Industrial Dictatorship

Posted on by under Economic issues, education, Environmental Issues, History, Political commentary, Social commentary

I have many ‘pet peeves’ these days, one of which is the wealth inequality in this country.  It keeps growing and growing like an overfed toddler and while most people struggle to pay their bills and put food on the table, the 1% or so at the top laugh their way to their broker’s office to see just how much richer they are today than they were a month ago.  I’ve never heard it explained any better than Robert Reich does …

The three myths used by the ultra-wealthy to justify the ultra-wealthy

Robert Reich

29 September 2022

The stock market is down but don’t cry for America’s mega-billionaires. A record share of the nation’s wealth remains in their hands. They’re also paying a lower tax rate than the average American.

So how do they justify their wealth and their low tax rates? By using three myths. All are utter rubbish.

  1. The first is trickle-down economics. They (and their apologists) claim that their wealth trickles down to everyone else as they invest it and create jobs.

Really? For over forty years, as wealth at the top has soared, almost nothing has trickled down. Adjusted for inflation, the median wage today is barely higher than it was four decades ago. Trump provided a giant tax cut to the wealthiest Americans, promising it would generate $4,000 increased income for everyone else. Did you receive it?

In reality, the super-wealthy don’t create jobs or raise wages. Jobs are created when average working people earn enough money to buy all the goods and services they produce, forcing companies to hire more people and pay them higher wages.

  1. The second myth is the “free market.” The ultra-rich claim they’re being rewarded by the impersonal market for creating and doing what people are willing to pay them for. The wages of other Americans have stagnated, they say, because most Americans are worth less in the market now that new technologies and globalization have made their jobs redundant.

Baloney. Even if they’re being rewarded, there’s no reason why the “free market’ would reward vast multiples of what the rich were rewarded decades ago. The market can induce great feats of invention and entrepreneurialism with lures of hundreds of thousands or even millions of dollars — not billions. And as to the rest of us succumbing to labor-replacing globalization and labor-saving technologies, no other advanced nation has nearly the degree of inequality found in the United States, yet all these nations have been exposed to the same forces of globalization and technological change.

In reality, the ultra-wealthy have rigged the so-called “free market” in America for their own benefit.

Billionaires’ campaign contributions have soared from a relatively modest $31 million in the 2010 elections to $1.2 billion in the most recent presidential cycle — a nearly 40-fold increase. What have they got for their money? Tax cuts, freedom to bash unions and monopolize markets, and government bailouts. Their pockets have been further lined by privatization and deregulation.

  1. The third myth is that they’re superior human beings — rugged individuals who “did it on their own” and therefore deserve their billions.

Bupkis. Six of the 10 wealthiest Americans alive today are heirs to fortunes passed on to them by wealthy ancestors.

Others had the advantages that come with wealthy parents. Jeff Bezos’ garage-based start was funded by a quarter-million dollar investment from his parents. Bill Gates’s mother used her business connections to help land a software deal with IBM that made Microsoft.

Elon Musk came from a family that reportedly owned shares of an emerald mine in Southern Africa. (By the way, when I mentioned this in a recent video, Elon went nuts — tweeting that “You [sic] both an idiot and a liar.” Hmmm. Did I touch a nerve, Elon?)

Don’t fall for these three myths. Trickle-down economics is a cruel joke. The so-called “free market” has been distorted by huge campaign contributions from the ultra-rich. Don’t lionize the ultra-rich as superior “self-made” human beings who deserve their billions. They were lucky and had connections.

In reality, there’s no justification for today’s extraordinary concentration of wealth at the very top. It’s distorting our politics, rigging our markets, and granting unprecedented power to a handful of people.

The last time America faced anything comparable was at the start of the 20th century. In 1910, former President Theodore Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power” could destroy American democracy.

Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916, and the capital gains tax in 1922. Since that time, both have eroded. As the rich have accumulated greater wealth, they have also amassed more political power — and have used that political power to reduce their taxes.

Years later, Franklin D. Roosevelt saw the 1929 crash not only as a financial crisis but as an occasion to renegotiate the relationship between capitalism and democracy. Accepting renomination in 1936, he spoke of the need to redeem American democracy from the despotism of concentrated economic power.

