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Miles Mogulescu

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The Rich Are Different From You and Me: They Don't Care About Jobs and Their Money Buys Politicians

Posted: 12/16/11 04:05 PM ET

F. Scott Fitzgerald: "The rich are different from you and me, Ernest.
Ernest Hemingway: "Yes, they have more money."

The rich don't just have more money than you and me. The rich use their money to legally bribe politicians to support policies that favor themselves over the middle class in the auction that we call elections. And the policies they support are different from those supported by the majority of middle class Americans voters.

"We are the 99%" isn't just a brilliant piece of political messaging. It's an accurate reflection of the division of wealth and power between the richest 1% and the other 99% and the degradation of American democracy into a political auction in which politicians are bought by the highest bidder. Until we change this -- if necessary by a 28th Amendment to the Constitution declaring the corporations aren't people and money isn't speech -- American democracy will continue its descent into a hollow shell in which political power is wielded not by the people but by a tiny oligarchy of the richest Americans and their political servants.

A critical new study by The Russell Sage Foundation shows the extreme disconnect between the opinions of most Americans and those of the top 1%. The results of that study, as well as another study by the Sunlight Foundation, shows that campaign contributions are even more concentrated in the richest 1% than wealth is. Is it any surprise, then, that the policies of our government more closely reflect the interests of the wealthiest Americans who contribute the bulk of campaign financing, than they do the interests of the other 99%?

According to a recent CBS News/New York Times poll 57% of Americans believe that the economy and jobs are the country's most important problem and only 5% believe the most important problem is the budget deficit/national debt.

The wealthiest Americans see it differently, According to The Russell Sage Foundation survey of the wealthiest Americans (with an average net worth of $14 million) 32% think the country's most important problem is budget deficits and only 11% think it's unemployment. According to the survey,

"most of our wealthy interviewees opposed the idea that the government in Washington should 'see to it' that anyone able to work can find a job. They overwhelmingly opposed the idea that government should 'provide' jobs if private enterprise cannot. There was very little support for generous unemployment insurance or for expanding the Earned Income Tax Credit for low-wage workers."


"...Many mentioned cutting government programs, especially entitlements...This emphasis on dealing with deficits by cutting programs rather than raising taxes--significantly different from the view of most members of the general public--also emerged...Most of our wealthy respondents tilted towards cutting back, rather than expanding, most federal government programs (nine out of twelve we asked about), including popular entitlements like Social Security and health care. There was little sentiment for substantial tax increases on the wealthy or on anyone else.

"...Our wealthy respondents...often tend to think in terms of 'getting government out of the way' and relying on free markets or private philanthropy to produce good outcomes. Evidence from identical questions asked in various surveys of the general public indicates that in this respect the wealthy tend to differ markedly from less affluent citizens."

In sum, the largest block of wealthy Americans think the country's biggest problem is deficits while most Americans as a whole think its jobs. Most of the wealthy oppose raising their own, or anyone's, taxes -- according to a recent Gallup poll, by a 2-1 margin Americans as a whole favor raising taxes on the wealthy to pay for President Obama's proposed jobs plan. Most of the wealthy want to "get government out of the way" and "rely on free markets" while the general public and less affluent citizens disagree with this premise.

So if America were really a democracy in which the government tended to follow the will of the majority, one would think that most politicians would be focusing on job instead of deficits, raising taxes on the wealthy to pay for jobs programs, and using government to regulate the excesses of the markets and the global financial casino that crashed the economy in 2008 and threatens to do so again.

But this is clearly not the case. Washington remains obsessed with deficits and cutting entitlements over job creation. President Obama doesn't dare propose a large-scale jobs program and can't even get political traction for his modest jobs program. Congress refuses to pass even a small tax increase on millionaires to pay for a temporary reduction of payroll taxes for the middle class. And bank lobbyists and their congressional vassals are tying up the implementation of the extremely moderate financial regulation bill passed last year in response to the meltdown of the banking system in 2008.

Why the disconnect? The answer is that our elected officials are far more influenced to by the small number of wealthy individuals and corporations who donate to their campaigns than they are by the average voter.

According to The Sunlight Foundation study, during the 2010 election cycle, 26,783 individuals (or about 0.01%) of Americans contributed more than $10,000 to federal political campaigns for a combined total of $774 million or 24.3% of the total from individuals (not counting corporations) to politicians, parties, PACs and independent expenditure groups and 44.1% of individual donations of more than $200. More than 80% of party committee donations com from these elite donors.

