Sacred Cows, Vol. 2: The Government is not the problem.

The aging former Hollywood star stood before the crowd, projecting the air of resolute determination which had buoyed his candidacy and which would ultimately become part of his legacy.   It was January 20, 1981, the date of Ronald Reagan’s inauguration.  In his address, he proclaimed, “In this present crisis, government is not the solution to our problem; government is the problem.”

Although not the first proponent of what conservatives would call “small government”, Reagan was the first president to explicitly mainstream the notion that the institution which he was part of – the government of the United States of America – was in fact inimical to the interests of most Americans, and was, disproportionately, the source of their suffering.  Reagan went on to be almost deified by the Republican party, particularly after his administration had come to an end, and his anti-government rhetoric became a rallying cry for generations of Republicans to come.

Over the course of years, as the Republican party has shifted ever to the right, embracing harsher and harsher hard-right policies, the anti-government rhetoric would get more and more vitriolic, to the point where Republican electoral districts were electing Senators and Congressmen to positions which paid them handsomely for their efforts to dismantle the government, essentially furthering an ideological agenda which was arguably contrary to what their constituents sent them to Washington for: to represent their interests.  The party ended up in this position after decades of rhetoric vilifying government.  Most of those constituents never realized the game that was being played.  The weakened government was all to the benefit of moneyed corporate and individual interests whose excesses might otherwise be reigned in by regulation and watchful oversight.

As of 2017, there is a much more than trivial element of the party who believes, heartily, that they must arm themselves for an eventual revolution against a tyrannical, overreaching government. Revolutionary War slogans and flags have been resurrected by the Tea Party Movement.  The right to bear arms is to many, rightly or wrongly, a necessary backstop against creeping totalitarianism by the government, and the government formed by the Constitution they proclaim to hold dear is, in fact, their greatest enemy.

Conservative talkers and pols routinely refer to government in negative terms. They use catch phrases such as bureaucracy, red tape or “big government” – as if a small government is a possibility in a nation as vast and populous as the United States.  They see government as an insidious plot to rob them of the hard-earned fruits of their labor.  They see it as a monolithic menace that intrudes into their private affairs.  Some even see it as a ubiquitous conspiracy to deny them fundamental rights. There has always been an element of apathy and cynicism in the ordinary citizen’s outlook on government but seldom has it risen to such epidemic proportions as it has today. Where does this cynicism come from? Is this cynicism justified?

I would assert that anti-government ideology is not justified, historically or factually. What has been lost in a decades-long campaign of vilifying government is a realistic assessment of what has brought us the most success as a nation in the past.  If we look at the actual experience of the United States, it is clear that the most prosperous period of economic growth and the greatest increases in our standard of living all came during the post-WWII years.   In this era,  higher taxes than the current tax code provides for led to an active government pursuing large infrastructure projects and funding various areas of research and development which would ultimately bear fruit for the private sector of the economy.  There was greater parity between the pay of workers and the pay of CEOs and executives, and the benefits of the economy were broadly shared, resulting in an era of prosperity and security which many now look at as the “good old days.”  In this era, a functioning and synergistic partnership between an active, adequately funded government and the private sector drove incredible gains in standards of living, not only in terms of household income and quality of life, but in areas such as life expectancy and health outcomes.

While all of the above demonstrates that there is a great deal of falsity to the standard anti-government rhetoric emanating from the GOP, and particularly its far-right libertarian faction, it is increasingly hard to ignore the real problems with American government. It is not my position that there is nothing wrong with our government, but by and large, those problems are not what conservatives say they are.

It is simply not true that government grossly overtaxes us, as compared to many other industrialized societies, or that bureaucracies are inherently wasteful. Nor is it true that Big Brother is threatening our freedoms and establishing a tyranny – in fact, I would argue that narrow private interests are the biggest threat to our national well-being.

