Poisonous Plutocracy Pushes Economic Inequality

The biggest political issue receiving no attention by the Democratic and Republican presidential candidates is the powerful plutocracy that has captured the government to produce rising economic inequality.

Both major parties have enabled, promoted and supported this Upper Class plutocracy. Myriad federal policies make the rich super-rich and the powerful dominant in both good and bad economic times. Meanwhile, despite elections, the middle class sinks into one big Lower Class as the plutocracy ensures that national prosperity is unshared.

Why no attention? Why no explicit reference to a plutocracy that makes a mockery of American democracy? Simple answer: because both major parties and their candidates are subservient to numerous corporate and other special interests that use their money and influence to ensure that their elitist priorities prevail. Make no mistake. Barack Obama with all his slick rhetoric is just as much a supporter and benefactor of this Upper Class plutocracy as Hillary Clinton and John McCain.

Everyone that is not in the Upper Class who votes for any of these presidential candidates is voting against their own interests. They have been hoodwinked, conned, brainwashed and manipulated by campaign propaganda. They elect people for the visible government while they remain oblivious to the secret government — the powerful pulling the strings behind the stage. Money makes more money, financing more political influence.

One of the biggest delusions of Americans is that if they retain their constitutional rights that they still live in a country with a working democracy. Wrong. American democracy is delusional because the two-party plutocracy makes citizens economic slaves. This represses political dissent. It is 21st century tyranny. Two-party presidential candidates, unlike our nation’s Founders, lack courage to fight and revolt against domestic tyranny. Placebo voting distracts citizens from the political necessity of fighting the plutocracy.

Economic data show the plutocracy’s assault on American society. Consider these examples.

The top 20 percent of households earned more, after taxes, than the remaining 80 percent in 2005, while the topmost 1 percent took home more than the bottom 40 percent.

No American state has seen the gap between rich and poor widen faster than Connecticut. From 1987 through 2006, the top fifth of the state’s households saw their incomes increase by 44.8 percent, after inflation. Incomes for the bottom fifth fell 17.4 percent. On the other coast, just three of every 1,000 Californians in 2005 reported at least $1 million in income. But they got $213 of every $1,000 Californians earned in 2005 income. The state’s top 1 percent — average income $1.6 million — pay 7.1 percent of their incomes in income, sales, property, and gas taxes. The poorest fifth of California households pay 11.7 percent.

Real hourly wages for most workers have risen only 1 percent since 1979, even as those workers’ productivity has increased by 60 percent. Higher efficiency has rewarded business executives, owners and investors, but not workers. What’s more, American workers now work more hours per year than their counterparts in virtually every other advanced economy, even Japan, and without universal health care.

A typical hedge fund manager makes 31 times more in one hour than the typical American family makes in a year. In 2007, the top 50 hedge fund income-earners collected $29 billion — an average of $581 million each. John Paulson took home $3.7 billion from his hedge fund labors. These figures do not count profits from selling shares in their companies. Importantly, hedge fund players contributed nine times more to the Senate Democratic fundraising arm than they gave to Senate Republicans in 2007.

In 2009, Americans who make over $1 million a year will save an average $32,000 from the Bush tax cuts on capital gains and dividends. The average American household will save $20.

Between 1986 and 2005, the income of America’s top 1 percent of taxpayer jumped from 11.3 to 21.2 percent of the national total. Their federal income taxes dropped from 33.13 percent of total personal income in 1986 to 23.13 percent in 2005. From 2001 to 2008, the net worth of the wealthiest 1 percent grew from $186 billion to $816 billion.

Economic inequality and injustice reflect a political disaster, even with regular elections. It has resulted from government decisions on tax cuts, spending, trade agreements, deregulatory measures, labor unions, corporate handouts, and regulatory enforcement. All crafted to benefit the rich and powerful and leave the rest of us behind. It has happened under Democratic and Republican presidencies and congresses. Bipartisan domestic tyranny propels greed driven plutocracy.

What do we desperately need? A national discussion and referendum on inequality-pumping plutocracy, that none of the major presidential candidates shows any interest in having. Certainly not Barack Obama with his vacuous talk of change (but not about the political system) and John McCain’s incredulous talk of reform.

And it is delusional to think that populist global Internet connectivity producing what is called personal sovereignty threatens plutocracy. Networking among the rich and powerful strengthens the global plutocracy, placing it above national sovereignty. More than produce an army of revolutionaries to overturn the system, the Internet has fragmented every imaginable movement. Individuals indulge themselves with their own or social websites or fall victim to conventional politicians. Technology and media owned and controlled by plutocrats serves them while it shackles and deceives the multitudes.