The average contribution of this One Percent of One Percent group was $28,913, more than the national median individual income of $26,364. Among the top donors of Bob Perry, CEO of Perry Homes, who gave $7.3 million to Karl Rove's American Crossroads 2010 and $4.4 million to Swift Vets and POWs for Truth in 2040, Wayne Hughes, chairman of Public Storage, Inc. go gave $3.25 million to American Crossroads, and Fred Eshelman, CEO of Pharmaceutical Production Dvelopment who spent $3 million on his own group, RightChange. Individuals affiliated with Goldman Sachs were the largest group of top 0.01% donors with those affiliated with Citigroup coming in second.

As the study points out, "In a world of increasingly expensive campaigns, The One Percent of the One Percent effectively play the role of political gatekeepers. In other words, almost no one can be taken seriously as candidate for office unless s/he has already raised substantial sums from the top 0.01%. Candidates who are not politically aligned with the interest of the toe 0.01% are screened out of the process before they even get started.

Moreover, according to The Starlight Foundation, "Unlike the other 99.99% of Americans who do not make these contributions, these elite donors have unique access." As the Russell Sage Foundation study points out, about half of its wealthy respondents had personally contacted Federal officials. A number of them were on a first name basis with top officials, referring to them by first name like "Rahm" (Emmanuel) or "David" (Axelrod).

The studies provide a clear picture of why the government pays more attention to the views of the top 1% (or top 0.01%) than those of the majority of voters. As MSNBC anchor Dylan Ratigan has repeatedly pointed out, 94% of the time the candidate who raises the most money wins which means we don't have elections, we have auctions. And candidates depend on The One Percent of the One Percent for an increasing share of their campaign funds, giving these donors unique influence over the ordinary voter.

Increasingly, American democracy is degenerating into an oligarchy is which government policy is determined the top One Percent of the One Percent. Supreme Court decisions in Citizens United that corporations are people with the right to donate unlimited sums to support or oppose candidates, and in Buckley v. Valeo that money equals speech an no limits may be placed on the amount a candidate may spend to get elected, makes it all but impossible to reverse this system of legal bribery by legislation.

It may be that nothing less than a 28th Amendment to the Constitution declaring that corporations aren't people and money isn't speech is the only thing left that can save democracy in America.

 
 
 
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01:32 PM on 12/20/2011
“The Rich are different from you and me†a timeless quote indeed and much like any novel it changes depending on what time you actually are in yet its sentiment remains the same. In this case the rich are different in the fact that the government shouldn’t have sole control/ responsibility for creating jobs. While that may be true it will be up to “the rich†to also step up and help create those positions. There is a need here for recognizing the importance of collaboration and teamwork for a progressive economic recovery here. The political games that we’re playing don’t serve the benefit of the people in need here and each day that we don’t decide on a plan of action we fall deeper into traps that have kept us down in the past. We also should recognize that simply continuing to raising taxes on the wealthy is as ineffective of a long term(http://eng.am/p1IF9I) plan as cutting unemployment insurance so that “the rich†don’t have to pay more taxes (http://eng.am/tXvhwg). We’re all waiting for the solution here, or at least to approach the table and begin a real discussion about what to do here.
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l78lancer
Wisdom is the principal thing
04:38 PM on 12/19/2011
"Increasingly, American democracy is degenerating into an oligarchy is which government policy is determined the top One Percent of the One Percent."
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This is nothing new - oligarchy and oligolopoly always been the major forces of influence in this country. The Constitution was written not by common folk but by landed gentry, businessmen and individuals of wealth. The Louisiana Purchase, Westward Expansion, birth of the railroad, Civil War, Industrial Revolution and other advents that mark this country's history were for and about the rich. There were some periods where common folk experienced some ability to achieve (mostly during Reconstruction, after WWII, and to a degree during the Progressive period of the early 1900s) but those periods rose then declined. Many gains that were realized were subsequently lost.

In 1913, the Fed was established to stabilize banking against chronic bank crashes that occurred after the failure of the Second Bank of the United States in 1837, not to protect the poor but the rich. Relaxed government attitudes towards laissez-faire economics after WWI incubated conditions that, in part, permitted the crash and Great Depression. Laissez-faire was strictly about the rich. Even legislation intended to control the bad or predatory behavior of the rich created during the Industrial, Progressive and Depression Eras has eroded over time including Anti-trust, Glass-Stegall, and union organization.

