the major flaw of democracy: winners and losers….

rich/poor

Since the start of the pandemic, U.S. billionaires have increased their collective fortunes by more than 70% in just 19 months. From a combined worth of $3 trillion in March of 2020 to an astonishing $5 trillion in October 2021, according to Americans for Tax Fairness (ATF) and the Institute for Policy Studies Program on Inequality (IPS) who analyzed data from Forbes.

The Federal Reserve Board also estimates the current wealth held by U.S. billionaires to be two-thirds more than the $3 trillion in wealth held by the bottom 50% of U.S. households.

At the other end of the spectrum lies poverty which many relentlessly remind us has been cut in half — a statement that will only hold true if the economic benefits during the pandemic are made permanent. Various studies using a diversity of processes concur that poverty reduction during the coronavirus was temporary. The United States began to see increases in poverty higher than pre-pandemic numbers almost immediately after benefits were distributed, according to a number of surveys.

Economically speaking, the outbreak of Covid-19 proved that eliminating poverty can be as simple as putting more cash in people’s hands. Despite the wide-ranging reviews on the topic of such programs, the negative impacts of cash benefits are minimal. Studies have concluded that providing monetary benefits to all but the wealthiest is far more beneficial to anti-poverty efforts than the trivial adverse impact of one less hour of work per week such programs could potentially create.¹ The results of programs such as those afforded to the poor during the pandemic could easily lift millions out of poverty if they were made permanent.²

So why then are the rich getting all the breaks and the poor are still, well, poor?

The answer to that is both simple and complicated.

Take Elon Musk. He likes to jump on Twitter and taunt the people’s will in the United States. You know, that democracy people live by where they’re demanding that the wealthy pay their fair share of taxes? Yeah, that one. Musk enjoys mocking how society in the U.S. operates. From market manipulation to acting as if he is somehow the victim of the people who simply want him and others like him to pay his fair share, Elon Musk is but a jester among elites who enjoys his position at the top.

Armed with a battalion of lobbyists fighting for him at every turn, Musk’s wealth grants him a level of power afforded only to the richest in the U.S. Jeff Bezos, Mark Zuckerberg, Bill Gates, former politicians, defense contractors, and but a few others all benefit from the same privileges of being subsidized by taxpayers. Corporate lobbies hand out money like candy on Halloween in an effort to convince representative lawmakers to implement policies that benefit only them.

American oligarchs

An oligarchy is defined as “a small group of people having control of a country, organization, or institution,” which by all accounts defines the United States. If the U.S. is an oligarchy, then that makes the wealthy elite oligarchs, “rulers in an oligarchy,” as defined by Oxford Languages. In addition, while these companies are technically not monopolies, they do fall under the category of oligopolies. An oligopoly is when you have “a state of limited competition, in which a market is shared by a small number of producers or sellers.” Think Walmart and Target. Oil companies, big media, car manufacturers, and megacorporations — conglomerates controlling multiple markets.

You may also define the U.S. as a plutocracy since it became “a government by the wealthy” when the Supreme Court ruled in 2010 that corporations can spend unlimited amounts of money on elections. In what is known as Citizens United, the Court declared that limiting “independent political spending” through campaign finance rules was a violation of free speech, thus allowing the unfettered flow of money into politics from outside groups.

“The United States is an oligarchy. There’s no better way to describe it.”

It could be argued that one led to the other or it could be debated that outside influence over U.S. politics grew during the era of President Ronald Reagan (it did). The actor and corporate spokesperson took his reality-TV-styled marketingskills to the White House, enlisting former bosses to help advise him on domestic policy. Regardless of where it began, political influence with truckloads of cash is how the rich get richer via social programs by different names: subsidies.

For example, farmer subsidies benefit corporate-owned farms more than they assist the small farmer. Small farmers are then forced to operate under the rules of the oppressive oligopolies that control nearly all industrialized agriculture in the U.S. They not only control what the farmer feeds their livestock, how much farmers are paid, and how small farms operate, but they control the logistics as well — leading to lower pay for truck drivers.

It’s also worth noting that many of the corporations holding dominion over small U.S. farmers are foreign-owned. Yes, foreign-owned companies receive billions each year from taxpayers.

In addition to the benefits, big corporations also make it harder to achieve the American dream by overvaluing markets such as housing, energy, fuel, and food. Making it more difficult for the average American to get by. Megacorporations are conglomerates that have ownership interests across various markets leading us to a society that subsidizes the wealthy with every purchase. We then subsidize those same corporate stakeholders with taxpayer dollars.