Only one presidential candidate sees our core national problem and the need for revolutionary thinking and action to correct the system: Ralph Nader who said recently, “We need a Jeffersonian revolution.” Plutocrats should heed these wise words of John F. Kennedy: “Those who make peaceful revolution impossible will make violent revolution inevitable.” With all the guns and pain Americans have, the ruling class should worry and start reforms. To start, let third party and independent candidates into televised presidential debates. If the stage can be filled with a bunch of primary season candidates, why not more than two in the general election?

For electoral dissent, stop being a presidential romantic; use your vote to fight the plutocracy. Reject the Democratic and Republican presidential candidates. Put an end to serial disappointments. Time is running out. Talk is cheap. Action is crucial. Violent revolution is an option.

Joel S. Hirschhorn was a full professor at the University of Wisconsin, Madison and a senior official at the Congressional Office of Technology Assessment and the National Governors Association; he has authored five nonfiction books, including Delusional Democracy: Fixing the Republic Without Overthrowing the Government. Read other articles by Joel.

9 comments on this article so far ...

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  1. bigbadwolf said on May 29th, 2008 at 10:15am #

    The “typical” hedge fund manager making 31 times more in one hour than a typical American family does in a year is not really so typical. There are thousands of hedge fund managers, many of whom have to keep body and soul together on less than a paltry $2m a year. I don’t know how they manage to clothe and feed themselves simultaneously.

  2. Erik Rose said on May 29th, 2008 at 11:46am #

    If any of the “Founding Fathers” were around today, the shooting would have started six years ago.

    Where are the shooters?

  3. steve conn said on May 29th, 2008 at 2:50pm #

    Of course income inequality is the issue. The state of Alaska is the single state which has actually shown a reduction between the top twenty and bottom twenty- including a rural and impoverished indigenous population. How? Distribution to every man, woman and child of a
    yearly check reflective of oil profits over the past five years. The Permanent Fund is attacked by the elite but persists. Only Ralph Nader appreciates this.

  4. Edwin Pell said on May 30th, 2008 at 10:52am #

    Erik the shooters are hunted down and dealt with by the numerous government agencies that protect the government. They are dealt with before they can organize and act. They also do not hang out on the internet where ALL emails (and posts like this) are read by the NSA, DHS, and others. The federal budget is 3000 billion dollars per year. Let’s assume that 5% is used to spy on, and deal with, “rebels” that is 150 billion dollars per year. What is the budget of your supposed “shooters”?

  5. Erik Rose said on May 30th, 2008 at 4:21pm #

    Mr. Pell, one round of .308 Winchester ammunition cost $0.85. That 85 cents could change the world if used in the right way. That is my budget!

    Happy Hunting!

  6. hp said on May 30th, 2008 at 9:00pm #

    Opening day of deer season in Pennsylvania, there are one million men and women in those woods with high powered weapons. A million!
    Granted, Pennsylvania is exceptional, but it’s still just one state. Food for thought..

  7. XavierOnassis(SaveYourOwn...) said on June 1st, 2008 at 8:25am #

    the human species will rid itself of the worst idea ever “ideated” – the diabolically stupid, geno-sadistic, extremely unjust idea to allow unlimited personal fortunes to be withdrawn from the pool of wealth which is FINITE and is created only by work – by sacrifice of time and effort to working, which amount of sacrifice is necessarily and inarguably limited by nature for every individual – OR we will succumb to the results of having the next and the next and the next wealthpower giants, ad infinitum.

    the rich get richer and the poor get poorer means the rich are getting more and more and more for a unit of work while the poor are getting less and less and less per unit of work.

    overpay has nowhere to come from but from underpay, and there is no justification for unequal pay for equal sacrifice.

    it is not POSSIBLE for anyone to sacrifice a thousand times a million more time and effort to contributing to the pool of wealth than your average working family does.

    yet we continue the millions starving to starve whilst we watch billionaires walk around in plain sight.

    this is global insanity.

    there is a reason the Golden Rule appears in every religion. the Golden Rule is not feel-good advice, it is ECONOMIC REALPOLITIK, it is stronger than strong, it is all about justice, and it is designed to make us happy and safe if we will but follow it and stop being soft on injustice.

    this species condones, approves, defends, applauds the economic game of all-grab-all-grab-off-grab-back, instead of calculating what constitutes fairpay fairshare.

    if people would start to act in accord with what we really all believe, every working person including students and homemakers would be receiving US $40 an hour.

    that is how much they are sacrificing their time and efforts to produce. that is how much working people are self-earning.

    every family on the globe would be getting around US $200,000 per year if people were functioning on the reality principle of taking out of the pool of wealth just what you contributed, no more and no less.

    we stand on the brink of either a golden age of the greatest escalation of human happiness ever available to us, or the brink of self-annihilation.

    money is food and water and shelter and education and healthcare (etc). having self-earned money is good. it is having more money for doing more work, for contributing more to the pool of wealth, for creating more goods and services.

    it is the love of having other-earned money that is fatal to everything on this planet because theft of people’s earnings is the greatest injury whether legal or illegal. every theft comes with an angry person attached. we have thousands of legal thefts going on every second.

    the violence pollution in our world is ever-escalating unto extinction because of the extreme mal-distribution of material wealth.