The main problem with our government is simply that it is not as democratic as it should be, or professes to be. In the present day, government is most easily characterized by its responsiveness to special interests and not the public interest. Increasingly, Americans are frustrated with a system in which certain organizations and individuals have a disproportionate and unfair influence over what the government does and the laws it enacts. The result is that the power and greed of the few too often win out over the needs of the many. This has led to populist sentiment – although one might argue that the electorate has acted on that sentiment in precisely the wrong way.  Donald Trump ascended to the presidency with false pledges to “drain the swamp” by removing these undue influences – only to betray that promise by appointing a cabinet full of lobbyists and insiders whose allegiance to the same special interests that hold sway over the public sphere is beyond question.

This problem is getting worse, and has reached frightening proportions under the present administration.   If a government is bound to the interests of a small group, it by definition cannot act in the public interest.  The more it favors the interests of its wealthy clients and donors, the less likely it is to act for the greater benefit of the citizenry.

Most of the notable achievements of the government during the Progressive Era occurred because the government was reacting to demands made by the public to deal with serious social and economic problems. If we as a people are serious about our desire for the government to act as a force for good in society, the government needs to be as democratic as possible.  Therefore, we need to clearly understand why our government is falling short, and realistically look at what it will take to fix it.

In polls, a clear majority now says that “the government is run by a few big interests looking out only for themselves.” This “government of the few”, ironically, is what has fueled the anti-government sentiment which the GOP has leveraged to win at the ballot box.  Too few have figured out that the Republican party of the present day is absolutely ruled by corporate interests and wealthy individuals who demand legislation which is often contrary to the public interest. The GOP has brilliantly funneled mass frustration with the government into fealty to their party.  The party then acts in ways that can best and most easily be summed up as pro-business and anti-consumer.

Deregulation is an excellent example. Trump’s actions to deregulate the coal industry to allow coal companies to dump mining waste in streams and rivers was touted as a measure which would decrease unemployment among displaced coal industry workers.  In reality, the measure is likely to have but a negligible effect on employment, and will likely only increase profit margins of the industry and its investors, while simultaneously degrading the environment, causing wildlife losses and likely public health issues, the costs of which fall disproportionately on the average taxpayer. An Obama-era regulation requiring financial advisors to adhere to fiduciary standards (i.e., acting in the investor’s best interest and not their own) has been eliminated, in the name of providing consumer “choice” – as if anyone would rationally choose to have their retirement funds swindled.  Yet, this is how the modern-day GOP has successfully marketed their anti-consumer agenda for years.  It has now become commonplace to profess that special-interest-based legislation will have broad public benefits, which almost never materialize.  Some elements of the Democratic party have been complicit in such plutocratic moves as well.

While it may be tempting to lay the blame for unresponsive government at the doorstep of politicians, it would be wrong to do so. They are creatures of the environment which has been created for them.   An undemocratic government is but a symptom.  The real source of this malaise lies in the private sector itself.  The real problem is that private economic power – primarily money – is distributed in a radically unequal manner.  Wealthy individuals and corporations are able to convert their financial resources directly into political influence.  The masses lack any such voice.  For a society to be truly democratic, political power must be shared  – it must be distributed relatively equally among all citizens.

If we all have the same basic amount of political power, then government will respond to what most people want – and its actions are more likely to be in the public interest. That is why elections are so crucial to democracies. In an election, ideally, we all have the same exact amount of power: our one vote. A suburbanite does not have more votes than a farmer, and a rich person can’t vote more often than a poor one. So the vote is the ultimate form of equal political power.

The vote only determines who takes office, however. And if the vote were the only form of political power, democracy would not be so threatened in the United States.  It is not the only source of political power, though.  Many other sources of power lie in the private sector, where power is unequally distributed.  The result is that instead of being responsive to the middle class, average voter, the government primarily acts for and reacts to a powerful elite element.