While fiscal conservatives convince you that poor people and social programs are the problems, the real “welfare queens” are the Musks, the Bezos types, and the Brazilian meat companies of the world. It’s not just corporations either. There are approximately 745 billionaires in the U.S. today that financially benefit at a great cost to taxpayers on multiple fronts due to the rich-people-friendly U.S. tax code Musk likes to mock so often. The U.S. tax code is, in fact, a mockery.

The United States is an oligarchy. There’s no better way to describe it.

Negative impacts on society

When you have only four multinational companies in control of your food supply, they can essentially hold a country hostage until they get what they want. They control pricing over food products that allow them to keep prices as low as possible, but that same power can be used for influence over elected lawmakers. Since these companies own land or have a presence in virtually every district in the country, they can influence many elected officials and many elections as well.

Farms aren’t the only industry that operates this way. Many industries do. Media companies, for example, are structured in a way that gives corporate majority stakeholders control of multiple companies. Fund managers who profit from the outrage on Fox News are the same people who profit from speculating you to death on MSNBC. They don’t care what you watch or what your beliefs are. They care only about the value of their investments and to be as profitable as possible through advertisements promoting their other interests.

“From farm subsidies to the Export-Import Bank, special interest feeding frenzies are still the norm throughout government.”

Essentially, three firms own corporate America. Vanguard, BlackRock, and State Street have $11 trillion in assets and are the largest shareholders in 40% of all publicly listed companies in the U.S. According to a recently published paper by the American Economic Liberties Project, BlackRock, State Street, and Vanguard own a combined 88% of S&P 500 companies. For example, the “Big Three” also hold managing stakes in corporations such as Apple, JPMorgan Chase, and Pfizer. As they promote content to get us hooked on big media, they’re also promoting the myriad products they have majority stakes in.

It’s a level of concentrated power equivalent to three-quarters of the U.S. economy. That much control gives them unadulterated dominion over the population at large while being subsidized by the same people they wield authority over.³ In 2018, Doug Bandow, of extremely right-wing the American Conservative, provided commentary to the Cato Institute saying, “From farm subsidies to the Export-Import Bank, special interest feeding frenzies are still the norm throughout government.”

Bandow’s statement continues to hold true today. Only fewer benefit from it. The rest are left to fend for themselves or die in a society that has only been made more difficult to succeed in — unless you have a trust fund. Everything we need to buy in order to survive creates wealth for a few people in society. They control profits by deciding how much we should pay to live. Toll roads, telecom fees, internet access fees, food, fuel, energy to power our homes, and everything else owned by the very few adds to our everyday costs while lining the pockets of the wealthy elite.

Those who control everything have an outsized financial influence over elected officials. We see it happen every day. Even the current infrastructure package stands to benefit the wealthy more than anyone else. Sure, it will help the poor and marginalized some. But, it stands to create more wealth for the already wealthy by using fees and tolls to access the infrastructure we’re paying to build. It certainly doesn’t seem to do much to stop gentrification.

Meanwhile, many of us would be lucky to get a shoveling job on a highway construction project.

Who it hurts the most

While it’s clear that subsidizing corporations with lavish gifts as they reap record profits is deeply problematic, it looks much worse when weighed against the positive impacts that money would have if it were better spent on poor communities. But, if money talks in Congress and corporate entities can outspend us, then it’s no wonder popular policies such as single-payer health care, free college, and a pathway to citizenship for migrants haven’t become law.

When citizens of the United States make their views and voices heard, politicians ignore them because lobbyists are in their ears every day. Unless citizens did that en masse, we don’t stand a chance at doing democracy right and the poorest will continue to suffer as we creep toward a dystopian future of corporate control of our everyday lives. Their goal is to make us dependent on them so they can continue asking for more money to create jobs. Yet, while they’ve gotten all the tax breaks they’ve asked for. Instead of creating jobs, they use that money to buy back stock and control more wealth.

We’re talking about a process that hasn’t worked since the implementation of trickle-down economics during the Reagan era. While these policies impact poor people as a whole, it should come as no surprise that they affect Black and Latino communities even more. Whether it’s intentional or not, it speaks to the structure of the systems that operate the U.S. government. Those that write the laws control the levers of power. And those that typically write the laws aren’t our lawmakers. They’re lobbyists.

Corporations and special interest groups write many of the laws we see today. At a minimum, it’s clear they have a say and the people are at their mercy. Unless we remove money from politics, lawmakers have little reason to listen to the people when there is so much influence from the Good Ol’ Boys club in Washington D.C. A club that provides access to great wealth and opportunity outside of their jobs as elected representatives.

