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U.S. No Longer An Actual Democracy- Princeton Study

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Princeton Study: U.S. No Longer An Actual Democracy

By Brendan James  April 18, 2014    TPM

A new study from Princeton spells bad news for American democracy—namely, that it no longer exists.

Asking “[w]ho really rules?” researchers Martin Gilens and Benjamin I. Page argue that over the past few decades America’s political system has slowly transformed from a democracy into an oligarchy, where wealthy elites wield most power.

Using data drawn from over 1,800 different policy initiatives from 1981 to 2002, the two conclude that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of or even against the will of the majority of voters.

TPM Interview: Scholar Behind Viral ‘Oligarchy’ Study Tells You What It Means
“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” they write, “while mass-based interest groups and average citizens have little or no independent influence.”

As one illustration, Gilens and Page compare the political preferences of Americans at the 50th income percentile to preferences of Americans at the 90th percentile as well as major lobbying or business groups. They find that the government—whether Republican or Democratic—more often follows the preferences of the latter group rather than the first.

The researches note that this is not a new development caused by, say, recent Supreme Court decisions allowing more money in politics, such as Citizens United or this month’s ruling on McCutcheon v. FEC. As the data stretching back to the 1980s suggests, this has been a long term trend, and is therefore harder for most people to perceive, let alone reverse.

“Ordinary citizens,” they write, “might often be observed to ‘win’ (that is, to get their preferred policy outcomes) even if they had no independent effect whatsoever on policy making, if elites (with whom they often agree) actually prevail.”

Senator Elizabeth Warren Speech- fighting for working people

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Senator Elizabeth Warren addressed the AFL-CIO National Summit on Raising Wages Jan 7, 2014 in Washington, D.C.

The American Dream: you have to be asleep to believe it

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Wealth Inequality in America: perception and reality

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Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

References:
http://www.motherjones.com/politics/2…
http://danariely.com/2010/09/30/wealt…
http://thinkprogress.org/economy/2011…
http://money.cnn.com/2012/04/19/news/…

Written by laudyms

April 28, 2014 at 1:37 pm

Our Fragile “Hothouse” Economy

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  by Charles Hugh Smith  Of Two Minds   November 3, 2011

Financialization has led to a “hothouse” global  economy where the slightest disruption in central bank/Central State  intervention will cause the sickly flowers to wilt and expire.

Of the three great financial truths that have been left  unspoken for the past four years out of sheer dread, lest their mere mention  collapse our economy, let’s start with the most obvious: if the Federal Reserve  and Federal government ever crimped the dripline of “easing” and  bailouts, America’s financial sector would promptly roll over and expire.

Does this strike you as a robust, flexible, transparent  system? Of course not. Rather, it is a “hothouse” financial sector,  one that needs constant injections and a carefully controlled environment just
to keep it alive.

And since the U.S. economy has been fully financialized,  it is now dependent on financial machinations and skimming for its  “growth,” profits and the debt expansion that fuels everything else,  including the metastasizing Savior State, a gargantuan aggregation of an  unaccountable National Security State with crony-capitalist cartels and a  dependency-inducing Welfare State.

Without the debt conjured into existence by the Fed,  Treasury and the financial sector, even the mighty multi-tenacled Savior State would quickly starve.

As a result of our dependence on financialization and  exponential debt, our entire economy has become a weak, sickly  “hothouse” economy which can only survive in a narrow band of  temperature, debt injections and opaque manipulations of data and what’s left  of the nation’s shriveled markets.

Once exposed to Nature, i.e. “wild” transparent  markets that are allowed to discover the price of all assets naturally, then both the nation’s financial sector and its economy would implode.

The second great financial truth is that the financial  sector has long been detached from the real economy. The real economy is for chumps; the “no-risk” skimming of monetary legerdemaine is the raison d’etre of the entire financial sector, a point brilliantly made in this “must read” essay posted on Zero Hedge: MF Global Shines A Light On Monetarism’s Incapacity To Enhance The Real Economy

Granted, some of the  financialization schemes described are not that easy to grasp, but here’s the  primary point:

That is why this system has to change at some point. It  is exactly designed to be misleading, and the reason is so very simple. In any fractional system there will be a desire to amplify that fraction to the maximum degree. But in doing so, participants recognize that the process of maximization entails creating negative human emotions and perceptions since history is not really that kind to this manner of fractionalization. So the system has institutionalized, abetted by the very regulators that are supposed to cap fractions and leverage, these methodologies of hiding just how much financial entities have engaged in maximizing themselves under the cover of mathematical precision.

The Panic of 2008 was supposed to correct these excesses and remedy the fact that risks have not been accurately priced for decades. Yet the system has resisted every effort, simply settling for redefining the appearance of safety yet again. Somewhere in that mathematical pursuit of maximum fractions, the very goal of finance changed, as if traditional banking was no longer sufficient to support the pursuit’s ever-growing ambitions. So the financial economy has broken away from the real economy, using the ironic cover story of enhancing price discovery to the process of intermediation.

The fact that money is disconnected from the real economy never enters the consciousness of monetarists since money is always the answer. But make no mistake, the primary reasons for this global malaise are that money has lost its productive capacity and its proper place as a tool within the system.

