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< | Reconciliation of Freedom and the State in 2016 | >
> | Defining the State in 2016: America’s Financial Oligarchy | | | | |
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< | -- By LaurenRoemke - 19 Feb 2016 | >
> | -- By LaurenRoemke? - 23 Mar 2016 | | | | |
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< | Bernie Sanders’ popularity among voters represents a yearning for reconciliation of the state and freedom, such that the state works to promote, rather than restrict, the freedom of the majority. | >
> | America’s state in 2016 most reflects a financial oligarchy. Even though Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association and a widespread (if still contested) franchise, a few wealthy citizens and interest groups disproportionately control U.S. policymaking compared to median-income citizens (https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf). Over half the money given to presidential candidates in the 2016 campaign came from just 158 families (http://www.nytimes.com/interactive/2015/10/11/us/politics/2016-presidential-election-super-pac-donors.html?_r=0), and in 2012, lobbyists and interest groups spent $6.7 billion to influence Congress (http://sunlightfoundation.com/blog/2013/11/25/how-much-lobbying-is-there-in-washington-its-double-what-you-think/). As a result, people have lost faith in our political institutions; Americans’ trust in Congress declined from 42% in 1973 to just 7% in 2014 (http://www.gallup.com/poll/171710/public-faith-congress-falls-again-hits-historic-low.aspx). There is a widespread and accurate belief that our political institutions have lost all remnants of legitimacy and can no longer be used to effectuate change, as reflected by the Occupy Wall Street movement of 2008 and citizen rage in the 2016 election. In order to dismantle the oligarchic structure and create a participatory democracy, it will help to first understand the financial oligarchy’s origins and consequences. | | | | |
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> | Origins of America’s Oligarchy | | | | |
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< | Consequences of the State | >
> | In Winner Takes All Politics, Hacker and Pierson argue that President Carter’s administration kicked off income inequality through tax code revisions. In 1978, the Carter administration and congress cut the top rate of the capital gains tax from 48% to 28% - “an enormous boon for wealthy Americans” (http://www.motherjones.com/politics/2010/12/how-oligarchs-took-america). Simultaneously, efforts to make it easier to unionize died in the Senate and a powerful business lobby defeated a proposed new agency that was to work on behalf of average Americans. Carter’s successor, Ronald Reagan, achieved a “fundamental rewriting of the nation’s tax laws in favor of winner-take-all outcomes” through his 1981 Economic Recovery and Tax Act, which cut taxes for corporations, reduced capital gains and estate taxes, and provided a 10% income tax exclusion for married couples in two-earner families (http://www.motherjones.com/politics/2010/12/how-oligarchs-took-america). | | | | |
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< | Before we can understand how to reconcile the state and freedom, we must first understand what the state is. Holmes suggests that in order to understand something, we must look at what it does, or its consequences. The federal government currently owns $1 trillion of student loan debt (Chris Denhart, Forbes), and the Congressional Budget Office expects a $149 billion profit on new direct loans to students through 2024 (Jordan Weissmann, Slate). In addition to student debt, wealth equality continues to grow, with the wealthiest 160,000 families owning as much wealth as the poorest 145 million families (Chris Matthews, Forbes). In fact, 44% of households have less than three months of savings to live above the poverty level (Quentin Fottrell, Market Watch). Under these circumstances, it is not surprising that medical bills are the biggest cause of U.S. bankruptcies (Dan Mangan, CNBC). The United States also has the highest incarceration rate in the world, with young black males making up a disproportionate share of the prison population (Tyjen Tsai & Paola Scommegna, PRB). Looking at these financial and physical constraints, it is apparent that the state restricts the freedom of the majority in favor of the elite minority. The state limits the freedom of students to choose a job other than the one that will pay off debt most quickly. The state limits the freedom of Americans to live free from fear that they will go bankrupt from medical bills, or forced into poverty from losing their jobs. In this paramilitary police state, many Americans can’t even go through their day without worry of being arrested. In the U.S., the state’s interest in control is at odds with the freedom interest of the majority of the population, and this tension has reached a breaking point. | >
