A Government Captured by Corporations and the Wealthy

US Capitol with Sale Sign

The Republican tax bill passed the Senate Budget Committee on Tuesday along straight party lines.  The legislation now goes to the full Senate.  It is one of the most disastrous pieces of legislation ever to be introduced in Congress, and yet it looks increasingly likely to pass the Congress and be signed into law.

The bill contains huge tax breaks for corporations and wealthy individuals while it hammers the poor and middle class.  Instead of stimulating economic growth, as Republicans claim, it is much more likely to hurt the economy over the longer term by exacerbating income inequality.

How did we get to this place where legislation of such immense importance and negative effect now seems likely to pass the Congress along straight party lines?

Well, you can blame Republicans and Democrats alike who have so contorted the budget process as to allow major legislations to pass on party line votes, instead of the 60 votes needed to ensure bipartisan support.

Or, you can blame the corporate media which is busy “reporting” on Donald Trump’s latest tweets – and totally out of its depth on most complex issues including taxation and the economy.

You can even blame the Democratic Party establishment which is mostly content to simply oppose Donald Trump rather than advance a coherent policy agenda of its own.

But if we are going to play the blame game, let’s get to the root cause: big money, mainly corporations, have so completely “Captured” the U.S. Government and they are now advancing legislation that clearly benefits them at the expense of the American middle class and the U.S. economy as a whole.

How do they do it: well, for one thing, they take advantage of court rulings such as Citizens United, and a lack of public disclosure requirements, thanks to Republican opposition in Congress, that allow corporations and wealthy individuals to operate out of public view while spending huge sums to lobby the government and influence elections.

Perhaps we should heed the words of Jeremy Grantham, a British born financier from Boston.  Grantham is a bit of a legend in financial circles, having predicated the last two financial bubbles in 2000 and 2007.  Here is Grantham quoted November 6, 2017 on the editorial pages of the Wall Street Journal:

“The U.S. form of capitalism has lost it way.  The social contract was previously in good shape.  Corporations looked after their employees.  They were more paternalistic.  Great pension funds were starting up.  The CEOs were increasing income alongside their workers.  CEOs earned more than 40 times workers.  Today that number is 350 times, and the system has gone to hell.  Keynes, Schumpeter – and Marx not to mention—thought, by their nature, corporations and capitalism would overreach simply because they could.  Corporations would use their advantages to get more power and more money.  Their share of the pie would increase, and cause society to push back.  Sooner or later there will be pushback.”

Well said, Jeremy.  But the time for “pushback” is not sooner. It is certainly not later.  It is now.

Oh when, oh when, will it ever end

Arise and fight!

Ever hopeful

God save our Nation once again


The Gorsuch Confirmation, Polarization and the Hollowing of the American Middle Class

The tragedy of the Gorsuch nomination is not that he is a conservative, an “originalist” who believes in a literal interpretation of the Constitution, although that will certainly add to the polarization in American politics.

The bigger tragedy is that Republicans employed the “nuclear option.”  Led by Senate Majority Leader Mitch McConnell of Kentucky, the Senate voted along party lines to repeal a long-standing rule that required a 60-vote super-majority to confirm a Supreme Court nominee.  The rule was designed to ensure that nominees to the highest court in the land have bi-partisan support between the two major political parties.  Sadly, that has come to an end.

It is just the most recent example of how polarized and dysfunctional U.S politics has become.  Why? Two reasons stand out:

  • Excessive money in politics, and
  • Economic stagnation and the hollowing of the American middle class.

A tsunami of money has flooded U.S. politics in recent years.  It has been enabled by the U.S. Supreme Court’s Citizens’ United ruling in 2010 that money is effectively the equivalent of free speech – and limits on political contributions are an unconstitutional infringement on that speech.  Today, there is so much money in politics that it has created an oppositional culture in which negative advertising and attack ads, rather than constructive dialogue, are increasingly the norm.

At the same time, also in response to Citizens United, legions of corporate lobbyists are flooding Capitol Hill and executive agencies.  Many are former elected and appointed officials “double dipping” on government pensions and benefits.  In seeking to curry favor on issues such as tax and regulatory policy, they are promoting narrow interests frequently at odds with what is best for the country as a whole and the American middle class.

The rise of social media has added to the polarization, encouraging people to communicate almost exclusively with others who think as they do.  The mainstream media continues to focus primarily on the back-and-forth of daily politics – largely ignoring the bigger picture – the reasons why politics in the U.S. have become so dysfunctional.

Meanwhile, on the economic front, growth has slowed, good paying middle class jobs are increasingly scarce, wages have stagnated for decades, and working people are finding it increasingly difficult to make ends meet.

What does all this portend? It is not just the economy that is bad shape; American democracy itself is in peril – and we, as citizens, need to take action.

Exactly what action to take is not entirely clear.  It is not easy to take back a government that corporations have “Captured”, as Senator Sheldon Whitehouse put in his book of the same name.  Nor is it easy to restore the economy so it works for everyone, not just corporate interests bent on paying as little as possible in taxes while promoting their narrow interests.

But how about this for a start – let’s vote out of office those who use social media to distract people’s attention while they advocate almost exclusively for more tax breaks for the rich, or others who absolutely refuse to engage in constructive, bi-partisan dialogue.

Donald Trump and Mitch McConnell – see you at election time.