In 2004, a task force of distinguished political scientists was convened by the American Political Science Association. Their report, American Democracy in an Age of Rising Inequality, is not only disturbing, but is by and large the basis of many discussions of income and political inequality which have been had in the ensuing years.  Many of their conclusions informed the arguments advanced by Senator Bernie Sanders during his 2016 presidential run.

The report concluded that despite efforts to ensure that all citizens have an equal voice in our political system, increasing levels of economic inequality in the United States are threatening this democratic ideal. The task force’s joint summary stated:

Disparities of income, wealth, and access to opportunity are growing more sharply in the United States than in many other nations, and gaps between races and ethnic groups persist. Progress toward realizing American ideals of democracy may have stalled, and in some arenas reversed.

Generations of Americans have worked to equalize citizens’ voices across lines of income, race, and gender. Today, however, the voices of Americans citizens are raised and heard unequally. The privileged participate more than others and are increasingly well organized to press their demands on government. Public officials, in turn, are much more responsive to the privileged than to average citizens and the least affluent. Citizens of lower and moderate incomes speak in a whisper that is lost on the ears of inattentive government officials, while the advantaged roar with a clarity and consistency that policy-makers readily hear and routinely follow.

The report cites trends and facts that lead to the conclusion that the problem is getting worse. Over the thirty years preceding the report – basically, from the mid-70s onward – financial disparities between individual Americans (sizable to begin with) have been increasing.  The benefits of the growing economy have accrued disproportionately to those who are already well-off.

Not only has the gap between the rich and the poor been widened, but so has the gap between traditional white-collar and blue-collar middle class. As reported by the task force, income is distributed highly unequally in this country. Over half of all income (50.3%) goes to the top fifth income class of families. The income going to the top 5% of richest families (21.7%) is twice the combined income of the bottom 40% –the 110 million Americans living on low and moderate incomes.  This inequality is getting worse. Between 1947 and 1979, the income for all classes of American grew at relatively the same rate. But more recently, between 1979 and 2009, the incomes for the richest 5% of families grew by a whopping 73%; and incomes for the richest 20% by an impressive 49%. But the increases for the bottom 60% of families have been pitiful in comparison – their gains were a meager 7%.

In 1979, the average income for the top 5% was 11 times that of the lowest 20%. In 2006, that ratio had grown to 20 times higher.   In 1965, CEOs made 24 times the wages of the typical worker. By 2007 that ratio had ballooned to 275 time the earnings of those workers. Meanwhile, the value of the minimum wage continues to decline. In the late 1960s, the minimum wage was worth 50% of the average worker’s hourly wage. By 2007, it was worth just 33.5% of the average worker’s wage.

The inequality in wealth among Americans is even more extreme. In 2004, the top fifth richest families owned a staggering 84.7% of all the wealth of the country. The next 40% owned only 15.1% and the poorest 40% owned less than 1%. The last time the distribution of wealth in this country was this skewed was in the 1920s, right before the Great Depression.

There is more, of course, much more, and I suggest you Google the report and read it for yourself if you have time. It details huge disparities among the super-rich an everyone else in terms of stock ownership, investment income and upward mobility, among other measures of inequality. And not surprisingly, all these indexes show that the U.S. has the highest level of economic inequality among developed countries. We are the worst in both income inequality and wealth inequality, and have the highest poverty rate and the most children in poverty.

Income inequality has been talked about plenty.  But another factor at work in the disempowerment of the voter is the increasingly sophisticated political mobilization of the corporate community.  In the 1970s, the business community was reeling from legislative defeats at the hands of environmentalists, consumer protection groups and organized labor.  They were concerned about the costs of new regulations. This gave rise to even previously apolitical corporations entering into the fray by devoting more resources to political goals.