“Through new uses of corporations, banks and securities,” he said, an “industrial dictatorship” now “reached out for control over Government itself. … [T]he political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor—other people’s lives… Against economic tyranny such as this, the American citizen could appeal only to the organized power of Government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people’s mandate to end it.”

FDR gave workers the power to organize into labor unions, the 40-hour workweek (with time-and-a-half for overtime), Social Security, unemployment insurance, and workers’ compensation for injuries. He raised taxes on the top.

But since then, these reforms have also eroded.

The two Roosevelts understood something about the American economy and the ultra-rich that has now reemerged, even more extreme and more dangerous. We must understand it, too — and act.

**

By the way, here’s the new video that put Musk into a lather:

37 thoughts on “Industrial Dictatorship”

  1. Thanks for sharing this, Jill! Honestly, all these wealthy guys are only the facade. One has to look behind the scenes, and you will find …the nobility and their vasalls. Like the old Roman quote “Divide et Impere”, they have devided their shares on the money pots. So every single shareholder has to follow his pregiven duty, or he will loose all. xx Michael (P.S.: In my opinion therefore (to cover this) the myth of wealthy Jews is hold on fire, whenever useful.)

    Liked by 1 person

    • Hmmmm … I hadn’t thought of that, Michael. But yes, I think “Divide and conquer” is exactly what is happening here in the U.S. today, and other countries as well, so … you’ve given me something to think about. Makes what is happening even more frightening than it was! xx

      Like

  2. Thank you, Jill. Do you agree that it’s odd Reich made no mention of all the successes—and the vision—when if more voters possess such knowledge, they may be inclined to vote to ensure that these positive trends continue?

    Liked by 1 person

    • No, I don’t think it’s odd at all, for to do so would have doubled the length of his OpEd, and not been completely on topic. Related, yes, but better covered in a separate piece, I think. Which, by the way, you have done a great job of in your post that I shall be re-blogging shortly!

      Like

      • Thanks again for the reblog. I don’t want to belabor this, but I think it’s important for voters to be hopeful now, and Reich could have easily said something about the good stuff that’s been happening in two sentences. Hell, I could edit his piece to make room for it!

        Liked by 1 person

  3. I’m surprised Reich didn’t mention all the Biden administration has been doing to reverse this horrible inequity. It’s the subject of the post I put up today, Jill. And it’s all the more reason we must save the House and Senate with larger majorities. We have a real chance now, and we must keep it going.

    Liked by 2 people

  4. My problem is so many poor people believing the wealthy deserve to be rich, while others therefore must deserve to be poor. What is it that makes them want to be downtrodden while total jerks and assholes crush them underfoot! This boggles my mind to no end!

    Liked by 1 person

    • It has always been a puzzle to me how people can believe such nonsense as the poor deserving to be poor! I think people are just entirely too gullible and many will believe whatever lies they are told.

      Like

      • I think it goes deeper than that, but who am I to say. Must be 40 or more years now since I read a book called Dando Shaft, Everyman’s Millionaire. A man has the idea to get rich quick by advertising in all the big newspapers that if a million people send him $1 each he will become a millionare, and write a newspaper column about how his life changes and how he gets to live as a millionaire.
        I think there is something behind that story, a yearning for poor people to be rich, even for a day. And since they cannot be millionaires themselves, they worship those who are.
        They are suckers, of course, because they have to suffer while some fool gets to live off their suffering, but that somehow makes it okay, for them.
        It is certainly not okay for me. For fools to enjoy the suffering of others is enough reason to put them all behind bars for life, and have their money confiscated and used to give all people better living conditions. There is no need for anyone to suffer, and no one should accept they were born to be treated like animals. (My apologies to animals everywhere!)

        Liked by 1 person

        • Perhaps you’re right … perhaps there is a certain allure to wealth and the lifestyle it enables that gives people hope for their own future. But … then there are people like us who have no desire for wealth and who would much rather see that money distributed on an equitable basis such that no child goes hungry, no family has to live on the streets. So, what causes that difference? Is it genetic? Education?

          Like

          • That’s a good question, Jill, which I can only speculate on. I don’t think it is either genetics or education, but rather a willingness to believe someone deserves to have more than others. And perhaps they are right. But in my books anyone who has more than others is (morally) obligated to share with others who have less. (Seems to me there is a passage in the Bible to that effect, for all the good Christians out there.) But, no matter what they mght say, Capitalists do not believe in Xian values. Religion is a means to control the masses.

