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The Dismal American Oligarchy
Robert R. Odle, Ph.D.
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… How Do You Live with the Oligarchy ....
There is a new study at Princeton which asked the question: is America an Oligarchy yet? My summary of the article is that the rich elite get their way with policy more often than the American majority get their way. In short, the rich elite are able to get the rules of the game changed in a way that is good for them and their pocketbooks. We may not be there yet, but our democracy is becoming an Oligarchy right in front of ours. Along with our debt, our children will have one more thing to thank us for.
Who Make Up This Oligarchy
500 or so billionaires can be seen on Forbes List of Billionaires. The people that make up this oligarchy are rich, typically billionaires, and often hold values similar to ours. However they have their special interest which usually includes making more money. Although there are billionaires in both the Republican and Democratic parties that act as part of this Oligarchy, they seem to have chosen Republican Party to get most of their laws passed, or not passed, as the case may require.
The Warren Buffett Tax
A good example of the rich getting their way was seen in the 2012 elections. The public found out that Mitt Romney’s earnings are taxed around 15%, much lower than the middle income tax rate. This is justified (by the rich) to encourage investments that taxes should be lower on capital gains than on salaries . Well, most Americans, and even some rich (Warren Buffett) disagree. Of course, we know how that came out. The public was ignored and the rich still are taxed lower on capital gains earnings than we are on our salaries. What the majority wants is not consistent with the oligarchy, so it's not usually going to happen.
Congress Passes Laws Primarily for the Oligarchy
The group from Princeton looked at a lot of issues, and well, when the congress is able to compromise and get something done (a cold day in hell), they are usually passing laws that the rich want. The common man gets his way if he agrees with the rich elite. (ha). So, when you see a law passed, asked yourself, does this law favor the Oligarchy or most Americans.
The Oligarchy is International with Similar Needs
Of course, the rich elite are international and although they may be in competition with each other, they all favor the same type of legislation the world over: low taxes, military protection, the ability to move their money where it can make the most money, low cost labor, relaxed regulations (financial and environmental), and means of influencing governments to pass laws in their favor (PAC’s, lobbying, bribes, etc.). In the US they control who can win an election by swamping the tv with ads (PAC’s) and in some cases controlling the media (Fox).
There is a constitutional amendment passed by a few states to make PAC’s illegal and stripe the Oligarchy of their biggest weapon. This movement is lead by Vermont, Barry Sanders homestate. But few Americans realize this may be our last stand as a functional democracy.
How Successful Has the Oligarchy Been?
So we already know the rich hold all the aces (and money). The graph below is just another way of showing how wealth is divided up in America.
The Oligarchy and The Minimum Wage
Notice the red dot on the wealth distribution graph above. That is the share of money that the poor people get in this country. Most of the people that get the minimum wage are part of this group. So, when we argue about the effect of changing the minimum wage on America, we are arguing about the impact of increasing the size of that red dot probably less than 10%. So, understand that we are talking about a very small decision that an immeasurably small impact on the US. Small changes in the rest of the system will overwhelm its effect. It is like the American Oligarchy throwing a small scrap of meat on the floor for the 40% to fight over. But, don’t worry, they don’t want to throw any more scraps to the minions, so it will never pass Congress. (And no, they will not allow Bernie Sanders to win either.)
Short Term Effect versus Long Term Effect
Short term, an increase in the minimum wage increases the amount of money going into that little red dot. And since the Oligarchy is always striving to maximize the amount of money going into their pockets, the small increase in the size of the red dot would be small but counter-productive. To restore order to the universe, they will via capitalistic efficiency simply continue automating and computerizing their business, pushing up the revenue per worker and hence needing less workers each year. Having to pay workers more gives them a little more incentive toward more automation. In any case, in the long term, the minimum wage worker is becoming a dinosaur.
But, on an even longer term basis, automation is decreasing the number of consumers and the profits business can earn. What is good for each individual company, to increase revenues and profits per worker, is collectively bad for both corporations, the Oligarchy and the American people. The communist party in contrast realizes that expanding the middle class is necessary for them to stay in power.
The Challenge is Overwhelming
The Oligarchy is in charge. Capitalism automatically increases wealth, but politicians make the rules by which this wealth is divided up. And the Oligarchy through the PAC’s decide which politicians get elected, re-elected, and which ones get a lucrative job when they leave congress. So, Congress is strongly motivated pass laws that insure their future and help the Oligarchy expand their wealth as the number in poverty swell to record levels.
Too bad the bottom 40% does not have anything that the Oligarchy needs or wants. So, what would persuade them to give more scraps to the minions around their table? I’m not sure there is any financial reason for them help the poor of this country.
The Oligarchy Needs the U.S. Military as Policemen
The International Oligarchy needs the U.S. military to protect their foreign possessions and businesses. Yes, we are talking about a world-wide Oligarchy that besides needing their businesses protected all over the world, also make a lot of money in the arms business. The U.S. Military alone is one of the biggest businesses in the world. ISIS didn’t make their equipment, they have US Military equipment purchased by the US taxpayer with profits going to the Oligarchy. Someone in the World Oligarchy is making out like bandits on the ISIS either supplying them weapons or supplying the other side weapons. There is no war that goes uncelebrated by the Oligarchy.
What does the Oligarchy need? Answer: more automation and computerization to reduce the cost of running their empires. More engineers and scientists to increase the profitability of their enterprises.
So they need well trained minions to fill sophisticated technical niches in their businesses. There will be millions of jobs in this area, unfortunately, with American school systems in shambles, especially in the poverty filled neighborhoods, there is little chance many Americans will benefit from this demand. And our youth are not helping themselves with their entitlement attitude especially young men. Instead of making a good business working for the companies run by the Oligarchy, more Americans will slide into poverty … and no one in power will care.
Transfer of Wealth from America to the Oligarchy
The shortage in educated Americans will not be fixed by improving education in America, that takes too long for the Oligarchy. Instead, on the short haul, they will fill the shortage in educated Americans by bringing educated people from around the world to America. On long haul it will make more sense to locate the companies as much as possible in the home countries of the new workers. The cycle of wealth transfer from America to the Oligarchy will be complete as automation is developed and maintained overseas and brought to this country.
how does it feel being a minions in the Oligarchy?
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Get used to it … the Oligarchy is now in charge.
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