    ECONOMIC UNJUSTICE is the root cause of 99% of unnecessary human suffering: ignore it and your every descendent’s future is null and void. ignore it and you can and will fix nothing at all.

    our enemy is an IDEA stuck in 6 billion people’s heads because they do not comprehend correct economic fundamentals. that’s why after every bloody revolution we have allowed extreme wealthpower giants to re-arise.

    it is time for the only revolution worth having, the peaceful revolution where we teach each other that we do not have to give our self-earned money away to make it work for commerce, where we realize heirs have done nothing to create the wealth they get free-gratis – leaving others to take out less than they put into the pool of wealth – so we know to sanely restrict private inheritance, time we install a corrective mechanism to counter the fact that wealth automatically concentrates because of a previously unseen yet inherent flaw in the nature of transaction itself

    time to be rid of unlimited-fortunes capitalism if we want to restore freedom and democracy

    we have a material wealth inequity factor residing in the billions and that is tyranny-anarchy, not democracy

    governments are owned now by wealthpower giants, and cannot save us

    humans must stop acquiescing to extreme economic un-justice

    this is not optional if we are to survive

    sustainable global happiness and safety are entirely possible

    but who can see the mistake 6 billion people are making?

    we seem to think we have some right to spend our time and energies seeking agreement on answers to all the wrong questions, alas…

  8. Lurch said on June 1st, 2008 at 7:27pm #


    Not to rain on your parade, but seeing as the plutocracy has the “lawyers guns and money” how would do you propose to remedy the current economic inequality with out resorting to extreme violence, physical or otherwise?

  9. XavierOnassis(SaveYourOwn...) said on June 2nd, 2008 at 7:27pm #

    Hi, Lurch. I’m not certain your question is addressed to me (maybe you were asking Mr. Hirschhorn?), but I’ll take the liberty anyway to give you my proposed solution, as I know of no other remedy that comes without a downside.

    Please note that what I’m recommending does not propose interfering with any of the many wide-open thefts in human economic systems at present, except by preventing these thefts from accumulating endlessly. This plan corrects for all injustices in our economic systems, but does so indirectly and does not attempt to eradicate in piecemeal fashion every unjust practice embedded in our economics– because I don’t believe that is possible or necessary.

    As I say, we don’t interfere, except that we clip wealth at the top, thus effectively limiting the endless unjust concentration, which is endless tyranny, trouble, and tension, racing to extinction rather soonish if we don’t get real, and coolminded, and allgrownup. The wave of money is rising up into dangerous crests; we are getting smart enough to clip off the crests and dump them into the troughs so we can all sail out into our economic lives on a calm financial sea.

    Ok, so here we go with the what to do. I have logical and astutely-reasoned arguments for our doing the following:

    1. A 1% increase per month in the global money supply, going equally, directly, freely, electronically to every living human being, children included, one account per person. The inflation effect will reduce overpays, the money effect will reduce underpays, and it does so without the cost of assessing fortunes. This method is not perfectly efficient in reducing overpay, but it is very easy and quick to reduce underpay. A 1% per month inflation will make a 1% imbalance, which will adjust, as the underpaid spend more, generating more supply. It is gentle enough to avoid any economic social shocks, and works because the inflation effect reduces overfortunes MORE than the equal share increases them, while it reduces underfortunes LESS than the equal share increases them. The weakness in this is that the overpaid can inflation-proof their fortunes to some extent, especially if the idea is implemented nationally not globally. This approach is easy and quick to set up, it immediately relieves underpay stress and pressures and violence at the bottom. It is the lowest possible, most indirect interference with the overpaid. A regular inflation is very much less inconvenient than an irregular one. The fact is, governments and banks are ALREADY increasing the money supply – only at present they are giving the money increase to the banks to suck more money off people through loans. Inflation devalues everyone’s money. It is a sneaky tax, forcing people to borrow, and in effect making them pay interest to buy back their own money.