            Liked by 1 person

            • I’m on the same page in your book. Anyone who hoards their wealth and is willing to see children go to bed hungry while they whiz around the Caribbean in their yacht, is NOT deserving of having more. And yes, Marx hit the nail on the head when he called religion “the opiate of the masses”, for that is precisely what it is.

              Like

  5. Pingback: Industrial Dictatorship — Filosofa’s Word | Ned Hamson's Second Line View of the News

  6. Pingback: INDUSTRIAL DICTATORSHIP. |jilldennison.com | Ramblings of an Occupy Liberal

  7. Jill, this is an excellent piece. The three myths are exactly that. And, their ability to fool people is amazing. The old line comes to mind that some wealthy people who inherited their wealth were born on third base and think they hit a triple. The losing former president says his father gave him a $1 million loan to get started when, in fact, his father transferred over $400 million tax free through various means before he died as per a financial study reported in The New York Times that went largely unread.

    Trickle down economics has been proven to fail in five separate studies and came close to bankrupting the state of Kansas until it was unwound over a governor’s veto a couple of years ago. But, just think about – a rich person is telling you that the solution to your problems is to give him more money. And, people believe this.

    As for free markets, people need to know we live in a fettered capitalistic economy. If we did not, the former president would have no money, going bankrupt six times. Bankruptcy protection, insider trading laws, back dating stock option, collusion, opposite way trading laws, and other forms of fraud prevention exist for a reason. Think Enron, Health South, Tyco International, etc. Enron’s CEO and CFO set up fraudulent companies to mask profits and not pay taxes giving them code names. The CEO lied to employees telling them to keep invested in company stock when he knew it would tank the next few days after discovery.

    How is that for trickle down? He basically peed on employees’ heads.

    Keith

    Liked by 1 person

      • Yes they are. Have you read Candy’s comment about Trump’s daddy bailing him out?
        I think like calls to like. In our case, I believe it’s creators and compassionate, caring people finding each other. In other areas it’s haters who find each other. I guess you have to expect both on the internet.

        Liked by 1 person

        • Yes, hers was the first comment I saw, and she is spot on! I did a post or two back in the day about the fallacy of him being a “self-made” billionaire. All the gapers were claiming what a ‘great businessman’ he was and I wanted to throw up, for what sort of businessman is involved in over 5,000 lawsuits??? And what successful businessman files for bankruptcy 6 times??? But, I discovered that some people admire that … they admire his ability to screw over contractors, employees, and even the government! They fail to realize it is them he is actually screwing over. Sigh. I’m so tired of ignorant people.

          Liked by 1 person

  10. Pingback: The myth of the self-made billionaire | Meeka's Mind

  11. The gaps between the rich and the poor grows wider, with recession of the economy, inflation, and, what we bought yesterday, we can’t buy, using the same amount of dollars today, and, the middle class, which is, where, most of us, are, will become, the, lower class, as a result, of the, recession of the, economy.

    Liked by 2 people

    • I have lived most of my life in poverty, and I can tell you it is no fun. But the thing is, I learned to live within my means a long time ago. I have no need for fancy cars or expensive man-toys. My tastes are simple, my needs few. My one luxury was when I bought my partner a thoroughbred race horse for her birthday after receiving a windfall one year in back wages all at once. That horse has graced us with 2 daughters and 2 granddaaughters.
      Aside from that we have pretty much nothing.
      But would I love to see the super-wealthy have to share their wealth with us common folk! Damn right I would. I have had to work hard for nothing, while they barely lift a finger and they have anything their little hearts desire. I am not saying it is unfair, fairness does not exist in the upper echelons of wealth. But it is certainly INHUMANE to hoard reams of money while others cannot afford healthy food or healthy bodies. WEALTH IS A CRIME ABAINST HUMANITY!

      Liked by 1 person

    • The bulk of the wealth in the world is held by about 1% of the people. Just imagine for a minute if that were evenly distributed among every person on the globe … wow … there would be no more hunger, no more debating whether to pay the rent or take your child to the doctor! If only. But, it will never happen because the wealthy are greedy bastards and have convinced a large portion of the proletariat that the poor deserve to be poor and that their god wants them to have the wealth, that they somehow deserve it more than the rest of us.

      Like

Comments are closed.