The Gilded Age of American Cleptocracy
We are in flux. As a nation, we are transitioning from the unqualified leading economic force on the planet to a nation living beyond its means, past its prime, giving way to a new global pecking order. Many reports predict the leaders of the new global order to include China and India leading the way for Asia as well as with Brazil and Russia. Together, these nations are predicted to match the original G7 GDP.
The post-WWII consolidation of the publicly subsidized military technology cycle begot both the greatest economic surge in human history and the fastest concentration of wealth. The world that our parents grew up in, in which American-Soviet relations defined our identity and which resulted in the complete militarization of the planet and the atmosphere, has left in its wake an economic system struggling to realign itself. Forces at the heart of the political system have long since combined the aims of national security with Wall Street profitability to a detrimental effect for the majority of Americans. There is no change in sight.
1945 saw the peak tax rate of the highest income earners at 66.4% and it has since been on the decline. And as expected, this high tax rate fell in relation to our national debt. That is, until 1981, and the advent of “Reaganomics” when the word “trillion” found its way into the national discourse.
Compared with the 1950’s, as a percentage of total federal tax revenue, corporate taxes generated about 27%, with income tax and payroll taxes reeling in 39% and 11% respectively. Income tax figures have remained relatively stable over this time, but payroll taxes have steadily filled in the gap left by the ever-dwindling corporate tax, with a sharp, reciprocal curve over the past 8 years. This leaves corporate taxes at their lowest contribution to federal revenues (less than 10%) and, consequently, payroll taxes at their highest contribution level in US history (over 40%).
What is most disconcerting is the concentration of wealth over the last decade: from 2001-2011. This period demonstrates a ludicrous concentration of wealth for the top-earning 1% of Americans (about 300,000 people or approximately 75K families). The same period shows the other 90% of Americans with steady or decreasing real income compared to inflation.
It’s no mystery that our involvement in two public wars overseas has much to do with this vast accumulation of wealth, and it’s also not a surprise that the catalyst for these wars and the subsequent attack of civil liberties directly resulted from the terrorist attacks of September 11, 2001. (Damn, I’m starting to sound like Guliani.)
What may come as a surprise is the sheer audacity of the cleptocracy–both civil and governmental as well as in the shifting boundaries between the private and public spheres. The engines of political campaigns are becoming perpetual motion machines. Their messages confining the boundaries of political thought–defining acceptable discourse. These refinements of message represent a sharpening of control over public opinion. As chart after chart demonstrates, the trend is undeniable in real terms, in inflation-adjusted terms, in terms of happiness and quality of life indices, and just about every conceivable metric, the rich are getting exceedingly rich at the expense of the rest of the population.
Knowing this, it’s easy to understand class resentment, I mean how many Bugattis does one guy need to own? How many mansions is too many? And it’s right at this point that it surfaces: I can’t blame these people for being good at playing the game–or being born into a platinum palace. Everyone plays as hard and smart as they can. Everyone takes their opportunity. Everyone has a price. Who says I wouldn’t want one beater Maserati for the weekdays and a nice one for the weekends? My imagination can’t even grasp the kind of wealth that’s being leveraged at this moment. But it’s being wielded by an increasingly shrinking population. The problem is that the financial parasites on Wall Street don’t care if they kill the host. It makes for a short life-cycle of both the host and the parasite–unless that parasite makes Croesus look like a person of walmart. In which case it will turn the host into a food machine–it farms us. We are their chattel.
Consider what Mother Jones contributor, Andy Kroll unearthed in his rather concise article on income inequality:
…the number of Americans earning a steady income declined by 4.5 million between 2008 and 2009, and the average wage in the US dipped by 1.2%, to $39,055. On the other hand, the average wage among Americans earning more than $50 million per year was $91 million in 2008 and $84 million in 2009.
My emphasis. I chalk it up to my rather modest upbringing that this is one of those statistics that takes some real concentration to grasp. It seems common sense that the average wage among Americans earning more than $50 million per year would be about $51 or $52 million per year, but no. Not even close. The average wage of those earning more than $50 million/year was $91 million in ’08 and $84 million in ’09. That bears repeating because it is so vastly outside the realm of any scale most people are familiar with.
What are these people doing that’s so profitable?