From speeches for hundreds of thousands of dollars to insider trading that makes them millions of dollars throughout their careers, there are many benefits for lawmakers if they play ball, so to speak. It’s clear that the motivations of most politicians revolve around self-preservation and self-interests. While concern for the nation may be somewhere in the back of their minds if they don’t see the harm in cavorting with billionaire elitists and pocketing a little cash in the process, what motivations will they have to stop working for them and start working for the country?

So why do the rich keep getting richer?

Simple answer: because lawmakers let them and most Americans just shrug their shoulders.

https://momentum.medium.com/the-united-states-is-being-robbed-309c9001efa9

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By Gus Leonisky at 18 Apr 2022 - 8:55am
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the price of bread….

Video reports on national TV channels and the Internet about half-empty supermarket shelves in the US and Western Europe are causing widespread nervousness about the world’s food security prospects. Despite warnings from Moscow, no one in Europe took into account that with the introduction of provocative Russophobic sanctions, designed to cripple the Russian economy, essential goods would disappear overnight from the shelves in even the developed Western countries, accompanied by a rapid rise in prices. The surreal pictures of food shortages, even in well-fed Europe, are more than just bewildering, especially given the European Commission’s deliberately politicized refusal, pushed by the United States, to buy Russian mineral fertilizers, the blocking of road freight and closing of ports to Russian goods, as well as the breaking up of well-established trade links. It is particularly noteworthy that the US itself has removed many provisions of the anti-Russian food sanctions, in particular on the import of Russian fertilizers!

Under these circumstances, many countries have decided, despite “political directives from Washington,” to manage their own food programs, including by deepening cooperation with Russia. Egypt, in particular, is one such country.

As is well known, Egypt is the world’s largest wheat importer and Russia is one of the largest wheat exporters in the world. In this context, Rashad Abdo, president of the Egyptian Forum for Political and Strategic Studies, believes that the Egyptian-Russian partnership in grain trade and storage is a very important step in achieving food security in Egypt and the African continent. Egypt depends heavily on Black Sea wheat because of its quality, cost and proximity. The Egyptian flour milling industry is very used to Russian and Ukrainian wheat, Cairene trader Hesham Soliman said. “They’ll always give it priority as long as it’s available,” he said. But private sector purchases of wheat from alternative suppliers continued despite higher prices, traders said. In 2021, Egypt imported about 80% of its wheat from Russia and Ukraine. However, after Moscow launched a special operation to demilitarize and denazify Ukraine on February 24, wheat importers to Egypt faced record high prices, payment complications due to sanctions against Russia and disruptions in shipments of Black Sea wheat, especially from Ukraine.

In March, Egypt took steps to increase grain imports from Russia, despite the start of supply and payment disruptions, in particular the reluctance of some banks, under US pressure, to finance wheat imports from Russia. Nevertheless, in March wheat shipments to Egyptian ports increased by more than 80%. In particular, Egypt received 479,195 tons of wheat from Russia, 24% more than in the same month last year, according to freight figures released by Reuters. Ukrainian wheat imports reached 124,500 tons, down 42% year-on-year.

However, in addition to importing foreign wheat, Egypt also grows a significant amount of grain itself. In 2021, for example, Egyptian farmers harvested 3.5 million tons of wheat. In these conditions, Cairo is paying serious attention to renewing its agricultural machinery fleet to ensure the sustainability of the agricultural sector. For example, as a result of a public tender held by the Egyptian Ministry of Agriculture in December 2021, a significant batch of Russian agricultural machinery made by Rostselmash was recently delivered to Cairo: 15 ACROS 595 PLUS and 1 TORUM 785 complete with grain harvesters for corn harvesting. These machines will already be deployed this April in Egypt’s strategically important desert reclamation program in the Toshka Lakes region. The Egyptian agricultural authority has taken into account the previous successful experience of the Russian manufacturer’s machinery, which has been supplied since 2020. The combine harvesters have proven their worth in difficult agro-climatic conditions, and the quality and reliability of all their systems have stood the test of working on sandy soils. It is also important for the agricultural sector in Egypt that the supply of machinery is backed up by a quality service.

However, due to the turbulence on the world grain market and the uninspiring predictions of some experts and international organizations about the possibility of world hunger this year, Egypt is thinking about finding additional suppliers of grain from European countries by announcing a new call for tenders for food purchases in Europe. To feed its 105 million people, the Egyptian government has stepped up efforts to secure grain and other food supplies and is developing plans to allow the purchase of wheat outside the tender system to support procurement. To this end, in particular, a delegation from Egypt recently visited India to discuss the potential supply of wheat from the South Asian giant.