So this isn't new, it's just a new phase with a heightened urgency on the part of the rich and those who do their bidding..
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HUFFPOST SUPER USER
l78lancer
Wisdom is the principal thing
03:54 PM on 12/19/2011
"Until we change this -- if necessary by a 28th Amendment to the Constitution declaring the corporations aren't people and money isn't speech -- American democracy will continue its descent into a hollow shell in which political power is wielded not by the people but by a tiny oligarchy of the richest Americans and their political servants."
--------------------------------------------------->

Corporations are not people and money is not speech. That is an epic statement. Now maybe that is something that OWS needs to take to the Supreme Court if they really want to move their message.
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A level Head
09:00 AM on 12/19/2011
The biggest and most obvious thing this "study" shows is that a large number of people are ready able and willing to spend OPM (other people's money) to fix their perception of social ills.

Seems this was one of the great dangers to the Republic foreseen by the Founders and a large reason for the ORIGINAL design of checks, balances, and limitation of power awarded the Central Government.

I will however agree that the conferring of Human and Political Rights on Corporations which are ideally contraptions to limit liability of individual owners is a huge error and abomination against the Republic and citizenry.

As for term limits, I suppose that is an answer if we are ready to admit that we need yet another Federal intrusion into our personal conduct. The simple fact is that term limits can easily be accomplished by simply taking self action. The call for statutory term limits is simply another admission that we are unable to act in self goverance.
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GhostOfFDR
You're on the slippery slope to socialism
12:46 PM on 12/20/2011
You may not like that it is, but wealth inequality is a social ill, whether you perceive it or not. And, if not corrected, this country will be destroyed through revolution or dictatorship, or both. The ultra wealthy are far too short sighted to see that they are pushing us to a world where their heads are on poles outside of courthouses.

Taxes aren't other people money the are the peoples money. They are the cost of living and doing business in this country. If taxes move back to what historically were normal levels (say 1984 levels), do you really think the 1% are going to have a temper tantrum and leave? Or we could just make laundering money through offshore accounts in order to avoid taxes illegal again.

The founders of the Republic were also very concerned that an aristocracy or a plutocracy like the one we have would arise due to inherited wealth. Inheritance is not a natural law, but an invention of men. The dead cannot own property. If upon death some fraction of the property passes the the state, the dead man has lost nothing. His potential heirs have lost nothing either, as that portion of the property was never theirs. Of course there also need to be equivalent property transfer taxes to stop people from gaming the system.
09:04 AM on 12/18/2011
Here's a suggestion. I can sum this up in two words: TERM LIMITS
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GhostOfFDR
You're on the slippery slope to socialism
12:50 PM on 12/20/2011
Because new candidates are more expensive to bribe than the old ones? I don't think so.

We've seen what term limits buy you in states that have passed the: You get legislators that are even more in the pockets of big money contributors, but have no idea how the legislative process works. So they let the big contributors write the laws by themselves. In other words, you get California.
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Nell608
04:43 AM on 12/18/2011
And just how many were surveyed in that poll of the wealthiest Americans? Sage polled a random sample of 104 individuals in Chicago with a median worth of $7.5 million. When asked about the most important problem facing the country 32% said the deficit, 11% said jobs and 11% said education. It wasn't half of the wealthy; it was approximately 33 people who have become the tail that's wagging the dog. When asked to rate the problems as very important, somewhat important or not very important the ratings were:
87% - deficit 84% - education 79% - unemployment 74% -terrorism.

So it seems it's politicians who are capitalizing on this class warfare business because economic instability is high on everyone's list of concerns but the wealthy aren't faced with immediate concerns about unemployment. So instead of GOP trickle down economics we should look at the principle agreed to in the Mayflower Compact which was "to enact, constitute, and frame, such just and equal laws, ordinances, acts, constitutions, and offices, from time to time, as shall be thought most meet and convenient for the general good of the colony; unto which we promise all due submission and obedience."

It seems too many members of Congress have forgotten about the general good in pursuit of their own selfish pursuit of power and wealth. They should be replaced as soon as possible.
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10:57 PM on 12/17/2011
The superclass only care about their wealth and power and they will do anything to keep it. What do you think is the real reason you are losing your freedom?
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A level Head
09:04 AM on 12/19/2011
The REAL REASON ????

