Three related phenomena are today combining to strangle American democracy.
The first is the explosion of economic inequality and the increasing gulf between the top 1 percent of taxpayers -- who average significantly more than $1 million in annual income -- and everyone else in America. The second is the opening of the floodgates to the influence of that same explosion of outsized wealth on our politics. Both problems have worsened considerably in just the past couple of years and now threaten to turn America's already imperfect democracy into a political system much closer to an oligarchy.
Yet there is a third and equally disturbing factor contributing to the erosion of our democracy, and that's the media's failure to put these changes at the center of their election narrative.
Let's start with the income disparities. Recently released government economic statistics covering 2010, the first year of real recovery from the financial collapse of 2008, found that fully 93 percent of additional income gains coming out of the recession went straight into the wallets and purses of the top 1 percent. Even more alarming were the buckets of cash pouring into the swimming pools, saunas and other receptacles enjoyed by the top 1 percent of the 1 percent. Those folks at the very pinnacle of the financial food chain -- who average nearly $24 million a year in income -- captured fully 37 percent of this rise. As for the rest of us -- the bottom 99 percent -- we saw our income rise by less than a hundred bucks, not even enough to cover a tip at Le Bernadin these days.
As Jacob Hacker and Paul Pierson illustrate in their book, Winner-Take-All Politics, this exploding wealth inequity is the result of deliberate policy choices made by politicians in the service of those who fund their campaigns. During the nation's economic recovery under the watch of former President Bill Clinton, the 1 percenters took roughly half as much of the country's economic gains as they're enjoying today. That number increased to about two-thirds during Bush's presidency. These trends were damaging enough to the fabric of our democracy, but during Bush's terms Congress repeatedly cut tax rates on top earners along with capital gains and estate taxes.
Columbia University political scientist Robert C. Lieberman, writing in Foreign Affairs, also notes that in the 1990s the Financial Accounting Standards Board, which regulates accounting practices, attempted to put a stop to the practice of allowing corporate CEOs to compensate themselves with massive stock-option packages. The board correctly predicted that it would lead to an epidemic of deceptive accounting practices. "But Congress, spurred on by the lobbying efforts of major corporations, stopped the FASB in its tracks," wrote Lieberman. As a consequence, CEOs have been able to enrich themselves at the expense of employees and stockholders "through the mutual backscratching habits of corporate boards."
The ability of the 1 percent to buy politicians and regulators is nothing new in American politics -- just as inequality has been a permanent part of our economic system. This is true of virtually all political and economic systems. But instead of seeking remedies to this ongoing problem, the putative guardians of our democratic principles, rights and responsibilities -- the United States Supreme Court -- has chosen to vastly exacerbate the situation.
Led by Chief Justice John Roberts, the Court has chosen to ignore its predecessors' understanding that tons of corporate cash flooding the political system would likely -- as noted in the 1990 Supreme Court case Austin v. Michigan Chamber of Commerce -- result in "corrosive and distorting effects" on American politics when designed "to influence unfairly election outcomes."
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