It has been nearly half a decade now since the “Lion of the Senate” fell silent. Ted Kennedy, tribune of the people, could be relied upon to take the senate floor and thunder at the forces of avarice and gluttony. Confronted with economic injustice he would bellow “When will the greed end”? The answer, of course, is that it never ends; but it is the purpose of government–this government-- to reign in on it.(1)
To put things into perspective, Bill Moyers recently posted on his website “Moyers and Company” an essay written by Paul Buchheit in November, 2014 entitled “Infuriating Facts About Our Disappearing Middle Class Wealth” revealing a number to telling and troubling statistics.
According to data from the Credit Suisse Global Wealth Databook, for instance:“Each Year Since the Recession, America’s Richest 1 percent Have Made More Than the Cost of All US Social Programs”. The lowest estimate of the amount the top 1 percent raked in (2.3 trillion annually) “is more than the budget for Social Security (860 Billion), Medicare (524 Billion), Medicaid (304 Billion), and the entire Safety Net (286 Billion) for SNAP, WIC, [Women, Infants and Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families and Housing”. In fact the top 1% are raking in, at the lowest estimate 115% of the entire social services budget, and that’s the best face one can put on it. At 5.7 Trillion Dollars annually, (the highest estimate by the study) the richest 1percent take home over two and a half times as much (285%).
Moreover, according to the article, almost none of this wealth led to technological innovations or jobs. “Over 90 percent of the assets owned by millionaires are held in low-risk investments (bonds and cash), the stock market and real estate. Business startup costs made up less than 1 percent of the investments of high net worth individuals in North America in 2011. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class.” (2)
“On the corporate side,” the report continues, “ stock buybacks are employed to enrich executives rather than to invest in new technologies. In 1981, major corporations were spending less than 3 percent of their combined net income on buybacks, but in recent years they’ve been spending up to 95 percent of their profits on buybacks and dividends.” (2)
In addition, as has been widely reported elsewhere, in the United States 47 wealthy individuals own more than 50% of the country’s population or about 60 million households with median wealth below “about $53,000.”
It is no wonder that the middle class now controls less wealth than at any time since the 1920's and is rapidly losing political power as the moneyed interests take over the electoral process in the wake of the Supreme Court’s “Citizens United” decision. It is increasingly possible for the ruling elite to force through widely unpopular initiatives because they can rely on vast sources of campaign financing as the ‘money’ buys the elections. With reckless impunity the ruling elite, insulated from public fury by fat campaign chests and gerrymandered districts, are daily busy turning the screws; assaults on Social Security, Medicare, Medicaid, the Safety Net, or pushing through trade agreements that promise yet another savaging of the middle and lower classes. Increasingly nothing stands between the trough and the swine.
As wealth gets concentrated into fewer and fewer hands; as this wealth is increasingly used to feed only itself, the question remains where will it end? The answer to this question is that we know where it will end, we have been there before. It’s a place called “Hooverville”.
1. James Madison arguing for the adoption of the U.S. Constitution in Federalist No 10 said that one of the benefits of creating a large federation is that the country is less likely to be dominated by one economic interest, or a small group of economic interests. He also argued elsewhere in the Federalist Papers that the single most important reason to adopt the constitution is to regulate commerce.