How the 1% runs America. Runs us. The answer points to 2 futures for us.

Summary:  How does the 1% influence the daily running of America? Not the high level politics and business, but the broad influence on our social institutions which is almost as significant. The answer says much about America, the New America quickly rising around us, and how to save what we have before it’s lost.

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Darth Vader

As the distribution of power changes in America, the shape of our society must change as well. So after 40 years of income and wealth concentrating, CounterPunch asks “Is the American social contract breaking?” Listen; you can hear the answer in the wind.

“I am altering the deal. Pray I don’t alter it any further.”
— Darth Vader, “The Empire Strikes Back” (1980)

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America is changing. On the 4th of July 2006 I wrote about the death of the Constitution. And in the following years I wrote about the rise of the New America on the ruins of the Second Republic. Scores of posts discuss ways to reform America. This political evolution results from the rise of the 1%, as they  gather into their hands more of America’s wealth and income.

Taking this from the abstract to the specific was the July 2013 post described how I have seen the New America in my experience working with local social service charities. The power of the 1% exerts an invisible but overwhelming power over people. They rearrange a community like a magnetic field reorients everything metal in a room.

But how does this happen? How does the 1% exercise control in their community (beyond their direct commercial and political power)?

This is America. They don’t send the police (or their legions of private security) to lean on those who argue with them in the boardrooms of the local United Way or Girl Scouts. Except in cases of great importance, they don’t threaten reprisals. For those with real power, they seldom need use force.

They can reward cooperation. But the rich are famously stingy. Peons should be subservient, without the bother of rewarding them. Besides, it’s better style. So they routinely rely on another lever.

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Screwtape Letters

“To get the man’s soul and give him nothing in return — that is what really gladdens our Father’s heart.”
— From the demon Screwtape, in C. S. Lewis’ The Screwtape Letters

What’s the hidden element to their power? Steve Randy Waldman, writing about economics at his Interfluidity website, explains: we’re managing our personal risk. The evolution of work during the past 40 years mirrors the 1% increased income.

  1. Pay has stagnated as America has grown richer. Even in hot professions, as in tech the 1% ran a cartel to limit wages (which the Administration of the socialist Obama settled for pennies on the dollar).
  2. Job security has vanished for much of America. Even the largest corporations consider their employees a consumable, like Kleenex.
  3. Competition has increased, even in many professions. (This increased need to sell has wrecked the social service clubs, as small businesspeople and professionals no longer have sufficient leisure time for them).
  4. It’s worse for the blue collar workers, whose jobs have increasingly become part-time, no benefit, minimum wage, temporary jobs.
  5. As a result savings rates have plummeted. Worse, by far the largest asset of the middle class is housing. The crash wiped out the wealth for millions of Americans.

And so the middle class becomes a shadow of what it briefly was during the summer of the post-WW2 years. As in Game of Thrones, winter is coming. Neither the petite bourgeoisie nor peons have the security to challenge aristocrats about anything, in any fashion, however small.

Mr Banks

Consider Mr. Banks in “Mary Poppins”. A bank executive, he has a nice house, servants, and the ability to set his children up in the same social class. He has income, but probably little wealth. But he gets fired. With little hope of a good reference, and less of obtaining another good job.

Deference, even servility, to power is a pro-survival trait for economically insecure people. Mistakes, however inadvertent, are too costly. (Hostility to the underclass is a common offsetting attitude)

American audiences see Banks’ s despair, but cannot comprehend. But we will understand in the future, as insecurity grows and comes to define the lives of most Americans. Social trends in motion tend to continue. The 1% has reached the point at which its strength allows them to become more powerful, exercising their power more boldly. Ever more outrageous compensation. Shifting taxes from the rich to the middle and lower classes. Poorer public schools and more regulations decreasing social mobility.

There are many different dreams for America. Those of the 1% tend to envision America back like it was before the New Deal, perhaps even to the Gilded Age. In fact their politics for generations has been focused on doing so — and they’re winning.

Henry F. Potter
Henry F. Potter

What do they get by doing so? Let’s ask a famous capitalist what he thinks of the New Deal programs:

“What does that get us?  A discontented, lazy rabble instead of a thrifty working class.  And all because a few starry-eyed dreamers like Peter Bailey stir them up and fill their heads with a lot of impossible ideas.”

–- Henry F. Potter, leading banker and first citizen of Potterville

This is the vision of many American corporations. They’ve mustered their resources to crush unions, keep an insecure low-wage workforce, and ruthlessly control them to maximize profits. Like Amazon, the future of American workers. Bezos is the Henry Ford of our time, reorganizing work to boost efficiency and profits.

  1. Gawker’s series of well-researched muckraking articles about Amazon
  2. I Was a Warehouse Wage Slave: My brief, backbreaking, rage-inducing, low-paying, dildo-packing time inside the online-shipping machine“, Mac McClelland, Mother Jones, March/April 2012
  3. Worse than Wal-Mart: Amazon’s sick brutality and secret history of ruthlessly intimidating workers“, Simon Head, Salon, 23 February 2014 — “You might find your Prime membership morally indefensible after reading these stories about worker mistreatment”

Conclusions

E. P. Arnold Royalton
E. P. Arnold Royalton

“It’s all about power and the unassailable might of money.”
— E. P. Arnold Royalton, the great 21st century industrialist and philanthropist

“The Party seeks power entirely for its own sake. … The object of power is power. … Obedience is not enough.  … Do you begin to see the kind of world we are creating? … Always there will be the thrill of victory, the sensation of trampling on an enemy who is helpless.” (George Orwell’s 1984)

But this need not be our future. Our past provides a history of successes. Western history provides ample inspiration. We can be whatever we choose to be.

