Source: Has America Become an Oligarchy?
Spiegel Online, October 28, 2011

Category: Employment, Politics, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

35 Responses to “Has America Become an Oligarchy?”

  1. Through the Looking Glass says:

    Stating the obvious I see. We live in a country where elected officials /politicians are not in charge and don’t call the shots but are the tools of the oligarchs. A society corrupted by greed where elected officials are beholding to those that got them elected to the point of making new laws to accommodate them so no matter how bad the consequences of the olgarchy its all legal.
    So yes the man behind the curtain, the Great OZ , are the Plutocrats and we are the Munchkins.
    You can elect politicians but you cant elect those who run the country. That’s why its so ridiculous to argue republican or democrat.. Wake up ! it doesn’t matter! haven’t you figured that out by now folks? And its certainly not Obama’s fault. A big bag of crap was set on fire on his doorstep and the republicans rang the doorbell . Of course hes going to get some on him when he starts trying to stamp that fire out.
    Its hard to believe those political arguments are conducted by intelligent adults sometimes. Sounds like David Duke and his gang at times.

  2. ToddMPeters says:

    it’s interesting how 1982 and 1983 are the beginning measurement points. Doesn’t that coincide with the beginning of one of the most powerful stock bull markets in history? Of course the wealthiest 1% are going to share a marked increase relative to the bottom 40%. The latter hold a disproportionately lower % of their wealth in stocks.

  3. Moe says:

    ToddMPeters;

    Hi, You are probably correct.

    But, I’m not sure the “how we got to this point?” is of any matter whatsoever. The fact is we are, and if it continues, you can say goodbye to the U.S. as most of us have known it.

    How the Titanic started sinking was of little concern to those onboard in the final hours…

  4. MaxThrax says:

    The oligarchs own the politicians, the political process itself and the media. I can’t see this ending in anything but violence. These people have no empathy and would rather spend billions clamping down on an unruly populace than redistributing those billions to prevent unrest….it’s the scorpion and the frog, it’s their nature.

  5. NoKidding says:

    For the bottom 40 pct, Income went up 7 pct but assets dropped 60 pct.

    Sounds like a fiscal discipline issue. The Bell Curve?

  6. rd says:

    The answer appears to be “yes.”

    Also, see this defintiion of fascism: http://www.merriam-webster.com/dictionary/fascism

    The recent reaction of authorities to the Occupy Whatever movements in cities appears to be tending towards this defintion, especially when paired iwth the oligopoly argument above.

    @ToddMPeters: We have seen most long-term valuation measures of the stock market (Shiller’s CAPE, Tobin’s Q etc.) rise to unprecedented levels over the past 15 years as the top 1% had their policies implemented by the US government and the Federal Reserve to “lock-in” their gains”, at least for the short-term. Hopefully, Corzine’s MF Global bankruptcy is the start of eliminating the assurance that the welathy can never be allowed to fail while the middle-class can be crushed at will.

  7. reedsch says:

    The comparison with Germany is rich indeed.

    From the Tax Foundation: “In 2009, the top 1 percent of tax returns …earned 16.9 percent of adjusted gross income (AGI)”. I submit that if the top 1% can show that they are responsible for creating 16.9% of the US GDP, then their claim on the income would seem to be justifiable. You make the pie, you get to eat a big chunk of it.

    BR, do you know where this significant amount of productivity is taking place? Such prodigious economic output, exceeding any Stalin-era Stakhanovite super-human effort, should not be hard to locate and identify. Let us give credit where credit is due!

    Or are they the first farm at the head of the irrigation ditch, taking the lion’s share of the water? Whoever gets to dip their cup first in the massive revenue streams coming into the modern multinational corporation would enjoy an enviable position indeed.

  8. the pearl says:

    The answer seems obvious, move to Germany.

  9. csainvestor says:

    the answer is- Hell YES!

    Always important to point out in all these charts and graphics on income:
    They are adjusted for inflation- The problem with this is, they don’t use real inflation.

    When you adjust using bogus CPI things look better than they really are for the bottom 80% percent.
    Using real inflation- the bottom 80% has negative income growth.

    This is why assets are negative 63%- because the bottom 80% can’t afford stocks, bonds, real estate, all they can (barely) afford is the rent, food, and then, the medical bill when it comes due will throw them overboard.

  10. Moss says:

    That is the whole point of the trickle down, supply side, ownership society, US exceptional-ism BS.

  11. PeakVT says:

    Plutocracy would be a better term, but the answer is still “yes.”

  12. freejack says:

    How did we get here? Policy.

    American public policy in the 1980s reoriented itself away from a focus on wages and toward a focus on assets.
    (Someone thought the “country” would be better off if more than 6% of the country were ‘capitalists’ who owned the means of production -AKA ‘assets’ – instead of just wage slave prols)

    Pensions were converted to 401K plans, homeownership was incentivized, access to credit was facilitated.