As is well known, state imports of wheat are the cornerstone of Egypt’s bread subsidy program for millions of people, and rising prices are putting increasing pressure on public finances. Wheat is a staple food in the region, but the current rise in food prices comes at a time when the Muslim world is celebrating the holy month of Ramadan. Wheat prices in Paris and Chicago, for example, have risen considerably in recent days, with wheat futures in Chicago jumping 46% since the beginning of the year. This makes countries dependent on grain imports particularly vulnerable and the situation of people in the Middle East and North Africa very difficult. However, Cairo is aware that the West is unlikely to offer Egypt or any other country food at prices below those in Russia should the situation on international markets deteriorate due to the ongoing Russophobic sanctions.

In this context, Egypt has requested support from the International Monetary Fund (IMF) for a comprehensive economic program and food security. At the same time, Egypt set a fixed price for unsubsidized bread in an attempt to counteract rising food prices, in the hope of preventing social problems and unrest in the country.

Vladimir Odintsov, political observer, exclusively for the online magazine “New Eastern Outlook”

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By Gus Leonisky at 18 Apr 2022 - 9:29am
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mega-trillion afloat….

For decades, a secret army of tax attorneys, accountants and wealth managers has been developing into the shadowy Wealth Defence Industry. These ‘agents of inequality’ are paid millions to hide trillions for the richest 0.01%.

Russia’s invasion of Ukraine, and the economic sanctions it’s elicited from Western countries, has generated much discussion of its oligarch class — symbolized by yachts and expensive properties in Europe, America, and throughout the world. What is the extent of oligarchy in Russia? What strategies do Russia’s economic elite use to hide their wealth? And how, if at all, can they be distinguished from their Western analogues?

To explore these questions, Jacobin’s Luke Savage spoke with Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies and author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions.

In this book, inequality expert Chuck Collins, who himself inherited a fortune, interviews the leading players and gives a unique insider account of how this industry is doing everything it can to create and entrench hereditary dynasties of wealth and power. He exposes the inner workings of these “agents of inequality”, showing how they deploy anonymous shell companies, family offices, offshore accounts, opaque trusts, and sham transactions to ensure the world’s richest pay next to no tax. He ends by outlining a robust set of policies that democratic nations can implement to shut down the Wealth Defence Industry for good.

This shocking exposé of the insidious machinery of inequality is essential reading for anyone wanting the inside story of our age of plutocratic plunder and stashed cash.

ABOUT THE AUTHOR

Chuck Collins is a senior scholar at the Institute for Policy Studies in Washington, DC, where he directs the Program on Inequality and coedits Inequality.org. His previous books include Born on Third Base and Wealth and Our Commonwealth (with Bill Gates Sr.)

TABLE OF CONTENTS

Table of contents:Acknowledgements

Foreword: Nicholas Shaxson

Prelude 1983: Discovering the Money River

Prelude 2004: The Blue Hippo Swindle

Prelude 2020: The Theft of Angola

Introduction

Chapter 1: The High Cost of Hidden Wealth

Chapter 2: Who Are the Wealth Defenders?

Chapter 3: Tools in the Wealth Hiding Toolbox

Chapter 4: All in the Family Office

Chapter 5: The Wealth Hiding in Your Neighborhood

Chapter 6: Directly Engaging the Wealth Defense Industry

Chapter 7: Solutions to Wealth Hiding

Conclusion: A Time for Bold Action

Epilogue: Grads, Don’t Work for the Billionaire Wealth Defense Industry

Reading and Resource List

Notes

REVIEWS

“It is no great surprise anymore that we are facing the greatest crisis in income and wealth inequality that we have seen since the 1920s. What is shocking is the sprawling system of corruption that the ultra-rich have designed in order to hoard their unimaginable wealth at the expense of everyone else. Chuck's book reveals not only the inner workings of this elaborate scheme to hide more than $20 trillion in wealth, it offers us a blueprint for reversing this obscene inequality so we can take back our democracy and ensure that our government works for everybody—not just the billionaire class and wealthy campaign contributors.”

Senator Bernie Sanders

“This book, a primer to the secrets of the money river, is an essential reformers’ handbook for navigating these dangerous times now facing us – and future generations.”

