“A third threat [to a plutonomy] comes from the potential social backlash. To use Rawls-ian analysis, the invisible hand stops working. Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Pluto- participant. Why kill it off, if you can join it? In a sense this is the embodiment of the “American dream”. But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich.
Could the plutonomies die because the dream is dead, because enough of society does not believe they can participate? The answer is of course yes. But we suspect this is a threat more clearly felt during recessions, and periods of falling wealth, than when average citizens feel that they are better off. There are signs around the world that society is unhappy with plutonomy – judging by how tight electoral races are. But as yet, there seems little political fight being born out on this battleground.”
From page 24 “Plutonomy: Buying Luxury, Explaining Global Imbalances” published by Citigroup
The above quote was taken from a leaked memo that came from Citigroup, the parent corporation of, among others, Citicards and Citibank. It is one of the Four Big Banks in the Unitied States. If you make less than a million dollars per year then you are not supposed to read those words. This memo was written by analysts at Citigroup because they believe that the U.S. is a plutonomy. A plutonomy is a state/nation ruled by the wealthy.
For most people, my father, for example, if you tell them we live in a Plutonomy they will scoff and wax misty-eyed for the red, white, and blue, insisting this is a democracy. The only people that still think we live in a democracy anymore only believe that because, as the above quote points out, they think they have a shot at being super rich, or maybe even just rich.
But, Citigroup, and the other financial giants, know that you can’t. This memo, and others like it, point out that the last several decades have seen the income inequalities widen and they forecast that these inequalities will not only continue but will grow.
People who defend the current policies that are championed by the Republican Party are as delusional as that guy who buys lottery tickets every week and dreams of being super rich. The reason it works, though, is because they can point to anecdotal evidence of that one guy who one day got rich. And, it’s a good thing the Bush Tax Cuts were in place so he can keep more of his money! The thinking goes, “When I’m rich, I want to keep that money, too. So, I will support policies that don’t benefit me now, but they might later if I get rich.” It’s the same principle that keeps slot machines in casinos. People will pay for the chance to be rich.
In California, we have Proposition 30 coming up for vote on the November ballot. Realistically, this should pass with overwhelming support. Why? It taxes only those couples making over $500,000 per year. My family makes a 1/4th of that, give or take. I don’t think I personally know anyone who makes 1/2 a million dollars a year. Do you? Why wouldn’t you support levying taxes against those who can afford to give more?
One reason might be that you listen to mouthpieces for the 1%, the financial elite, such as Rush Limbaugh or almost anyone on Fox News. You might believe them when they refer to those people as “job creators” or that if we tax them then they will leave and stop giving to charities. Or whatever excuse they give. The problem with that is, if that were true, then why don’t we have more jobs right now? Their incomes are at all-time highs and their taxes are at record lows.
Read the Citigroup memo and you’ll see why. The super rich, the 1%, doesn’t care at all about you. You are a number, a statistical threat to their wealth. The vast majority of Republican politicians and media mouthpieces, the ones most stridently screaming about increasing taxes (besides the completely delusional Tea Party puppets) are part of the 1% themselves. They know that YOU are the biggest threat to their wealth. They know that as long as they can keep you thinking that you have a shot at joining them then they can keep their wealth.
Why am I singleing out the Republican Party? Are the Democrats blameless? No. The Republican Party is just the most obvious about it. Hilariously, though, President Obama is acting more like a Republican than the traditional stereotypical Democrat should. Republicans would have you believe he has raised taxes like it was going out of style, but it’s not true. But, I tend to think that if the Republican party can be brought to heel that Democrats might realize they need to get back to doing what they were supposed to be doing in the first place: restoring balance and equity.
Consider this, how much wealth does anyone really need? What I am suggesting is that the super rich need to pay more and that we all probably ought to pay more. In the last 11 years of my career as a teacher I have watched an educational system being dismantled, mostly by defunding it. More recently, they are attacking teachers and demonizing them. There are at least two possible reasons for these concerted efforts to remake our educational system. One might be that they are stupid and inept and unable to see what an awful job they are doing. Or, it might be there is a profit to be made by doing so. Two things come to mind: one is that there is a metric shit-ton of money going through education all the time, and the other is that people who are uneducated are much easier to govern and exploit.
In reading The Narrative of the Life of Fredrick Douglass, I was struck by the fact that it was illegal to teach a slave to read or write. It makes devious sense. If you can keep someone ignorant, then you can control them easier. In learning to teach English, I have learned that writing is thinking. We write down what we think and we read to see what others think. Today, it is illegal NOT to teach someone to read and write. So, if you are in the business of profiting from the masses, what do you do? If you are super rich and you want to keep as much of that money as possible, do you help fund public education? No, you call for charter schools, demonize and defund public education, offer one unhelpful “reform” after another to keep teachers busy jumping through hoops, rewriting curriculum, and meeting quotas. Why? Because stupid, ignorant, uneducated people are less likely to vote, and when they do vote, they are more likely to do it based on emotion instead of information.