As described by Jacob Hacker and Paul Pierson in their book Winner-Take-All-Politics: How Washington Made the Rich Richer– and Turned Its Back on the Middle Class, corporate groups undertook a very well-funded and well-planned campaign to increase their political power – pouring hundreds of millions of dollars into political campaigns, advocacy advertising, think-tanks, public relations and other associated efforts.  This effort resulted in business becoming far and away the most powerful organized interest in the United States – far outpacing environmentalists, the Religious Right and retired persons.   Whereas the rise of the labor movement throughout the early to mid-20th century was a liberal counter-balance to business,  it too found itself in the crosshairs of the business lobby, lost much in terms of membership and resources as a result, and now holds only minimal political influence in Washington.

When multi-national businesses bring their resources to bear on efforts to influence policy, income inequality more or less dictates the result: no other group in society is able to match those efforts. This doesn’t mean that business wins every political fight, but it does mean that business almost always has the political advantage.  Indeed, many large multinationals were the powerhouse behind the American Legislative Exchange Council (ALEC), a corporate-backed group that drafts model legislation responsive to its interests and then submits the same to “friendly” legislators, who often submit and pass these bills into law in verbatim form.   ALEC has sponsored legislation throughout the country which diminishes worker protections and consumer rights, tort reform laws to diminish the rights of injured victims, bills protecting non-sustainable energy generators from fair competition from renewable, and much more.

Legislators are responsive to these corporate demands because the corporations exploit the existing system to make them so. Their enormous financial resources alone put them in a position to essentially buy legislators of their choosing.  Money can buy advantages for political candidates, fund massive lobbying efforts, and produce volumes of politically useful information and analysis.

As our system is presently configured, running for and winning public office is a costly endeavor that requires a lot of money. Campaign contributions now play the central role in the electoral process.  As the APSA report explains: “To win a seat in national office, the incumbent and challenger usually have to win the support of funders before they go before voters. The effect can be to discourage certain kinds of challengers who, for instance, promote egalitarian policies that would redistribute resources from affluent campaign contributors.”  Translation: candidates who won’t play ball with wealthy contributors can’t obtain the resources needed to make a viable run for office.

There are other advantages that money can unlock: campaign staffs, high-priced consultants, opposition research, microtargeting of voter demographics, more media time, and better ads are but a few.  These advantages translate directly into gains at the ballot box.  The power to give candidates access to these advantages is wielded disproportionately by affluent individuals and organizations.  Corporate and industry trade political action committees, or PACs, outnumber and outspend all other interest groups.  For instance, in 2008, corporate-oriented PACs outnumbered similar Labor PACs by almost 10 to 1, and spent $321 million compared to labor PAC spending of $73 million.  Corporate PACs also outspent environmental PACs  50 to  1.  Corporate dominance in campaign spending was solidified by the 2010 Citizens United case which overturned the longstanding ban on corporations spending directly on political campaigns.

Although defenders of the current system argue that many contributions come from individuals, there is no valid argument that the average voter is financing campaigns. In fact, in 2002, 83% of all the itemized donations to campaigns were given by less than one-half of one percent of the U.S. population. Of this amount, about 75% (a whopping  $1.9 billion) came from a relatively small group of well-off Americans who could afford to donate $2,300 or more. This is politics as polo, a sport effectively only for the rich.

Some have argued that the rise of groups like MoveOn.org, and the spectacular fundraising success of Bernie Sanders’ campaign, is indicative of a shift toward the grassroots. And by certain barometers, these are examples of successes which have defied the narrative that the APSA report paints. But these are outliers, and not representative of the whole.

Therefore, it is clear that campaign finance, and the concentration of money in a small part of the private sector has led to a critical power imbalance in the public sector. In a better functioning system, the question of who gets elected would be determined by the voters, not by wealthy donors whose contribution level buys them unfair advantages over others. Wealthy individuals and organizations should not have more say over who get elected than the rest of us.

This imbalanced system has led to maladaptive behavior by political parties as well. Although the two parties are supposed to be rivals which represent different and competing constituencies, both have increasingly, and by necessity, become dependent on well funded donors, PACs and Super PACs.  This has pushed the Democratic Party farther to the right and has made it less responsive to many of its less affluent constituents, such as workers, minorities, and the poor.  Indeed, it could be argued that the increasing indifference of the Democratic party to the needs and wants of its long-time constituents was partially to blame for the party’s paltry showing in the 2016 election, both at the presidential and congressional levels.