Simply put --- Is that the masses are a$$es and prefer to be fed at the trough rather than do the real work required of informed citizenry.

Not single vote can be bought at the base that is not for sale. Without the base blindly voting for the status quo year in and year out the buying of politicians would become largely impossible.

Simply vote for the candidate who is NOT currently in office across the board. I a few election cycles the message would reach the power structure.
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GhostOfFDR
You're on the slippery slope to socialism
12:53 PM on 12/20/2011
You underestimate the damage Republicans could do the the Republic in a single election cycle.
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Aurical
Trolls suck!
09:07 PM on 12/17/2011
As long as money is involved, this is what we will ALWAYS get.
05:07 PM on 12/17/2011
American voters can:

Institute incentivizing elected & appointed Federal/State government official compensation appraisal programs based on quarterly independent auditor reviews that will:

1. Implement immediately, a salary cut of 50% for Federal/State elected, staffs, & appointed members, plus transitioning all levels of U.S. Federal/State elected officials into a revamped National Health Care plan

2. Have registered voters determine final approval of any periodic salary increases for Federal/State elected or appointed members and decide the approval of appropriate member pension plan compensation levels

3. Have States aggressively seek TARP like assistance for Small Business, a Federal WPA program for States, & push Federal HR3149 for unnecessary barriers to obtain basic employment in each State.

All measures kill cross party line bickering & forces government officials to produce objective results impacting legislative and executive elected official pocketbook livelihood by registered voter approval, and directly relegates them to identify with the unemployed common man and small business--the Backbone of the American economy.

4. Restructure the 5 year vested pension fund program for Federal/State elected officials and their administrative staffs providing 25% of their salary based on the last 3 year average of their salary base rate, as a lifetime pension.

5. Initiate an immediate temporary discontinuance of Federal/State elected official salary compensation, upon disruption in Social Security/Medicare, military, unemployment remittances, extensions, or special education programs. Reductions in these stated programs will initiate a 15% concurrent conterminous reduction in Federal/State elected official/appointed/administrative staff salaries per occurrence.
07:27 AM on 12/18/2011
Are you kidding? Stock holders can't even get a nonbinding vote to say on executive pay in most cases. When as a part owner of a company( supposedly that is what stocks provide if you buy and own them) when you cannot even be granted any influence on capping executive compensation, you have no capital rights at all. None. So if your not willing to provide this, then your attempts to cut governmental compensation, which is much much lower, kind of fall on deaf ears. We want a complete package that affects both private and public sector and realigns the money properly to the people who first own it.
02:02 PM on 12/18/2011
We are not kidding, pinetrale.
You are comparing apples to oranges when dealing with U.S. Constitutional voter muscle-flexing influence versus Corporate employee and stockholder voter participation.

Of course, business management operation agreements or articles of incorporation will not give an employee or stockholder the ability to slash an owner’s salary, but the owner(s) or board of directors can slash YOUR salary.

The analogy is YOU, the voter, are the Owner, the congressman the employee.

Our State & U.S. Congressmen know of our petition drive intentions. They have responded letting us know WHAT they are doing bi-monthly on business crossing their desk.

This alternative is pragmatic in the voter public sector because the State and Federal Constitutions provides the common voter enough government participating power to use referendums against government malfeasance, misfeasance, policies, ordinances, or inappropriate financial expenditures of lawmakers.

One lowly poor person's vote has put a person in office or defeated a proposition. That rarely appears in the corporate private sector, but it occurs often in the American voter paradigm.

An monitoring appraisal process emphasizes structured unbiased productive performance for earned salaries, not for hard earned taxpayer coffers to be rapaciously stripped by, duplicitous, inexorable, recalcitrant, and churlish unproductive legislators.

New candidates and some incumbents are bringing this to current platforms. Term Limits are on the table too, Bowlingkev-helps achieve the goal.
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GhostOfFDR
You're on the slippery slope to socialism
01:02 PM on 12/20/2011
That's something a lot of people don't know. As a stockholder, the corporation lets you pretend to have ownership rights, but you're really just a creditor holding a no interest bond. You get to vote in elections that you have no chance of influencing. Some corporations require a unanimous vote against a director for their election to fail. The board of directors can vote away your interest in the company if they want by selling previously authorized shares. And when (it's hardly if these days) they declare bankruptcy you're on the lowest priority for getting anything out of it. Your only chance is to be on the board, and since we're not in the 0.01%, that will never happen.

