Read This: Robert Reich, “The rich get richer, then buy elections” (updated)

Robert Reich has a powerful piece in this Sunday’s San Francisco Chronicle on what he terms a “perfect storm” that is threatening democracy in America. It should be required reading.

Reich is a professor of public policy at the University of California at Berkeley – but he’s also a former US secretary of labor, so it’s not so easy to dismiss him as another looney Berkeley lefty or an ivory tower intellectual.

So maybe people will actually pay attention to the alarm call he issues at the end of the article:

We’re losing our democracy to a different system. It’s called plutocracy.

The headline positions this article as about the increasing influence of the wealthy over the US electoral process – a very pressing topic in this election season, when you have some many extremely wealthy individuals trying to use that wealth to buy their way into high office.  It’s a real problem in California, where two tech sector businesswoman are trying to step straight from Silicon Valley into the halls of power: Carly Fiorina, former head of computer maker Hp, running for congress against Barbara Boxer; and Meg Whitman, former CEO of eBay, as Republican candidate for governor of California.

One of Reich’s key concerns is with the increasing lack of transparency and openness in campaign financing:

Hundreds of millions of dollars are pouring into advertisements for and against candidates – without a trace of where the dollars are coming from. They’re laundered through a handful of groups. Fred Malek, whom you might remember as deputy director of Richard Nixon’s notorious Committee to Reelect the President (dubbed “Creep” in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce is a third.

The Supreme Court’s decision in Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm election, 97 percent disclosed….

We’re back to the late 19th century, when lackeys of robber barons literally deposited cash on the desks of friendly legislators. The public never knew who was bribing whom.

But while the influence of wealth on the political process is a key concern of Reich’s, the facts and figures he lays out in the article speak to a larger notion of plutocracy and to a fundamental shift in American socity:

income in America is now more concentrated in fewer hands than it has been in 80 years

The top one-tenth of 1 percent of Americans now earn as much as the bottom 120 million of us.

The marginal income tax rate on the very rich is the lowest it has been in 80 years. Under President Dwight Eisenhower (whom no one would have accused of being a radical) it was 91 percent. Now it’s 36 percent…. Much of the income of the highest earners is treated as capital gains, anyway – subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modes. The top 15 hedge-fund managers earned an average of $1 billion.

We have to pause there to consider that: an average of $1 billion in annual income.  What is the average annual income of everyone you know? For that matter, what is the COMBINED income of everyone you know? Now, how many times would you have to multiply that to get to $1 billion?

Or what about that 17 percent tax – how much income tax did you pay last year? Those billionaires pay much less in income tax than you do – and these are the guys (almost always male) who gave us the global financial crisis.

But don’t misunderstand me – I’m not saying you paid too much, but rather that they paid too little.  I don’t like some of the things the government does with my tax dollars – but then I take the bus, or go to the library or a park, or use my public school education and I remember what other things taxes get used for. And then I look at how bad the public transit and public schools and public parks and public hospitals are getting and I worry.  Unlike those hedge-fund managers, I can’t afford private health care, private schools, private parks, and even private transit is perilous these days.

And as he points out, all this enormous shift in the distribution of wealth and massive increase in wealth at the top is coming at a time when “[most] Americans are in trouble. Their jobs, incomes, savings and even homes are on the line.”

You can check out what else Reich has to say on his blog at His book, Aftershock: The Next Economy and America’s Future, is currently riding high on nonfiction bestseller lists.

A footnote: It’s not strictly true that no one would have accused Eisenhower of being a radical. In a recent New Yorker article on Glenn Beck and the Tea Party movement, the founder of the right wing John Birch Society is quoted attacking President Dwight D. Eisenhower as “a dedicated, conscious agent of the Communist conspiracy” who had been serving the plot “all of his adult life.” See: Glenn Beck, the Tea Party, and the Republicans : The New Yorker.


Persuant to Reich’s concern with stealth campaign funding:

Pro-Republican Groups Prepare Big Push at End of Races: “Anonymously financed groups are starting a coordinated final push to deliver control of Congress to Republicans.” (via NYTimes.)

Rove keeps on spinning to defend the secret donations to his GOP slush funds: “Media Matters – Oct. 24 (News Analysis) – On CBS’ Face the Nation, Karl Rove continued to defend his GOP-aligned political group from criticism that it does not disclose its donors by using falsehoods and obfuscation.” (via NewsTrust.)

Media Debates Anonymous Donors, Ignores Deceptive Ads: “ – By Aaron Pendell – Oct. 24 (News Analysis) – The secret financing of thousands of television ads and other media by the U.S. Chamber of Commerce, Karl Rove’s Crossroads GPS, and other 501(c)(4) PACs will be debated long after Nov. 2 has come and gone, but there is a related matter of supreme and immediate importance that is going largely unnoticed: The content of the ads range from deceptive to objectively false.” (via NewsTrust.)




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