Part II: “Let them Eat Credit”
The American process of political thinking and its results I described in Part I as too much non-thinking. A substantial sector of the public seems to believe empty headedness is a truer form of democracy. Instead they like wailing and railing against almost anything. Tea Party candidates are largely working this vacuum. Put a different way it is magical thinking, the process small children and not so small children use when they either have problems organizing their thoughts or not enough experience with which to make the necessary comparisons. It is also a public mental state encouraged by major money interests trying to defeat laws and regulations that might keep them from profiting from the mayhem they create.
Instead of the democracy we think we have, we are experiencing the results of one of the most pernicious lies of history—that private, propertied self-interest known as possessive individualism is a benefit to us all. Like all other cultural lies this economic lie has just enough truth on its face to cover its failures and allow it to be rendered safe for public consumption. Millions have been expended in just the last few years by oligarchs of wealth to buy up and control the major media of radio, TV, newspapers and magazines so as to insure that what is said is politically ‘safe’ for the public to hear. This is most obviously true when this capitalist process is viewed historically. For capitalism has evolved and that evolution has been a signature event in undermining our democracy just as it has been in undermining our ecology and the health of people and the planet.
When any corporation, or moneyed individual for that matter, can by means of the ’s decision in Citizen United, secretly use virtually endless amounts of money to buy Congress and state legislatures, the very integrity of the democratic process is attacked and effectively dismantled. Such money is expended to elect legislators who are paid to enshrine the belief that self-interested accumulation will benefit us all. The attempt is to legitimate the grotesque accumulation of wealth now in existence. Here are some statistics to frame this highly injurious evolution of American capitalism.
- Four hundred families now own $1.27 trillion of the wealth in the United States. Their average annual income in 2007 was $345 million each. Their tax rates which have been cut in half over the last 15 years are now 16.6%.
- The top 10% of income ‘earners’ in 2007 received very close to 50% of all income in the U.S. Such top decile families have annual incomes above $109,000.
What is interesting here is the spread between the ‘400’ and their average of $345 million a year and the lowest income that makes the top decile, $109,000 annually. Quite obviously in order to skew the statistics that greatly other figures are decisive:
· 24% of income went to 1% of the population.
· 6% of all earnings went to 0.1% of the population, about 15,000 families. They make at least $11.5 million a year.
· Each of the 400 is worth at least $1 billion.
· Just as impressive is this concentration of wealth for the top 10% has climbed steadily since 1978 from 33% to the present 50%
· From 1980 to 2005, 80% of total income went to the top 1% of income earners.
· Even though economic productivity increased by 20% from 2001 to the present, NONE of the remuneration for that increase reached middle and lower income people whose wages remained stagnant.
Paul Krugman has called it all The Great Divergence in his book by that name.
Mainstream economists have labored strenuously to find explanations for this distortion of value in the nation’s income in market value terms. Few, if any have done so successfully though they have tried. The reason for the expenditure of energy was so that no important group or class could be blamed. As for any suggestions for everyday people in coping with such a shrinking and stressing of their lives, Raghuram G. Rajan, a business school professor at the University of Chicago, has argued that “let them eat credit” has been the political establishment’s answer to this reprehensible condition.
Inequality has been the result. Inequality that has surpassed that of the early 1900s when that ‘golden age’ of blatant wealth of the upper 1% garnered only 18% of national income compared to today’s 24%. Why did an American public stand for it? Lie down for it would be more descriptive. There were riots in the early 1900s, massive strikes and protest. Nothing today compares though the robbery has been greater. Perhaps there is a partial explanation in the following chart by Professor Rajan derived from the Bureau of Labor Statistics.
The crucial evidence is in the 4th and 5th columns. A public which is seeing its wages apparently rising by the amounts in the 4th column may well think it is doing better without realizing that inflation is stealing their income in gobs. And of course, this relationship had been going on for far longer than 2002, since at least 1980. Only the 1% and 0.1% portion of the 90th percentile were making mammoth gains as invisible to the everyday citizenry as it is in this chart
Thus a country’s citizens who believe themselves to be free are in the most danger of entering servitude. A situation, of course, which approaches slavery when no end of the condition is contracted for and everyone is chained in place for health benefits, staring at high unemployment rates around them and with very little discretion as to choice or a sufficient savings cushion to carry them through a change in employment even if they took the risk.
The coming election watered as it is by corporate wealth is shaping up to be a battle for reality. The reality is that the nation is democratic only in name and theory, but has become a peasantry of indentured servants. As such the vast majority are beholden to shrinking wages offered by wealthy oligarchs fattened in their expansive homes seeing nothing as they ride in their too many limousines. To avoid any revelation of that reality, the wealthy are extending every effort and mountains of money to make a smokescreen of unreality. The ranting claims being made paid for by corporations or their ruling plutocrats seek to obscure who was responsible for and who controlled and still controls our deadbeat economy and therefore who damages our squashed lives within it.
In this swamp of national existence whatever opposition exists or arises against it cannot proceed by merely twitching and feeling good, spewing flammable rhetoric and anger sky high and feeling satisfied by whatever destruction they cause. It must be about the people reinstating their rightful place and obtaining their rightful control by demanding intelligent public policy that benefits everyone. That means shrinking inequality by a clear transparency of economic knowledge made available to the general public at regular intervals. That public must then make that identity for itself that has the organization and the will to demand that capitalism be either democratized or recognized as an illegitimate social and economic system.
 (D-VT), The Nation, July 22, 2010.
 . “The Great Divergence.” Slate, First in the series “The United States of Inequality.” September 3, 2010, p. 2
 Noah, op. cit.
 (pronounced kru:gmen) is Professor of Economics and International Affairs at the Woodrow Wilson School of Public And International Affairs at Princeton University among other locales and op-ed columnist for the The New York Times.
 Noah, op.cit, p.39.