The large weight of this outlandish asymmetry of wealth and power is pulling the country into disorder.
The U.S. Constitution does not resolve a little elite owning most of the country’s personal wealth and using a sliver of that wealth to affect the federal government so their wealth and political power boost in a self-reinforcing feedback: as a result of their campaign contributions and lobbying, the elites’ wealth continues broadening, improving their political power to further expand their wealth, and so on.
This financial and political supremacy is therefore perfectly legal. As Bastiat’s popular quote puts it: : When plunder ends up being a way of living for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a values that glorifies it.”
This legalized looting has actually now reached such ridiculous extremes that kleptocracy no longer does justice as a descriptor of the U.S. Consider this excerpt from Monopoly Versus Democracy (Foreign Affairs):
Like their forefathers in the early twentieth century, today’s Americans have experienced years of growing inequality and increasing concentrations of wealth and power. The last years alone experienced nearly 500,000 corporate mergers worldwide. 10 percent of Americans now control 97 percent of all capital earnings in the nation. Almost half of the new earnings produced since the international financial crisis of 2008 has actually gone to the most affluent one percent of U.S. citizens. The wealthiest three Americans jointly have more wealth than the poorest 160 million Americans. (emphasis included.)
If you check out that 3 kleptocrats held more wealth than half the residents of Lower Slobovia, that the leading 0.1% own more wealth than the bottom 80% and that a near-zero 3% of all income flowing from capital trickled down to the bottom 90%, what would you think about wealth/power asymmetry in Lower Slobovia?
We now understand what American Exceptionalism really means: incredibly kleptocratic. Even as private wealth soared to unmatched heights in the previous years of Federal Reserve largesse (limitless trillions for investors and too-big-to-jail speculators), the percentage of stocks owned by the fortunate class of the 90% to 99% fell from 39% to 35% and the percentage owned by the bottom 50% slipped to 0.6%. (Data from the Federal Reserve’s FRED database)
Now there are rumblings in Washington D.C. about closing tax loopholes for corporations, which scoop 15% of the country’s GDP as revenues. This is definitely very pretty political theater, but please let me know when you and I can lease a post workplace box in Ireland and pay no federal earnings taxes, while corporations are paying the overall federal tax rates we pay (40+%) with 15.3% self-employment tax, 3.9% supplemental Medicare tax, etc.
. The sheer weight of this over-the-top asymmetry of wealth and power is pulling the nation into disorder. There are no legal or political limitations on private wealth and political power, and the politicians that depend on the wealthy to fund their re-election projects have demonstrably little interest in harming the geese that lay their golden eggs.
The super-wealthy and Corporate America reckon that they can suppress any resistance to their dominance with virtue-signaling and political suppression, however they should have flunked history: when the bottom 90% own successfully no income-producing capital and no political voice, and even the top 9.9% do not really have any real political power, then condition of the unmanageable range emerges to rebalance the extreme asymmetry.
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