    2. Making inheritance public instead of private. This will make the overpay shower gently down on humanity over three generations. It takes no self-earnings from living persons, and it reverses the perpetual concentration of wealth and political power in fewer and fewer hands. It counters effectively the natural tendency of money to concentrate unjustly, violently. Yes, making inheritance public instead of private means (almost) a 100% inheritance tax. We are preventing inequality of fortunes from growing to infinity by shovelling overfortunes into underfortunes. We know money automatically, unjustly concentrates endlessly, so any sensible species will introduce a counter to that. The simplest way is having every human being have one account (which governments will be happy to open since it means money coming into the country) into which the estates of deceased persons over US$1 million are distributed equally, electronically, directly, immediately, automatically. Private heirs can share the first US$1 million, (if we choose not to completely eradicate free gratis money). Parents would have trusteeship of children’s accounts till some suitable age, say 10. (This will give parents good reason to teach economic sense before the date children take over responsibility for their own funds!) This method is low-impact, yet totally effective. It doesn’t take away overfortunes from living persons, yet it will move humanity from extreme injustice and violence to near perfect pay justice and non-violence in just three generations – the time it takes for all the overfortunes to die.

    Now, as for the WHY we must do these 2 things (or do whatever else can be proven to correct the injustice without erecting a wasteful and inefficient bureaucracy), keep reading, please.

    The founding fathers knew that democracy, freedom, fraternity, peace, happiness and indeed survival depended on preventing wealth concentration, and thought regular revolution would be needed to keep freedom. But, revolution doesn’t work, doesn’t last, because the leaders of revolution are necessarily merely the next-toughest, next-greediest gang in town [think Robespierre, Lenin, Stalin] who are those with the least idea of the enormous value, to themselves and all others, of pay justice. Also, revolution doesn’t work, doesn’t last, because the people have far too vague an idea of the fundamental essentiality of pay justice to/for everything good, to have the vigilance to maintain and improve pay justice. Thus, by 1880 the highest pay per hour was a million times the lowest pay per hour in USAmerica: sew-ers were getting 1 cent per hour whilst Jay Gould was getting $10,000/hr.

    So much for vigilance, eh?

    And now highest pay globally is a billion times lowest – and violence is proportional. (Just how crazy do we want to act before we sober up?!)

    So, is there anything realistic and effective that can be done to restore pay justice, which is at the root of our myriad vast problems?

    Yes, but there will either be an uprising of will to survive, to be real, to be bigpicture, to be happy…or there will be history-on-steroids-kaboom.

    For only the cost of your time spent reading and thinking fearlessly – thinking what I call “radically rationally”, you can prove to yourself with the proofs I can provide, that pay justice does in reality what NOTHING else will do, that it does save us from auto-genocide (we are at 60 times planet death capability and rising, and there are madmen at the helm) …and that further, pay justice does in reality cause exponentially increasing quality of life for everyone – both the currently underpaid AND the currently overpaid …and with those proofs you can also prove to yourself that everyone actually already agrees with this idea.

    Pay justice is so enormously beneficial to everyone that a great majority can be convinced, perhaps upwards of 99% (even some of the richest people on earth are already clamoring for less inequality!), and when the overwhelming majority are in agreement the super-overpaid incorrigibly greedblind will no longer have gunmuscle [army, police], will no longer have power in opposition to the will of the 99%.

    The people in the armed forces are – who? They are our family members.

    So when – and only when – an overwhelming majority are aware of the no-downside and huge upside of pay justice for everyone, pay justice will not be merely requested from a position of no power, it will be mandated and it will be served.

    Not all change has been brought around by force – for examples, using fire instead of just running in panic from it, and having insurance. Both good ideas that were once unknown. New ideas do come along. “Car” was once just an idea in someone’s head, and today the idea of car is ubiquitous. A long time ago people decided it was a good idea to give up the “right” to murder, in order to be protected from murder, and they outlawed murder. In the same way, we can decide to give up the “right” to unlimited personal fortunes, in order to be protected from unlimited personal fortunes.

    The fiercest tyrant has always folded to firm and clear opinion of the people. Even tyrants cannot walk around in public naked, because the people “know” it is wrong.

    Therefore we need only show people the reality. History is unanimous on the point. Simple logic proves it strongly.

    Every adult in the world can be taught in just 31 times the time it takes to teach two. If it takes a month on average for a person to take to heart the reality of the dependence of happiness and sustainability on pay justice, every adult will know it in just 31 months, by word of mouth alone. Education alone can do it – and we only need to teach the bellwethers, then the herd instinct will work for us as people follow the bellwethers to safer pastures. Everyone need only learn it and teach two. There are 3 billion adults to reach but 3 billion adults to reach them, with all their energies and resources. Culture is rooted in ideas; only change of root ideas is root change of culture. We can get out of this extremely self-abusive relationship with injustice by heroic individual mental fight.

