THE BLOG
04/22/2014 02:41 pm ET Updated Jun 22, 2014

America by the Numbers: Part II

"Government should prevent an immoderate accumulation of riches." -- James Madison

In a previous post, we revisited Martin Luther King, Jr.'s iconic "Beyond Vietnam" speech of April 4, 1967. King, confronting head-on America's "triple evils" of racism, economic injustice and militarism, challenged America to find its true values and "come home." Polls and statistics suggest that, in the 47 intervening years, America has not "come home" and sadly is further from home than ever.

King knew "Beyond Vietnam" would be controversial. He devoted more effort into preparing it than to any other speech. As feared, he was roundly criticized -- by blacks and whites -- for conflating the anti-war and civil-rights movements. King, however, had come to realize that racism was just one loop in a Gordian knot of evils. Key to untangling the knot: facing the truth about America's militarism and its systemic economic injustice.

Militarism, economic injustice and racism are subtly intertwined. First, maintaining an unnecessarily large military siphons off monies that could and should be spent for other pressing needs, among them education and infrastructure. Higher education is the surest route to upward mobility. If only the wealthy can afford higher education, then many remain socioeconomically entrapped. Second, a bloated military machine promotes unwise military adventurism. Case in point: the Iraq War. And because today's all-volunteer military draws heavily from those lower on the socioeconomic scale, the casualties of war are disproportionately Latino, black and Appalachian. Here's how King put it in "Beyond Vietnam:"

We are taking the black young men who have been crippled by society and sending them eight thousand miles away to guarantee liberties in Southeast Asia which they had not found in Southwest Georgia and East Harlem.

Simply put, excessive militarism helps systematize both racism and economic unfairness. Five decades after "Beyond Vietnam," America continues to spend more of its discretionary income on defense than on all other needs combined.

King called for a "radical revolution in values." Our spending priorities reflect our values, and those values are little changed since King warned that America that was flirting with "spiritual death" through its misplaced priorities. The current dysfunction of our national government and its inability to address genuine problems is symptomatic of that death spiral. It is not yet too late to heed King's prophecy, but time is running out.

We'll know America has pulled back from the brink when 1) our military expenditures are drastically reduced, and 2) the tax code is reformed to close the widening gap between haves and have-nots.

America could cut its military expenditures by half and still outspend China, Russia and Saudi Arabia combined. Imagine how 400 billion dollars trimmed annually from the defense budget could transform this nation if it were injected into education, infrastructure, health care and the commons.

Regarding the tax code, a little history is warranted. From the Second World War until 1963, those in the highest income brackets were taxed at a rate of 90 percent on "excess" income. Many consider these years to be America's economic hay day. The marginal tax rate dropped to 70 percent throughout the 1970s, to 38.5 percent under Ronald Reagan, and to as low as 28 percent under George H. W. Bush before climbing slightly. It has remained at 35 percent during the Bush II and Obama years. All attempts by the Obama administration to re-balance the tax code have been nixed by the GOP, whose members, in overwhelming numbers, have signed the Tea-Party's "Norquist Pledge" opposing increases in marginal tax rates.

Meanwhile, economic disparity has grown dramatically since 1970. America now has the most skewed distribution of wealth in the developed world. It's instructive to hear what the founding fathers had to say about the excessive accumulation of wealth. Madison's caution begins this essay. As Minister to France under George Washington, Thomas Jefferson learned invaluable economic lessons first-hand from the French. Appalled both by the concentrations of wealth enjoyed by the French aristocracy and by their callous exploitation of the poor, he proposed an antidote for the fledgling United States: a progressive tax code.

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise.

It's worth noting that a geometrical progression is much steeper at the high end than the linear progression we currently have.

Madison and Jefferson both realized that extreme concentrations of wealth threaten the foundations of democracy. Two recent academic studies expose how. The first, titled "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens" by Martin Gilens of Princeton and Benjamin Page of Northwestern concludes:

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, while mass-based interest groups and average citizens have little or no independent influence [emphasis added].

In short, the U.S. is no longer a functioning democracy. We're a plutocracy. The recent decisions of the Supreme Court on Citizens United (2010) and McCutcheon (2014), both by the slimmest possible margins, shamelessly "legitimize" the power of the oligarchy.

The second academic study, titled "Democracy and the Policy Preferences of Wealthy Americans" by Page and Jason Seawright of Northwestern and Larry Bartels of Vanderbilt, reveals why rule by economic elites is so disastrous to the common good. "There can be little doubt that the wealthy exert more political influence than the less affluent do." But the political views of the extremely wealthy do not reflect those of mainstream America. In general, the greater the wealth, the more extreme the views. Those in the top 0.1 percent tend toward an ultraconservatism that devalues public education, despises government regulation of Wall Street and corporations, opposes taxation and a minimum wage, and is hostile toward universal health care. The Koch brothers, who marshaled $400 million in 2012 to advance their ultraconservative agenda, fit this description to a "T." As a consequence of the disproportionate influence of the ultra-wealthy on policy, rank-and-file Americans find their government making decisions that are increasing antithetical to their desires and best interests.

The wisdom of the Founding Fathers notwithstanding, to even suggest in today's polarized atmosphere that extreme concentrations of wealth are anti-democratic is to invite branding as "socialist," or worse, "communist." No sane person would suggest that American capitalism should be replaced by old Soviet-style collectivism. Soviet-style communism failed miserably because the collective crushed the individual, squelching liberty, spirit and creativity. However, King understood what many are only now are realizing: the other extreme of the economic spectrum is equally sinister. In American laissez-faire, no-holds-barred capitalism, the individual is granted the right to destroy the collective. Regarding the "idolatry of money" and "trickle-down" economics, Pope Francis wrote in his recent encyclical: "A new [economic] tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules."

Healthy societies find a judicious balance between free enterprise to encourage innovation; regulations to limit individual, corporate and governmental abuses of power; and a social safety net to protect the most vulnerable. Forty-seven years after "Beyond Vietnam," America has yet to find that balance and is skating ever closer to a point of no return in which the power of the oligarchs will be absolute.