Lobbying, or organized efforts to influence policymaking decisions, is also a key factor in the current malaise. Lobbyists are experts in getting their clients a better hearing and a more sympathetic ear.  Although lobbying organizations are diverse – with groups representing consumers, environmentalists, the LGBT community and others all competing in the mix – corporate lobbying efforts dwarf any competition in this arena as well.  Again, money is what distinguishes the corporate groups.  Groups with more to spend can create more lobbying groups to advocate their interests, and have been able to imbue these groups with the outward appearance of grassroots movements – the so-called “Astroturf” or fake grassroots movement.

More money can also lend sophistication to the organizations of lobbying groups themselves, or buy better and more effective representation. The “gold standard” of lobbyists of course is the retired member of Congress who still maintains connections on the hill.  Former military commanders are effective lobbyists for the defense industrial complex. Such people, with direct access to policymakers, come at a steep price.

Wealth can also purchase ideologically dominant schools of thought.   Funneling huge amounts of money into foundations, think-tanks, and universities – the main organizations that produce and promote the work of political intellectuals and policy experts – is another way to wield the levers of power.  Since legislators are typically specialists in only a few areas of policy, they are often dependent upon outside sources of information to inform their votes on many complex issues.  Well funded and largely conservative think tanks are willing and able to oblige.  They provide a steady stream of detailed studies, expert testimony, and Congressional briefings – all tailored to suit their self-interested ends – that greatly aid the lobbying efforts of moneyed interests.

Finally, the ability of the wealthy and the corporate elite to shape public opinion cannot be understated. In my view, this is probably the most malignant expression of corporate power upon the political process.  Money provides the power to shape public opinion

If the public can be convinced, for instance, that the interests of business are synonymous with their own interests, this provides cover and legitimacy for those seeking to roll back regulations and cut business taxes –the perennial policy priorities of conservatives. Accordingly, a great deal of money has been spend on media outlets of varying types that promote corporatist agendas to the public.  Pre-packaged news releases with supporting materials are sent to reporters daily.  Guest “experts” are provided to network and cable news outlets.  Pundits like  Rush Limbaugh and Sean Hannity perpetuate the corporatist viewpoint and market it to the public as beneficial to their interests, deriding competing policy ideas.  Through this vast right-wing media empire, people have been essentially indoctrinated to the view that the interests of the rich are beneficial to their own interests, and that liberal ideology is evil, and the source of their suffering.   This explains how broad swaths of the public are repeatedly convinced to vote for candidates who champion ideas antithetical to their own interests, and to direct the blame for their own powerlessness at convenient scapegoats, typically liberals and the underprivileged, who are portrayed as the “other” and worthy of derision.

This is why the voices of ordinary people, even when they embrace political activism in the public interest, are so easily drowned out by big-dollar donors and the vast apparatus they have set up to ensure that their interests are tended to. This is why the power of the vote is of relatively little primacy.  For the wealthy executive or CEO, casting a vote is the least effective means of exercising political power.  Buying politicians off and influencing thousands or hundreds of thousands of votes by writing a large check is a much more efficient tool.

In this environment, we have arrived at a place where even policies which have majority popular support don’t have a good chance of becoming law unless they are also supported by the wealthy.   Whereas in recent years, polls have consistently shown that most Americans would rather forgo tax cuts and spend that money on areas like education and health care, the Republican-dominated Congress has continued to give tax cuts primacy in their policy agenda. And the flow of the benefits of these efforts tells a clear story:  after the 2003 Bush tax cuts, households making over $1 million were granted a gift of nearly $100,000 in tax cuts, while the average tax cut for a middle-class family was only $217.   Nor is it a coincidence that  Congressional tax policies under both Democrats and Republicans have reduced the share of federal taxes paid by businesses from 20% of total federal revenue in 1975 to a mere 7% in 2003. One of the most blatant examples of elite power occurred in 2010, when the Republican Party refused to allow the extension of unemployment benefits to millions of jobless Americans unless the Democrats agreed to extend the Bush tax cuts for the rich.  These examples clearly illustrate how there have been large pay-offs in return for the money that affluent interests have invested in buying political influence.