The third great unspoken truth is that the conventional Status Quo– the financial punditry, the Cargo Cult of Keynesianism, the
incestuous academic community, the PhDs in the Fed and Treasury, the politico lackeys, the self-serving think-tanks of both empty ideologies (“which is better, Bud or Bud Light?”), not to mention the lobbyists, revolving door toadies and all the other hangers-on in New York and Washington– have no Plan B and certainly no Plan C. In other words, they are utterly clueless about what
to do when their abject and total failure becomes unavoidably obvious.

It is of course a crisis of self-service; nobody dares put their own status, wealth, power and perks at risk by thinking independently, much less speaking All That Cannot Be Spoken Lest This Sucker Implode.

But it is also a monumental lack of imagination; the lackeys and toadies cannot imagine any other Beast other than the one whose teat they have sucked all their lives. They live in mortal fear not of being ignorant or lacking in imagination–those deficiencies are too obvious to contest–but of the truth of the system’s increasing weakness and vulnerability being openly revealed.

America’s (and the world’s) financial sector is a fragile, sickly hybrid which will shrivel and expire the moment it is placed in the real, dynamic world. And because the global economy has become dependent on the slouching beast of financialization, it too is fragile and sickly, sensitive to the slightest perturbations and exquisitely vulnerable to any disruption of the constant life support offered by central banks and Central
States.

It is neither capitalism nor socialism, but a twisted hybrid of the worst traits of each.

I happened to catch a brief interview on DW TV (German TV, with English announcers and subtitles) of one of the few ECB (European
Central Bank) officials with the integrity to resign in protest at the ECB’s blatant interventions in the bond market (buying Italian bonds to prop up a market that would implode the second ECB support vanished) and the central bank’s slippage toward money-printing as the answer to every problem.

This gentleman said that the ECB had to monitor the global economy 24 hours a day lest some tiny policy mistake bring the entire shaky edifice down.

Does that strike you as a description of a robust, adaptable, capitalist system based on transparancy and price discovery of assets? Of course not; it describes a hothouse economy, always on the ragged edge of collapse if its central bank and Central State minders make the tiniest error in its care.

For four precious years we have been force-fed nothing but lies, obfuscation, misdirection, fear-mongering, spin, sins of omission, misinformation, propaganda, false rumors and false hopes. The hothouse is slowly falling apart, and the sickly global financial sector is wilting. The financial media is heralding every “save” and every “rescue” with ever-shriller enthusiasm, lest a contagion of truth spread through the hothouse like a chill wind.

But we can be sure of one thing: those who know better have already sold, and it is now the job of the politico lackeys and the
toadies of the Mainstream Media to convince the bagholders to hold on and not sell, because “everything’s been rescued.” Distilled to its essence,
that is their one and only job: to convince you not to sell. That keeps the bid up for their Masters to sell into.

If history is any guide, the final collapse will be triggered by an apparently “controllable” event, something like the bankruptcy of MF Global. All eyes are on Greece’s referendum, apparently scheduled for December 4 or 5; but regardless of the vote, does a “yes” or “no” change that nation’s fundamental insolvency? No, it doesn’t.

Does the passage of some toothless law in Italy magically render that nation solvent? No, no, a thousand time no; none of these public-relations tricks can change the fact that all these nations are insolvent, the banks are insolvent, and even France and Germany are staggering under unprecedented burdens of debt.

The smart money sold in May, 2010, and the disbelievers among the Power Elite sold in May 2011, or perhaps August. Now those below the
smart money (but still above the dumb money) are sniffing the fetid hothouse air, where the rank, sweaty desperation of the minders is now everpresent.

So the apparatchiks and foot soldiers have been ordered to keep the dumb money from selling, until their “betters” can sell into a rumor-juiced bid. This explains the sudden jump in the S&P 500 on every rumor of rescue, as if an over-indebted and leveraged-26-to-1 financial system can be rescued with “belt-tightening” and ECB intervention with taxpayer money.

The entire euro “project” was a scam that enabled a vast new scale of financialization. Now that the “project” is falling apart, the bagholders who bought into the shuck-and-jive are nervous and fearful; has it all really been “saved”?

No, it hasn’t; it cannot be saved. The only “solution” available is to sell: sell now, while there is still a bid. Sell fast, sell hard, sell everything denominated in euros. That is precisely what the Status Quo fears the most: an awakening continent of bagholders and debt-serfs.

Anyone thinking the euro (and eurozone) can’t possibly go down until after the Greek referendum may well find their confidence in the
Status Quo’s “rescue” has been sorely misplaced.

More from Smith:

The  Collapse of Our Corrupt, Predatory, Pathological Financial System Is Necessary  and Positive

Charles Hugh Smith, Of Two  Minds|Nov.  5,  2011          We are being throttled by the Big Lie: we’re told  that if the predatory financial system implodes…

How  Much of the Global Economy Is Useless Friction?