“The future doesn’t belong to the fainthearted; it belongs to the brave.”
— Ronald Reagan’s speech following the explosion of the Challenger, 28 January 1986

Apollo-11: flag

For More Information

(a)  Reference pages to posts about American politics:

  1. How can we stop the quiet coup now in progress?
  2. Posts about ways to reform America
  3. Steps to political change, and reforming America
  4. Posts about seeing America clearly, in the mirror

(b)  Thoughts about our ability to reform America:

  1. A wonderful and important speech about liberty, 23 July 2009
  2. Can we reignite the spirit of America?, 14 September 2010
  3. Should we despair, giving up on America?, 5 May 2012
  4. Is this the dawn of a new age? Two journalists see the first step to reforming America., 24 February 2014
  5. Pirate Bay points the way to a new political reform movement, 4 May 2014

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17 thoughts on “How the 1% runs America. Runs us. The answer points to 2 futures for us.

    1. dashui,

      These numbers are rough estimates (although often shown with an absurd level of precision), especially for the upper levels where there are small numbers of households and a high incentive (and means) to conceal income.

      The New York Times ran a handy calculator, based on 2010 data. It shows $250,000 as the line for the top 3%. And $383 thousand as the line for the top 1%.

      “not so much”

      You must be kidding. I suggest getting out more.

  1. Nice summary.
    Fascinating to me that as clear as all of this is to me, so many, many cling to the old myths and hopes.
    Hard to accept for so very many citizens.
    There is a new world rushing up behind us , has overtaken many and will engulf all of us quite soon.

  2. I’ve seen a lot of criticism of Amazon lately. Not sure where I stand on the issue.

    I wonder how Chet feels about Amazon. Aren’t they a lean production darling? Isn’t he a lean systems priest?

    1. Lean production means leaning on the peons? More work for less money. Doesn’t it?

    2. John,

      How one feels about Amazon probably depends — for most people -/ on whether one enjoys the low prices and good service OR endured the low pay, poor working conditions, and job insecurity.

      In other words, if you see yourself as an atom OR an American.

    3. Depressing, isn’t it? It’s important, though, to remember that “lean” didn’t start out that way. It isn’t about doing more with less but doing less with less while still accomplishing what you set out to do. If you stop to think about it, that means you’ll produce your product / service in less time, at lower cost, and with fewer defects (among other things).

      The only way anybody has ever figured out to make it work is to ramp up the creativity and initiative of everybody in the organization and harmonize and focus all that to accomplish the purposes of the organization. A mouthful, but I don’t know of a better way to say it. This means that the foundation of lean is cultural, something that the people who invented the system insisted upon.

      Is this what Amazon is doing? I don’t know.

  3. At least during the Gilded Age folks knew what was up – and so they knew that organizing labor could serve as a counter punch.

    1. Pastor,

      That’s a powerful point! We are more like Medieval peasants, under Throne and Robe, unable to an alternative arrangement of society.

      The minds of many Americans have been colonized by this weird libertarian virus. A theatrical to our past, both anti-American (though quite Confederaist) and anti-Christian. Ahistorical and impractical. But turns people into pawns of the 1%.

      Strange times.

  4. Good way of putting it Fabius. I’m a recovered libertarian. It had it’s teeth sunk into me in my early twenties but I escaped.

  5. Perhaps that libertarian virus has been deliberately planted…. by representatives of the 1%, like the Koch brothers? Or am I being too conspiratorial?

    At times like these, it is hard to restrain paranoia because some people and organizations really do have it in for us.

  6. dashui’s comment that an income of $250,000 a year is “not so much” proves fascinating and profoundly revealing about early 21st century America.

    Paradoxically, the superrich in America in 2014 have become so fantastically, gobsmackingly, mind-bogglingly rich, that a merely stratospheric income like a quarter mil per year now qualifies the recipient as barely above blue collar level in the minds of the average citizen. After all, the really rich in America today own their own private submarines…they own their own 757 gets with rotating beds and hot tubs inside…they own houses so large in neighborhoods of London so wealthy that they don’t have time to even visit ’em, and must pay armies of private security goons to patrol their perpetually empty mansions, lest squatters break in. Whole neighborhoods in the wealthiest and most exclusive areas of London and Bel Aire California and Monaco and Rome and France are now full of dark buildings never occupied, owned by the superrich who have no time to visit their opulent vacation mansions.

    If you don’t own a private island and host sex parties with underage hookers at your private mansion, but merely make a few hundred thousand dollars per years, this now qualifies you as a veritable peon in today’s new Gilded Age.

  7. I think this is a pretty good overview. Hopefully there will be a reversal of the trend eventually, I wouldn’t like to see the western world going back to 15 hour working days and a payment that’s going to help you nowhere. Basically it’s all about going back in time to historic working conditions and a generally (much) lower quality of life. It makes me think though, perhaps the past decades in the western world have been too good to be true? After all, a pretty rich middle-class has been a historical oddity rather than the average status quo, at least in a long term historic perspective.

    Goes without saying, if it sounds to good to be true it usually is, provided the egoistic nature of humankind. Maybe what we’re witnessing now is the correction back to the normal state of things, from the peculiar concept known as the “middle class”, and that our perception of this as a “sudden suprprise” stems from the simple fact that most people in this generetion have not yet experienced the (material) hardship of their grandparents.

    And I don’t even live in the US but a country that’s (hopefully) still years away from the demise of the middle class. Yet I’m concerned about the future as the worlds economies are increasingly intertwined, what happens to one social class in a given country will affect others too. Hopefully we’ll all realize the madness before it’s too late.

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