This power shift also goes a long way towards showing why Congress is so slow to act on serious problems which are not areas of particular concern for the wealthy. The 2008 recession resulted in huge unemployment at the time, but in the face of this crisis, little was done by Congress to stimulate job creation – unless one buys into the notion that tax cuts create more jobs, an argument which has repeatedly been disproven in practice.  The suffering of American workers is of little interest to the well-moneyed interests that dominate in our political system.

Or take health care policy. America has had a significant number of citizens without medical insurance for decades before the ACA was enacted. Employers were cutting back on coverage for their workers.  Medical costs were resulting in a wave of individual bankruptcies. Financially strapped state governments began limiting access to Medicaid for many people living in poverty. The quality of medical care in the U.S. had declined to the point where we compared poorly to most other Western countries in terms of life expectancy and infant mortality. And yet in the face of all of this, Congress was reluctant to act in any vigorous or concerted way, and conservatives have continued to rail against what measures were taken.  The United States, for decades, has remained the only Western democracy that does not provide some form of universal health care for its citizens.  And yet, this has occurred in spite of consistent public support for major health care reform. By almost a two-to-one margin, Americans said they would rather scrap the current employer-based insurance system and replace it with a government program that would provide coverage for everyone. Three-quarters of Americans said that access to health care should be a right – not something available only to those who can afford it. And 67% said they would even be willing to pay more in taxes to make this universal coverage a reality. Still, until the election of President Obama, most members of Congress – both Democrats and Republicans – adamantly refused to promote such a universal plan.

The answer again lies in the imbalance of political power which favors the wealthy. These moneyed interests are unaffected by these problems.  But even more fundamentally, there are powerful special interests (particularly the health insurance industry) who benefit from the current system – and they have viciously fought against any reforms which would diminish their economic power.  Thus, Republicans and their health care industry allies were able to block the most promising and wide reaching reform proposals, such as the single-payer government plan that has proved so successful in other Western democracies.

This dismal state of affairs has not always been the case. In our past, there have been times when Congress rose up to pass reforms which economic equality, economic security, and economic opportunity among all citizens. Social Security in the 1930s, the G. I. Bill in the 1940s, and Medicare in the 1960s are all examples.  These egalitarian policies improved the lives of virtually all American families and are widely recognized as political and moral highpoints in American politics.

Today, these kinds of progressive bills would face a huge uphill battle in Washington, even with the Democrats in charge. Such efforts would be quickly attacked by powerful special interests, and condemned by conservatives as expensive and wasteful “big government” programs that would only raise taxes. For these interests, solving broad-based problems is not an issue, because these powerful individuals and industries are unaffected by them, and don’t care about anything but the continuity of their wealth and power. This has made it all but impossible to pass egalitarian legislation.

Arguably, most Americans still support a broadly egalitarian political agenda – higher minimum wages, more help for the poor, most affordable higher education, and so on. The redistribution of power upwards has, of course, been able to influence public opinion somewhat – but recent populist shifts suggest that is changing.  Most Americans back more government spending on health care and education, and more regulations that protect workers and the environment. Social programs, taxes, and regulations have been cut not because the public has demanded it, but because those with the most power have demanded it, and some easily manipulated voters have been persuaded by the conservative propaganda and policy machine that these goals are things they should support as well.

To truly rectify this issue, we must do more than merely elect more liberal politicians. To counteract this alarming trend towards plutocracy, we need serious and basic reforms.  I will be addressing those in columns over the next several weeks.