    This idea is very plain and simple – if you look at the big picture. Strike at the root and the tree of problems comes down permanently. Hack at the branches and kaboom.

    Pay justice is the most important justice, because money buys just about everything, and it is social power too. Pay injustice is the root of all problems. Don’t solve that, you don’t solve anything: your tree of problems is growing faster than you are hacking branches. Pay injustice [and the violence] has been growing faster than we can hack branches for 3000 years, since specialization of labor started, trade started, and wealth become storable, nonperishable.

    There are many wideopen legal thefts in the system – pays for no work done by self. If you pay students for studying there are NO valid reasons for higher than average hourly pay – they are all specious arguments by greed [love of overpay, love of having the opportunity to have other-earned wealth]. Greed impoverishes: 99% are underpaid, and the overpaid are very unhappily always under attack.

    Remove these elements and you can calculate the highest selfearnable fortune – it is under $10 million [100 hrs max per week x 50 wks per year x 50 yrs working life x US$40/hr – doubling every 18 yrs at 4% global inflation].

    People are saying: Let’s not let these superrich have so much, let them have less. But why is no one working out how much they should have? Why is there no work on assessing what is right? People pay lip-service to liberty and justice for all – but where is the thinking on where pay justice lies?

    You’ve heard the quote about how we are in a race between education and catastrophe?

    Believe it.

    This is our human insane reality: two people do a fortnight’s work, and we give one of them $1 and the other $50,000,000 [average, all his life] $1,000,000,000 [peak rates of pay]. We give 99% of people less than the world average, we give 90% of people less than a 10th of average, so that we can give 1% of people more than average, so we can give 1% of people up to a million times average. We calmly sit by while a few rake most of the money out of the social pool of work/ wealth/ products of work. We look in the pool and we say: Isn’t it sad that there is so little in the pool for most people, and we make no connection between this and the people pumping out most of the pool with a fleet of siphon trucks…while each and every family earns makes creates US$200,000 a year of wealth/ products of work.

    We know and believe that the rich get richer and the poor get poorer – we know that this has been going on for millennia – the few getting richer and richer and richer [and more and more powerful] for millennia, and most getting poorer and poorer and poorer [more enslaved] for those same millennia, and yet we don’t know we are robbing every one of ourselves of everything. The American dream of freedom from tyranny was founded on the prevention of unjust wealth concentration – and we don’t know we have utterly neglected that path. The price of democracy is vigilance, and we do not even know we have been utterly unvigilant regarding the root and fount of democracy, freedom, and justice, peace, happiness, and survival.

    We have inherited and are running a powerful economic machine that came down to us cobbled together as much by default as by design, and our machine has an inherent defect – a flaw the size of a drip that has in fact with time become a tsunami of accumulated injustice.

    By acquiescing to this madness, every day, every hour, every human is turning out misery, turning the handles that turns out minced humans minced happiness, not because they are evil, just because they are wrong – just because they do not dump their mindless faith in human custom and use common sense.

    People have brains – but they keep them away from certain areas of their realities! Let us for once set aside our lemming faith in the crowd and bring our behaviour in front of the tribunal of our wits.

    It’s all about education. About learning and teaching economic clarity…which is mighty important for beings who live their whole lives awash in commerce. There IS nothing else to do: education alone can whip our enemy when the enemy is an idea – and it is – and this enemy has outposts in virtually every head. It’s about showing people the evidence and encouraging them to re-think.

    The fight we need to have is a fight with our own brains. We must become willing to accept that we have learned some things which are not true, and then unlearn those things. We need to accept that we all have our own biases and they aren’t easy to lose even when we’re trying to remain conscious of them. We need to build some mental muscle! We are sorcerer’s apprentices: smart enough to have got big trouble started that we haven’t figured out how to stop. We need help.

    And here I am to tell you that help has been given. Help has arrived in the nick of whiteknuckle time. There is a way to stop this juggernaut…this unnecessary juggernaut of overpayunderpay violencemiserytyranny that has reduced our quality of life by a factor nearly incomprehensible that goes unguessed at even.

    Pay justice is a super sweet bargain – the Mother of all bargains – and this would be true even if our earthly existence was NOT at stake. The investment in pay justice will reap dividends so large that we will wipe out forever even the current poverty of our horizons.

    PURSUE YOUR HAPPINESS WITH ALL MINDFIRE, BEarthlings – before it is too late!