So, how much money do people really need? Mitt Romney has a net worth of $200 million. But, he can take a tax credit of $77,000 for dressage for his horse? Some people live on $77,000! But, apologists will say, this is legal. He’s not breaking any laws! I will grant you that. But, I will respond, is it right? Is it moral? And, is this the kind of person we want leading our country? I feel that if you have $200 million to your credit that you don’t need a $77,000 write-off. This is a man who thought making a $10,000 bet on stage with
John McCain Rick Perry was a good idea. You see, people like Mitt Romney, the 1%, care so little for you and I that they don’t even realize how different their lives are. To win $10,000 for most people would be amazing! I would love that! I could do so many things with that kind of money! But, for Mitt Romney, that’s beer money. That’s money you don’t really need so you can spend it frivolously.
I wouldn’t spend it frivolously. I would very soberly, solemly, buy a new bike, probably made of carbon fiber and with Ultegra components. Or, I would pay my bills. Okay, probably the latter. Sigh. Carbon fiber.
Mitt Romney could pay off my student loans and not even flinch. I will be making payments on them until I am 70. This is my fault, I admit. I am very poor at understanding math and things like capitalizing interest. But, it still burns to think that people like Romney exist, taking advantage of the rest of us. And, worse, this is the same Mitt Romney that is against the government giving away things. You mean like the government giving you back taxes you owe because you play a sport with your horse? Is this guy for real? There are a few options: one is that Mitt Romney is delusional. I say that is unlikely. Another is that Mitt Romney is not aware of his hypocrisy. That is possible. Another is that Mitt Romney knows full well that he is benefitting from what he would deny to you and he doesn’t care. I think this is most likely true. Why? Because the rich got rich by exploiting others.
“I hear all this, you know, ‘Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own — nobody.
“You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.
“Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”
Did the rich pay, too? Yes, but not enough. Not as much as they’d like you to think. How much should they pay? I don’t know. More. I think if you are super rich, you should be paying a much greater percentage of your income than I do, that’s for sure. I paid something like 22% of my income last year into taxes. How much did Mitt Romney pay? Or Warren Buffet? They both pay somewhere around 15% or less. That means they pay a smaller percentage of their vast wealth than I do. Romney gets tax cuts that are equal to my salary. Personally, I think that’s nuts.
But, that’s what happens in a plutonomy. That’s what we live in. The difference between me and people that scoff at this is that I know I will never be super rich. I know I am never going to join the plutocrats. And, I’m not in favor of protecting them anymore. Why? Because they aren’t in favor of protecting me, or the rest of the middle and lower class earners. They don’t care about me, except in proportion to how much of a threat I am to their earnings. And, if you are making less than $500,000 per year, they probably don’t care about you, either. Like the corporations they own and run, they care about how much money you can make for them.
The easiest thing to do is ignore this. Keep voting for politicians that help the rich. Keep voting against taxes on the rich. Keep defunding schools. Keep defunding public services. Let the private sector take over. Buy into the myth that the private sector will do it more efficiently and better. (Really? Have you seen what the private sector does? Lower quality, higher costs, lower wages, higher profits. Go to the grocery store, the department store and tell me it’s not true. Tell me products today are better than they were fifty years ago.)
Ronald Wright, in A Short History of Progress, paraphrased John Steinbeck, writing, “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires.” (This is often attributed as a direct quote by Steinbeck, but appears not to be.)
It is extremely unlikely that I will ever be a millionaire. Will you? Isn’t it about time we started making the United States a great country to live in for everyone, not just the super rich? Isn’t it about time that education in the United States was really and truly available for everyone? Isn’t it about time that anyone who needs medical care can get it, that our highways were maintained properly, that high speed rail was a reality across the country, that our National and State Parks were properly protected and cared for? I think it is. I think it is high time that people realize which side they are really on. I think it is time for people to demand that the 1% shoulder a greater share of the burden because they enjoy a greater share of the profit. I think it is time for the 99% of us to realize that they are not on our side, they are not helping us, and they are laughing behind their hands at us.
Read the Citigroup memo and tell me that the rest of us are anything but a resource to exploit.
I think it is time that we stopped doing what is legal and started doing what is right. I think it is time that we started asking ourselves if what we do is helping others or hurting them. I want to live in a world where people do what is right and good and get rewarded for it, not fired. I think it is time that people stop being distracted by red and blue, white, brown or black, and start focusing on their common humanity. Do not ask yourself if it is legal. Ask yourself if it is good for you and for others. Ask yourself if you are benefitting from the pain of someone else. Then, when we are doing these things, living our lives this way, then those who would exploit others, hurt others, will stand our starkly in the light of our justice and be revealed. Then, they will either cease their evil, or be alienated of their place in our society.
I think it is time that the United States become a place where the American Dream comes true, that people have a chance at life, liberty and the pursuit of happiness that is real, and not just a carrot dangled at the end of a treadmill that churns out profits for corporations. It is time that we stop looking for more and start asking if we have enough now. It is time that we end the plutonomy and bring the United States back to the representative democracy that it was meant to be. Of the people, for the people, and by the people.
(Yes, I know it’s huge rant, idealistic, polarizing, and maybe some would claim demagogic. I have thought this often, but not posted something like this. Today I changed my mind becuase it’s my blog and I can say what I like on it. If you don’t like it, don’t read it and go write your own blog. To some degree, it is inspired by The Newsroom because I tend to agree with the idea that we are being lied to, that what is important is not what people are talking about and thinking about, and that this country is not the greatest in the world… but it can be.)