Nicholas Shaxson, author, The Finance Curse and Treasure Islands

"Skillfully blends personal narrative with social scientific research to create unique insights into a world of privilege that is ordinarily out of sight and out of mind for the rest of us."

Brooke Harrington, Professor of Sociology at Dartmouth College. Author, Capital without Borders: Wealth Managers and the One Percent

“The Wealth Hoarders reveals that a whole parallel world exists in which the rich and powerful enjoy the freedom to avoid not just taxes but all kinds of laws they find inconvenient. Accepting the existence this parallel world means putting democracy at risk.”

Frederik Obermaier, author of The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money

“This vital and expertly written book reveals the epic scale of theft occurring legally and in plain sight. Theft that destroys public services, removes access to housing and for which the poorest pay the highest price. The authors reveal how the fountain of wealth gushes ever upwards, we are all paying the price, some of us with our lives, as the wealth defence industry siphons off trillions. Chuck Collins is tireless in his determination to uncover the vicissitudes of the extremely wealthy. If you aren't already angry about inequality, then read this book. If you aren't angry enough to take action by the end of it, then you either work in the WDI or you are one of the 0.1 per cent.”

Dr. Wanda Wyporska, Executive Director, The Equality Trust, UK

“Chuck Collins shines a light on the powerful and pervasive “Wealth Defense Industry,” showcasing what it is and how it is entrenched in the ‘ecosystems’ that perpetuate the growing and harmful inequality of our time, and that the COVID19 pandemic has further unveiled. Collins brings his exceptional research, insights and experience to this informative piece that not only underscores the urgency for real systemic reform to reverse what can be an avoidable race-to-the-bottom, but helps unpack key leverage points for real change.”

Abby Maxman, President and CEO Oxfam America

“Chuck Collins reveals how the superrich are different than the rest of us. While government takes out taxes before we get paid, the wealthiest avoid taxes with trusts, evade taxes with help from tax haven governments and escape the IRS because Congress hobbles tax law enforcement. Collins, who rejected the privilege of his birth, explains in plain English how wealth hoarding works and shows how we can stop this costly corruption.”

David Cay Johnston, Pulitzer Prize winning journalist and author of Perfectly Legal and Free Lunch

“Once again, Chuck Collins proves that building a better world is well within our reach. There is more than enough money to fund the societal transformation needed for equity, well-being, and a safe climate. It’s just hiding in the wrong places. With The Wealth Hoarders, we now know where to look.”

May Boeve, Executive Director, 350.org

“Collins gives us a rare insider’s view of the hidden wealth of the 0.1% and how the Wealth Defense Industry maintains inequality. This helps explain how concentrated wealth results in mass asset poverty and the path to building an economy that builds wealth for all, not just the wealthy.”

Dedrick Asante-Muhammad, Neighborhood Reinvestment Coalition of America

“Chuck Collins’ Wealth Hoarders provides an invaluable perspective on the Architecture of Inequality. Through personal insights and thoughtful research he documents the extraordinary sums of hidden money in financial secrecy jurisdictions. Most importantly, he sets forth a realistic blueprint for essential reforms that can inform our strategies and actions as we work towards real economic justice and security.”

Conrad Martin, Executive Director, Fund for Constitutional Government.

“We won’t be able to effectively tax billionaires if they are hiding trillions in dynasty trusts. This useful book explains how to shut down the hidden wealth system in order to build a fairer tax system."

Frank Clemente, executive director, Americans for Tax Fairness

“Join inequality expert Chuck Collins in his riveting investigation of the secret world of the “Wealth Hoarders,” who are paid by the world’s richest people to protect private wealth. For years, I have used Collins’ books to teach my students about the hidden world of untouchable wealth, because nobody else writes so electrically and entertainingly about global plutocracy. In this book, Collins tracks down trillions of dollars that can be used to replenish our “common wealth” and solve our greatest justice crises.”

Charles Derber, Professor of Sociology, Boston College, author of Moving Beyond Fear and Glorious Causes.

“We can’t have a fair tax system while millionaires and billionaires are hiding trillions of wealth in the shadows. This book is essential to fixing our broken tax system.”

Erica Payne, cofounder and president, Patriotic Millionaires and author of Tax the Rich

“Everyone should read The Wealth Hoarders to understand the secret world of the super-rich. Chuck’s painfully beautiful description of the Wealth Defense Industry lifts the veil to this intricate, maniacal ecosystem set in motion centuries ago and provides critical truths to help us all decolonize wealth.”

Edgar Villanueva, author, Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance

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By Gus Leonisky at 18 May 2022 - 9:41am
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