Corruption and Capital in American Politics
July 14, 2020: I’m now publishing this decade-old piece I wrote because it should alarm us that its message is still relevant — our political economy is a crime. By the way, among the power elite, Trump fits in well — he’s just a less polite gangster. (BTW the reference to “disease” was written a decade ago.)
Written: April 24, 2011
How bad is the economy?
· The economy is so bad, I saw the CEO of Wal-Mart shopping at Wal-Mart.
· The economy is so bad, I went to my bank the other day and the teller handed me a note saying, “This is a robbery!”
So what does crime have to do with the economy? It does not start with immorality or greed. The problem is not that there are too many criminals on Wall Street. The crime infestation of our government and corporations is not due to some recently spreading disease. Our economic troubles are not due to immorality. The problem is that our economy is itself a crime.
Let me offer some background. Let’s zoom out and talk about our social system.
Last February, Wisconsin’s Governor Scott Walker tried to eliminate the ability of state, county and municipal employees to collectively bargain with their bosses over, among other things, sick days, seniority rights, transfer and promotion rights, pension benefits, health and safety, and work rules(1). The response was a working class rebellion, including mass protest rallies. One day in late February, over 100,000 protesters challenged the Governor’s plan to crush public sector unions(2). Protest messages included “Save our State,” and “General Strike Now,” and hundreds of students flooding downtown Madison chanting, “kill this bill” and handing out valentines that read, “Have a heart, don’t tear the UW apart”(3), referring to the University of Wisconsin. The Madison school district cancelled classes one day because so many teachers called in sick(4). A state survey found both Republican and Democratic union households turning against the Governor(5). A national survey at the time found 6 in 10 Americans favoring public sector union rights(2). A few days ago in a national survey, 39% of Americans thought the economy was getting worse, and almost three quarters approved of ending tax cuts for the rich, and majorities favored federal government health care for the elderly and poor(6). Sociologists have a term for this: class conflict, the sometimes invisible war between workers and their employers, between the majority with little power and the few who dominate.
You may ask; “what do clever students, angry unionists, and grumpy citizens have to do with corruption and capital?” The answer is that what these regular folks express are mad about, whether they know it or not is the corruption built into our economic and political systems.
Our economic and political problems are due to a society-wide theft, a giant sucking sound caused by money flowing upward to the rich. This crime makes Bernie Madoff look like a kid selling lemonade by the side of the road. Our government and corporations together have been sucking money from the middle and poor class to the rich at a higher rate than most other rich nations. The top one hundredth of one percent of family incomes is about $27 million, and the bottom ninety percent of family incomes are about $31,000(7). The top 80% of Americans now lose about $700 billion a year due to slow wage growth, and the top 1% gains almost $700 billion(7). That means that the money the middle and working class has been losing is making the rich super-rich.
Home foreclosures are up, Americans are drowning in debt, jobs are less secure, personal bankruptcies have soared. Our economic troubles are not due to a few greedy traders, or to spending too much on human needs. Our economy is in freefall because having the government help the rich squeeze everyone dry is unsustainable. There is no law against such a policy, but it is a crime.
Not only is our social system criminal, but it also promotes criminality. The 2008 financial meltdown is primarily due to the removal of government economic regulation over the past 3 decades.
Our economic troubles are not due to scarcity. We are not running out of resources. For example, our factories and farms often hold back production. Because our economy impoverishes so many people, corporations build up more productive capacity than the population’s ability to consume(10). In 2002, industrial use of production facilities was at about three quarters, the lowest level since 1983(11).
“…before the [2008] Great Recession began, there was a huge overcapacity in many sectors — in the U.S. and the world. For example, there was the capacity to produce about 30 percent more automobiles in the US and the world than were being purchased”(12).
Our government takes very little out of our economy. Government spending is not the cause of our economic stagnation. For example, fifteen percent of U.S. economic output will be taken as revenue by the federal government this year. The last time the portion was that small was 1950(9).
The upshot: most explanations we hear about why our economy is an unjust mess and common explanations for financial crime are nonsense. Our political economy is designed to do what it does: make the rich richer and send the poor to prison.
References
1. Ricca J. Wisconsin State AFL-CIO — Union-Busting “Budget Repair Bill” Summary [Internet]. [date unknown];[cited 2011 Apr 24] Available from: http://www.wisaflcio.org/index.cfm?action=article&articleID=1e1ba65f-97aa-42f6-955a-3a4a7723cf88
2. Bybee R. Wisconsin’s Key Task: Spreading Spirit of Madison Beyond Capital | Common Dreams [Internet]. 2011;[cited 2011 Apr 24] Available from: http://www.commondreams.org/headline/2011/03/02
3. Jerving S. Wisconsin Students Protest Governor’s Attack on Unions | The Nation [Internet]. The Nation 2011;[cited 2011 Apr 24] Available from: http://www.thenation.com/blog/158597/wisconsin-students-protest-governors-attack-unions
4. Timeline of events surrounding protests against Gov. Scott Walker’s bill | Wausau Daily Herald | wausaudailyherald.com [Internet]. 2011;[cited 2011 Apr 24] Available from: http://www.wausaudailyherald.com/article/20110219/WDH0101/102190565/Timeline-events-surrounding-protests-against-Gov-Scott-Walker-s-bill
5. Jensen T. Do over? [Internet]. Public Policy Polling 2011;[cited 2011 Apr 24] Available from: http://publicpolicypolling.blogspot.com/2011/02/do-over.html
6. Rutenberg J, Thee-brenan M. Nation’s Mood at Lowest Level in Two Years, Poll Shows [Internet]. The New York Times 2011;[cited 2011 Apr 24] Available from: http://www.nytimes.com/2011/04/22/us/22poll.html?scp=1&sq=new%20poll%20darkening%20&st=cse
7. Drum K. Plutocracy Now: What Wisconsin Is Really About | Mother Jones. Mother Jones 2011;36(2):22–29, 63.[cited 2011 Apr 24 ]
8. Harper’s Index. Harper’s Magazine 2011;322(1932):15.[cited 2011 Apr 26 ]
9. Bello W. The Global Collapse: a Non-orthodox View [Internet]. MRZine 2009;[cited 2011 Apr 26] Available from: http://mrzine.monthlyreview.org/2009/bello200209.html
10. Magdoff F. The Great Recession and Its Aftermath: Causes vs. Symptoms [Internet]. MRZine 2011;[cited 2011 Apr 26] Available from: http://mrzine.monthlyreview.org/2011/magdoff060211.html