    Low interest rates served the policy. Renters and savers suffered in the low-interest rate environment, while borrowers and asset owners did very well.

    Policy incentivized American companies to export jobs overseas & these corporations saw their stock’s value increase.
    The low priced, foreign-made goods became a policy priority because low-cost goods coming into America were helpful in offsetting the impact of wage stagnation.

    Tax cuts served in offsetting the impact of wage stagnation.

    Eventually, America’s middle class grew as dependent on the value of assets as they had been on wages for a sense of financial well being.

    But in ’08 and the Jenga shitpile of assets collapsed.

    The 1% had their losses socialized.

    The 99% were told to just suck it up.

    So, how this little capitalist experiment working out for the country so far?

  13. rd says:

    @freejack

    The comment about focusing on assets instead of income is interesting.

    As a long-suffering father and husband, I have gotten my fair share of Jane Austen exposure (probably the best of the chick lit). An interesting comment, I believe from Pride and Prejudice, was the notion that somebody was worth 100,o00 pounds per year.

    In a non-inflationary (usually) period based on the gold standard, the concept of wealth was whether or not it was sustainable over the long-term. It didn’t make much difference if you had a lot of assets – if they couldn’t geenrate the income you needed, then you wouldn’t have them for very long.

    It made an impression on me. One of the things I regularly do is look at my retirement savings from the perspective of fairly standard income metrics: interest, dividends, Bengen’s 4% adjusting for inflation payout rule, etc.

    It makes today’s piles of assets look much smaller when you realize that you probably need to be selling some regularly in order to achieve a 4% payout rate because most interest rates and dividends are lower than this! Or the alternative of stretching for yield often pushes you into the arms of otherwise unenticing investments.

  14. stonedwino says:

    Pitchforks! Man the barricades! Guillotines! The Top 1% better wake the fuck up and start demanding change to benefit people other than themselves or they will pay more dearly otherwise…

  15. willid3 says:

    seems like the simple answer is
    yes

  16. stonedwino says:

    the pearl Says:

    “The answer seems obvious, move to Germany.” The grass is not going to stay green there very much longer…

  17. stonedwino says:

    The answer is to demand and fight for change to benefit the 99%. OWS has got it right for sure…

  18. onphylem says:

    See this excellent piece on oligarchy and democracy:

    file:///Users/philshelton/Commentary/Oligarchy%20and%20Democracy%20-%20Jeffrey%20A.%20Winters%20-%20The%20American%20Interest%20Magazine.html

  19. A says:

    Just look at the pathetic payout to the CEO of Nabors Industries: the guy is in his 80′s, doesn’t need the money (is he going to carry it to pay off Satan?) and this is a waste of investor money. Any wonder why CEO pay contributes to the disparities in wealth. Closest thing to organized crime.

  20. onphylem says:

    Sorry about that. Here is the correct link to Oligarchy and Democracy

    http://www.the-american-interest.com/article.cfm?piece=1048

  21. CitizenWhy says:

    What is most significant is ideology:

    Many conservatives now applaud this economic disparity, pointing half are losers and only rich people are productive members of society. These conservatives now control what any Republican is allowed to say, despite what they might really think.

    The other development is the paralysis of liberalism. The northeast states, the liberal heartland, depend on financial services for jobs and tax revenues. All opposition to the New American Plutocracy/Oligarchy must be rhetorical only.

    It needs to be pointed out that most rich people do not want a plutocracy. But with lobbyists from the banks, financial services, energy/oil, and military contractor industries controlling Congress we operate as a plutocracy, despite the will of the people from all financial segments.

  22. Irwin Fletcher says:

    Nope. Not even close. This article is over the top.
    Keep preaching the social justice, redistribution message.

  23. Robespierre says:

    Very easy to explain really. It is obvious to the casual observer that the top %1 of the Germans are a bunch slackers easily outsmart by our best and smartest top 1%. I sure hope that this serves as a wake-up call for the top 1% in Germany!

  24. wunsacon says:

    The US is an empire. The top 1% run a global enterprise, with business, political, and military branches. As a result of the 0-tariff, currency-peg trade agreements, they’ve extended their reach and thus now skim from a larger stream of economic activity.

    Meanwhile, thanks to those same trade agreements, the fall of communism, and globalization, 2 billion Asians now compete with the 300 million American laborers. What happens to the price of an item when you increase supply of it by 10 times?

  25. wunsacon says:

    Consider this thread along with the one about the population doubling from 3 billion to 7 billion. If you think of the social-economic pyramid*, then adding a newer wider base at the foundation will thrust those at the top even higher.

    That’s true especially if the gains are not distributed based on *contribution* but based on *position* (which is very loosely coupled with contribution).

  26. Frilton Miedman says:

    I already see a massive swing in mainstream media, even with Fox (Fix) Network’s Roger Ayles telling his on-air staff to cool off on the extremism, Karl Rove commenting on a few of the GOP candidates going overboard with the right-wing extremism is also very noteworthy.