500 Million Debt-Serfs: The European Union Is a Neo-Feudal Kleptocracy (July 22,
2011)
The Dynamics of Doom: Why the Eurozone Fix Will Fail (July 25, 2011)
The European Model Is Also Doomed (February 7, 2009)
When Debt-Junkies Go Broke, So Do Mercantilist Pushers (March 1, 2010)
Why the Euro Might Devolve into Euro1 and Euro2 (March 2, 2010)
Why the Eurozone Is Doomed (May 10, 2010)
Ireland, Please Do the World a Favor and Default (November 29, 2010)
Why The European Union Is Doomed (March 28, 2011)
Greece, Please Do The Right Thing: Default Now (June 1, 2011)
Why the Eurozone and the Euro Are Both Doomed (June 23, 2011)
Greece Is a Kleptocracy (June 28, 2011)

Written by laudyms

November 5, 2011 at 3:16 pm

Bill Moyers: “Welcome to the Plutocracy!”

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You would think the rich might care, if not from empathy, then from reading history. Ultimately gross inequality can be fatal to civilization…. Pulitzer Prize-winning anthropologist Jared Diamond writes about how governing elites throughout history isolate and delude themselves until it is too late.

Wednesday 03 November 2010            t r u t h o u t

The first Howard Zinn Memorial Lecture was delivered by veteran journalist, Bill Moyers, Friday, October 29,  2010, at Boston University .

.              Howard Zinn (b. Aug. 24, 1922, in Brooklyn, N.Y.; d. Jan. 27, 2010, in Santa Monica, Calif.) was a professor of Political Science at Boston University from 1964 to 1988, historian, playwright, activist, and author of more than 20 books, including  A PEOPLE’S HSTORY OF THE UNITED STATES:  1492 – PRESENT (1980), revised (1995)(1998)(1999)(2003).

*   *   *   *   *

I was honored when you asked me to join in celebrating Howard Zinn’s life and legacy. I was also surprised. I am a journalist, not a historian. The difference between a journalist and an historian is that the historian knows the difference. George Bernard Shaw once complained that journalists are seemingly unable to discriminate between a bicycle accident and the collapse of civilization. In fact, some epic history can start out as a minor incident. A young man named Paris ran off with a beautiful woman who was married to someone else, and the civilization of Troy began to unwind. A middle-aged black seamstress, riding in a Montgomery bus, had tired feet, and an ugly social order began to collapse. A night guard at an office complex in Washington D.C. found masking tape on a doorjamb, and the presidency of Richard Nixon began to unwind. What journalist, writing on deadline, could have imagined the walloping kick that Rosa Park’s tired feet would give to Jim Crow? What pundit could have fantasized that a third-rate burglary on a dark night could change the course of politics? The historian’s work is to help us disentangle the wreck of the Schwinn from cataclysm. Howard famously helped us see how big change can start with small acts.

We honor his memory. We honor him, for Howard championed grassroots social change and famously chronicled its story as played out over the course of our nation’s history. More, those stirring sagas have inspired and continue to inspire countless people to go out and make a difference. The last time we met, I told him that the stories in A People’s History of the United States remind me of the fellow who turned the corner just as a big fight broke out down the block. Rushing up to an onlooker he shouted, “Is this a private fight, or can anyone get in it?” For Howard, democracy was one big public fight and everyone should plunge into it. That’s the only way, he said, for everyday folks to get justice – by fighting for it.

I have in my desk at home a copy of the commencement address Howard gave at Spelman College in 2005. He was chairman of the history department there when he was fired in 1963 over his involvement in civil rights. He had not been back for 43 years, and he seemed delighted to return for commencement. He spoke poignantly of his friendship with one of his former students, Alice Walker, the daughter of tenant farmers in Georgia who made her way to Spelman and went on to become the famous writer. Howard delighted in quoting one of her first published poems that had touched his own life:

It is true
I’ve always loved
the daring ones
like the black young man
who tried to crash
all barriers
at once,
wanted to swim
at a white beach (in Alabama)
Nude.

That was Howard Zinn; he loved the daring ones, and was daring himself.

One month before his death he finished his last book, The Bomb. Once again he was wrestling with his experience as a B-17 bombardier during World War II, especially his last mission in 1945 on a raid to take out German garrisons in the French town of Royan. For the first time the Eighth Air Force used napalm, which burst into liquid fire on the ground, killing hundreds of civilians. He wrote, “I remember distinctly seeing the bombs explode in the town, flaring like matches struck in the fog. I was completely unaware of the human chaos below.” Twenty years later he returned to Royan to study the effects of the raid and concluded there had been no military necessity for the bombing; everyone knew the war was almost over (it ended three weeks later) and this attack did nothing to affect the outcome. His grief over having been a cog in a deadly machine no doubt confirmed his belief in small acts of rebellion, which mean, as Howard writes in the final words of the book, “acting on what we feel and think, here, now, for human flesh and sense, against the abstractions of duty and obedience.”

His friend and long-time colleague writes in the foreword that “Shifting historical focus from the wealthy and powerful to the ordinary person was perhaps his greatest act of rebellion and incitement.” It seems he never forget the experience of growing up in a working class neighborhood in New York. In that spirit, let’s begin with some everyday people.

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