Posted by: coastcontact | January 30, 2012

A Society Run by the Rich!

The American system of opportunity is broken.  There is nothing and no one on the horizon that will change our destructive trajectory.

The American model of capitalism and the opportunity to become very wealthy and has become the goal of almost every other nation in the world.  Like so many other successes in this world our leaders attempted to fine tune our system.  That led to our undoing and a focus on the inequities that unlimited capitalism creates.

The Occupy Wall Street and Tea Party groups have highlighted the problems that most of us have known about for decades.  Most of us just chose to ignore the issues.  We took a “don’t rock the boat” attitude.  The obvious condition of our economy, and its bleak future, has forced us to re-examine this situation.  More of us will now be forced to think harder about the choices we make at the ballot box.

The average American family has an income of less than $50,000 per year.  At the same time there are millionaires whose income is so large that they earn an annual income that is 340 times as much and more.  Yes, John Stumpf, CEO of Wells Fargo Bank made $17.6 million in 2010.  Mitt Romney’s income for the past two years has exceeded $20 million per year.  At least Mr. Stumpf had to work for his money.  Mr. Romney has not worked for at least six years and is living off of his investments.

Irking to most of us is that many millionaires have income based upon capital gains and qualified dividends.  Their income tax rate is 15% or less while those drawing a salary are taxed at rates up to 35%.

These are not isolated individuals.  One percent of all Americans equal 3 million people.  They have no concept of living on $50,000 per year.

If you believe that either Mitt Romney or Newt Gingrich (holder of a $500,000 revolving account at Tiffany’s) will be interested in improving the opportunities for the average American then you really are delusional.  They will do everything in their power to sustain the system that has made them rich.

Meanwhile the rest of us are fed the line that all of us are owners of American businesses through our 401(k)s and IRAs.  So we dutifully go to work hoping that someone will recognize our talents and give us the promotion we believe we deserve.  For most of us those promotions never materialize and we end up retiring with a savings account of about $100,000 and a reliance on Social Security.

G. William Domhoff, a professor at the University of California Santa Cruz, has been conducting an ongoing review of wealth and income in America.  He has posted his study on-line.  Included is this summary of our condition.

“As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).”

If you think this is just an American problem take a good look at your own country. Canada has high rise condo projects in all of its major cities and lots of well to do people.  That can be extended to the nations of Western Europe,Latin America, and Australia too.

The historic reality is that 20% of the population of any nation owns 80% of the wealth.  It is the Pareto Principle or the 80-20 rule.  This is the out come of a study done by Italian economist Vilfredo Pareto, who in 1906 observed that 80% of the land in Italy was owned by 20% of the population.  He soon found that the 80-20 ratio applied to many other aspects of society and business..  So no matter how much we try to void this situation it continuously re-appears.

My complaint is that 1% if our population has grown so powerful that most of the rest of us cannot control  our society.  Look at the current Republican campaigning in Florida.  Mitt Romney is leading in the polls but is spending money for negative advertising against Newt Gingrich at a rate of four times as many dollars.  It’s a rich man losing to a very rich man.  Our country is being bought by the rich.

There is little hope that this situation will change any time soon.  Barack Obama chose not to accept federal funding for his campaign (in 2008) and instead raised millions more on his own.  Thus both political parties are being run by the influence peddlers.  A third political party would be faced with the same conditions.

Is there a solution?  None that I know of!

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Responses

  1. That was a very true statement we need a third party and soon!

  2. Perhaps Obama is beholden to corporate interests too much and perhaps he has made too many concessions, but there is a wide river of policy difference between Obama and either of the GOP candidates. I have no interests in going back to a GOP whitehouse, unless I want more poor and foreclosed upon in my town. There is a huge difference between the two – so don’t waste your vote.

    As far as third party stuff goes, I think its gotta be movements that infiltrate the status quo. Like the tea party infiltrated the GOP, there has to be a movement in the dems like that.


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