It's a scam, and you're required to participate in it if you ever want a chance of retiring.
04:22 PM on 12/17/2011
When there is $3.7 Trillion flowing out of Washington, the potential rewards are too tempting to ignore. Big government is intrinsically corrupt government. Former Governor of Illinois, Rod Blagojevich, is in jail for rying to well a senate seat for something near or less than $1 Million (chump change in the antion's capital). Billionaire George Kaiser got $500 Million for Solyndra and then declared bankruptcy. Warren Buffett just bought a California Solar Farm that comes with $600 Million in government subsidies. True North Partners (an investment arm of the Walton Family who owns Wal-Mart) probaly got Green Tech. subsidies because they are a solar company (I didn't actually research this one), then the Walton's reap further benefits by buying subsidized panels from First Solar to install on Wal-Marts to cut their energy costs. In Washington, this is OK and no newspaper makes a peep about this obvious corruption. The only way to reduce the amount of fraud and corruption in government expenditures is to cut the net size of the budget.
02:23 AM on 12/18/2011
"Big government is intrinsically corrupt government."

Nonsense. The size of government doesn't drive the degree of corruption.

Running national (and most state-wide) primaries and election campaigns for high office is costly, especially due to the price of TV and radio ads. Those with money well in excess of any personal needs--especially the insatiably greedy--take advantage of this. The U.S. Senate isn't elected democratically: the seven least-populous states have roughly 5 million residents and 14 Senators while any two of the three most-populous states have roughly 50 million residents but four Senators. Combine that with supermajorities and the Senate is a bottleneck for national legislation, controlled by just 40 legislators and especially susceptible to corrupting large-dollar donors. The size of government (government spending) isn't a meaningful factor.

Solutions include: abolishing primaries; reforming Senatorial apportionment; capping personal and outlawing corporate campaign contributions; and mandating free TV and radio time for candidates and disclosure of who makes contributions of $100 or more to any candidate or PAC.

Smaller government only amplifies the power of the super-rich and super-greedy by restricting the regulation and oversight that ensures our public safety and keeps the marketplace honest.
07:30 AM on 12/18/2011
I think that is their goal. Shrink government as that disempowers it and the peoples wishes. I want to decrease the true bloat and duplications of services and get a grip on pension and health reform to lower costs, but not efficacy. We are mixing apples and oranges here where people with very different motivations seem to want the same thing, but don't.
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HUFFPOST SUPER USER
GhostOfFDR
You're on the slippery slope to socialism
01:04 PM on 12/20/2011
Yes, list all the green energy projects, because we all know that oil and gas haven't gotten billions per year in subsidies for the last few decades.
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HUFFPOST COMMUNITY MODERATOR
EspritDeVoltaire
K Street PR firm board member
03:09 PM on 12/17/2011
Time was when you could buy a GOP politician simply by pulling down your zipper in the airport men's room.
12:19 PM on 12/17/2011
It doesn't help matters that 249 of the 535 members of Congress, 47%, are millionaires and members of the top 1% themselves so are already inclined to give the top 1% what they want. http://abcnews.go.com/blogs/politics/2011/11/47-of-congress-members-millionaires-a-status-shared-by-only-1-of-americans/
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Gestas
Mountain Man
11:52 AM on 12/17/2011
Corporations are people....Corporations hate workers....Workers require wages...Wages subtracts from the bottom line...and the bottom line is all that matters in Corp.America..
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GhostOfFDR
You're on the slippery slope to socialism
01:06 PM on 12/20/2011
Yeah, it's too bad workers aren't people with rights anymore. I remember back in the day when workers had a right to band together and demand higher wages and better working conditions. Haven't seen that in a long time.
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guveqzero
Inventor and Innovator
11:32 AM on 12/17/2011
Well, Democrats have been the only party of late to have a candidate that restricted all donations to $100 max. GOPers have no such inclination. Why be ethical when you don't have to be? That is the conservative motto.
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GhostOfFDR
You're on the slippery slope to socialism
01:08 PM on 12/20/2011
I think you've over thought the conservative motto. The actual motto is "Why be ethical?"
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tin soldier
No more Mr. nice guy
10:54 AM on 12/17/2011
And let's not forget the rich are Democrats and republicans. Obamas campaign fund is estimated to reach 1 billion, how many republican donors do you think contributed. Naybe the democrats should clean their own house first