced those harms. As regards corporate investors, anyone who paid money to the corporation or to a previous investor in the corporation for stock in it, all such investors’ stock should be accessible to pay any portion of the harms that might happen to exceed the restitution that can be paid by the criminal executives, board members, and employees — all stock should be liable for paying whatever the perpetrators can’t pay.

          • nomadd

            sorry. do not agree with that. did i miss where you stated and supported in the article above (which I admit I only scanned) that only people should be taxed? on what do you base this. i think that any business that benefits from of the infrastructure and access to the american consumer should be taxed.

          • cettel

            “any business that benefits from the infrastructure and access to the american consumer should be taxed”

            Yes, but only to the benefit-holders of the “business,” only to the owners of it — and if one owner is a billionaire, and another is some middle-class or poor person who has some shares of stock of that corporation in his or her 401k or retirement plan or whatever, you want that person to be taxed at the same taxation-percentage-rate as a billionaire is, or as some million-dollar-plus corporate executive is, who has that stock in his or her account? Why? Why are you opposed to progressive taxation?

          • nomadd

            no. i want that corporation to be taxed. the fund should come from the corporation itself independent of the persons who have holdings in it. and given the supreme courts ruling that corporations are persons, they should be taxed at the same rate as any other person.

          • cettel

            So, you want the U.S. Supreme Court to build even more upon the decision that a corporation is a “person”? You want to embed that even further in our legal system?

          • nomadd

            tax them as a corporation. but if you are ruling that they are a person then tax them as a person IN ADDITION to taxing them as a corporation. at least some good would come from a bad ruling.

          • cettel

            That’s a bad ruling (CITIZENS UNITED, 2010) which will lock in the aristocracy as America’s dictatorship. Anything that builds further in the legal system upon it, is entrenching the dictatorship (America’s aristocracy) even further in control than it now is. And, in addition: the taxation of corporate profits as being net income at the corporate level is obliterating progressive taxation to that extent, so that a share that’s owned by a pauper gets hit the same as a share that’s owned by a billionaire, and this diminution of income-tax progressivity is totally unnecessary, because no reason at all justifies taxation of anything but an individual human being. To accept a lie (which is what you are doing here) isn’t merely wrong, it is harmful to the future.

          • nomadd

            tell me what you are basing your assertion that only individuals should be taxed. all the rest of what you’re saying is, as you often say, irrelevant.

            but on that tangent youve offered i contend that if a corporation is ruled a person it should be taxed as a person, it gets entrenched. it hurts people. that would be good in the long run because it would incentivize the populace to change it. i dont think theres anything entrenched that cannot be overturned if a people is motivated. nothing motivates like pain.

          • nomadd

            not opposed to that at all. glad you recommend it. thats even better. but either way, tax the corporation as a separate entity.

          • cettel

            Definitely not!

  • Sara S

    Why the hell should anyone be forced to pay taxes to the corporate military oligarchy that rules over us? Half the US budget already pays for the military to invade, occupy and destroy countless nations all over the world while and trash the environment while this one crumbles. Even if you support taxes in general why should someone who worked thier whole life and payed taxes then have everything they worked for stolen by the government instead of allowing it to be passed on to their children? Who would buy property then? State and Local taxes on property are already criminally exorbitant. On my small house School, local, and state taxes are over $10,000 a year on a house worth around $130,000 located in a lower middle class neighborhood. It was left to me by grandpa upon whose death the Government stole $45,000 from family savings or they would have taken house. It would be much cheaper for me to rent apartment than to live in a home that was supposed to be paid for 55 years ago but I do so because it was his and I would like it to stay in family forever. Seems to me that it should be a pretty obvious, basic right to leave your inheritance to whomever you choose whether it’s a mansion, a farm, a corporation, cash, jewelry or a comic book collection.

    • Windy

      Agree with every thing you said.

    • cettel

      You might as well be saying that there should be no tax when something is sold, as be saying that there should be no tax when something is gifted (as in a person’s will). And when you said “It was left to me by grandpa upon whose death the Government stole $45,000 from family savings or they would have taken house” you ignore the fact that there’s no estate taxation on an estate that’s smaller than a million dollars. On Friday, even Trump’s Treasury Secretary, Goldman Sach’s Steve Mnuchin, reluctantly conceded that repealing the estate tax, as they want to do “disproportionately helps rich people” such as themselves. You evidently think that our system doesn’t already advantage millionaires enough. You evidently want the poor to be even poorer and the rich to be even richer, but aren’t intelligent enough to recognize it. The government didn’t tax your grandfather’s “death” but taxed the transfer of his million-dollar-plus estate while it was being passed along to the people whom he particularly favored. There is no “right” that any person has to transfer any asset to anyone tax-free. Asset-transfers are routinely taxed. You just want gifts not to be taxed, but that’s already the case, except for huge gifts, or, to be more accurate: gifts from huge estates. Your gripe about the existence of estate and gift taxes is stupid, but Treasury Secretary Steve Mnuchin wants there to be more fools like you. When a person is being a sucker in a way that helps the aristocracy rob the public even more than they already are robbing the public, I point that fact out; and so I do in this case. That type of suckerdom doesn’t hurt the sucker; it hurts the public; so, I point it out.

  • The Republicans of course understand how an economy grows. But their special interests have no interest in growing an economy, just taking from it, and their paid puppets — Republicans and DLC Democrats — serve only to serve them.

  • Army of Addicts

    Excellent! You’ve outdone yourself again. Thanks.