    We seem to forget, the founder of the progressive movement was a Republican, Teddy Roosevelt, who started the progressive tax and brought the problem of corporate interests influencing politics to the forefront.

    Two years ago if you so much as murmured the word “disparity” around certain circles, you were instantly labeled a “socialist” and chastised relentlessly.

    In the time since, most of those idiots have since shut up as it becomes increasingly obvious that the “socialist” policies they were whining about two years ago are now what could be the difference of their own future welfare.

  27. victor says:

    The plight of those who rely on fixed income is seldom mentioned in the context of the wealth/income disparities in America. Many are retirees who have been practically pauperized within the last two decades. I have an older brother who retired in the Midwest after having sold his small business in the early 90-ies: paid off house and auto’s, children grown up and settled on their own and a cool $500 K in CD’s yielding THEN 8%. He never trusted stocks or bonds (hmmm..), so with unrelenting assaults on his nest egg from several directions (low interest rates, inflation, ever higher taxes, higher gas prices, etc, etc) he now quietly has joined the ranks of the poor. He is bitter and calls the politicians, the super rich and the interest groups “leaches”. For an enlightening list (probably incomplete) of interest groups, see:

    http://www.twyman-whitney.com/americancitizen/links/lobbies.htm

  28. Expat says:

    Were you out of new material? Bored? Seriously. It’s end 2011 and you are still asking that question?

  29. [...] As we have discussed, from 1979 to 2007, inflation-adjusted incomes of the top 1 percent of households increased significantly; Those even better off, the top 0.1 percent (the top one one-thousandth of households), saw their incomes grow 390%. [...]

  30. reedsch says:

    ONPHYLEM WROTE:
    “Here is the correct link to Oligarchy and Democracy:
    http://www.the-american-interest.com/article.cfm?piece=1048

    This article is outstanding. Thanks Mr. Phylem! It appears the jury has returned a verdict.

    BR is a mensch, and the links from reader’s comments are often as worthwhile as the posts themselves.

  31. csainvestor says:

    victor Says,

    good thing he was in cd’s- they probably outperformed the market from the late 90′s to today.

  32. reedsch says:

    Irwin Fletcher Says:
    “Keep preaching the social justice, redistribution message.”

    BR, you’ve just been called a Communist!

    Make no mistake Mr. Fletcher, the preponderance of evidence, nay, even the clear and convincing evidence, is that wealth redistribution is and has been taking place on a massive scale. But the primary direction is upwards. “Redistribution” has become a Repub codeword for handout to the undeserving. I repeat my earlier challenge: show me where the top 1% create 16.7% of the US GDP., lest the charge of undeserving be laid at their own feet.

  33. robot1370@bellsouth.net says:

    It certainly does matter what time period you pick. You can skew results by selective timeframes. It matters how the 1% use their wealth and how they got it. Steve Jobs is one of the 1%, is this because he was one of the chosen elite? I doubt it. Wasn’t buying an ipod/iphone/ipad a choice? When people bought these things rather than saving and investing, whose fault was it? Are the 1% today the same people as in 1983 or were new people added and other people dropped down? When you start with the biggest boom, and end with the biggest bust, I’m quite sure that will have an effect. Where is the year by year data?

    I’m not sure the “how we got to this point?” is of any matter whatsoever…It certainly matters how we got here. Those who do not learn from history are doomed to repeat it.

    Also, if we do not know how we got here, we do not know how to reverse it. Those here seem to be claiming that a few run this country. Who are they?

    If this presumption is true, why is everyone complaining about the tea party caucus? They are the only ones who seem to be fighting for a representative government again.

  34. victor says:

    @reedsch: “I repeat my earlier challenge: show me where the top 1% create 16.7% of the US GDP., lest the charge of undeserving be laid at their own feet”.

    Here’s a start, I won’t do it for you though:

    GDP=C+I+G+(X-M); C (private consumption), the largest component is about 70%. Go to various Government sites (Bureau of Labor Statistics, US Census Bureau, etc) and find out private consumption % for various income groups. Multiply that % by 0.7 or close to it; then add to it the contribution of the 1% (rich) to the “G” (gov. spending ex transfers) via taxes paid (exclude the interest for simplicity), then add what ever you think is OK to add for the 1%’ rs contribution to “I” (gross investment) and to the trade deficit (X-M). Paradoxically, US enjoys a vigorous trade SURPLUS in services (thwarted of course by the deficit in goods) and among the services, FINANCIAL services are pre-eminent. And NO!!! I am not a shill for Wall Street, au contraire. And I do not belong to the rarefied space of the 1% rich and pretty people, though I wished I did….And YES, many of the 1% are undeserving, we know who they are and Mike Mayo has some pretty good ideas how to rein them in.