> | These policies continued into subsequent presidencies, allowing the rich to pull ahead of everyone else. Citizens and interest groups with this accumulated wealth could now mount stronger lobbying campaigns to achieve policies that tilted the playing field ever more steeply in their favor. The U.S. Supreme Court’s decision, Citizens United v. FEC (2010), allowed the wealthy few to gain an even stronger foothold in influencing U.S. policy by allowing unlimited funds to be spent in U.S. elections. America’s financial oligarchy has its origins in the 1970’s and 80’s tax cuts for the wealthy. These tax cuts not only enabled the concentration of wealth, but also of power through use of the lobby industry, revolving door policies, and campaign finance reforms. | | | | |
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> | Consequences of America’s Oligarchy | | | | |
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< | Antecedents of the State | >
> | Holmes suggests that in order to understanding something, we must look at what it does, or its consequences. In order to fully understand America’s financial oligarchy, we must look at what it does. First, it is not surprising that under a financial oligarchy, wealth inequality continues to grow. Today, the wealthiest 160,000 families own as much wealth as the poorest 145 million families (http://fortune.com/2014/10/31/inequality-wealth-income-us/). Second, laws in the U.S. disproportionately favor employers over employees. Of developed countries, the U.S. has the smallest percentage of women receiving paid maternity leave (http://www.politifact.com/truth-o-meter/statements/2015/jan/21/barack-obama/barack-obama-says-united-states-only-developed-cou/). U.S. employers also have greater freedom than their European counterparts when it comes to terminating employees (https://www.jacksonlewis.com/media/pnc/9/media.2089.pdf). Lastly, unions in the U.S. have become more passive in the face of declining membership and aggressive management. Today, unions represent just 7.4% of private-sector workers and many are understandably reluctant to strike for fear of repercussions (http://www.nytimes.com/2009/04/05/weekinreview/05greenhouse.html). For example, when the nation’s air traffic controllers engaged in an illegal strike in 1981, President Reagan fired the 11,500 striking traffic controllers and immediately hired replacements. In 2008, American unions engaged in 159 work stoppages, down from 1,352 in 1981 (http://www.nytimes.com/2009/04/05/weekinreview/05greenhouse.html). These absences of employee protections impede the ability of workers to bargain for higher wages and salaries, creating a wider gulf between the haves and the have-nots. As a consequence, very few families have enough wealth to sustain a job loss or high medical bill. In fact, 44% of households have less than three months of savings to live above the poverty level (http://www.marketwatch.com/story/americans-are-trapped-in-a-cycle-of-financial-insecurity-2016-01-25). | | | | |
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< | Having seen the consequences of the state, it is also informative to look at its antecedents in order to understand how we can begin to reconcile freedom and the state (Cohen, Transcendental Nonsense). History and tradition largely inform why the state has taken its particular shape. Many of the founders of the American state were educated in English common law. As explained by Holmes in The Path of the Law, English common law developed in the “needs of kings, [and] in the assumptions of a dominant class.” These needs and assumptions were reflected in the text of the Constitution, which ascribed rights to white, male landowners. During the debates at the constitutional convention, James Madison, the Constitution’s main framer, said the government “ought to be so constituted as to protect the minority of the opulent against the majority” (Robert Yates, Avalon Project). In sum, the “U.S. Constitution put power in the hands of the wealthy, and was written to prevent, not promote, democracy” (Michael Berkowitz, Huffington Post; Noam Chomsky, Requiem for the American Dream). The State’s function as a system to limit democracy and protect the opulent minority continues today, and is fundamentally at odds with the freedom interest of the majority. As stated by Michael Berkowitz, “The course of our history has been defined by the struggles of this wealth and political power against upsurges in democratization, most notably in the 1930s labor movement and the 1960s peace, civil rights, and women’s movements” (Michael Berkowitz, Huffington Post; Noam Chomsky, Requiem for the American Dream). In the 2016 election, we are again seeing an upsurge in democratization through voter demands for Wall Street regulation, increased minimum wages, reduced college tuition, national healthcare, and campaign finance reform. The everyday experiences of the majority have undermined American idealism and loyalty and enthusiasm for existing organizations, creating the possibility for new organizations that value human dignity rather than the preservation of inequality. | >
> | In With Liberty and Justice for Some, Glenn Greenwald argues that legal inequality is both a consequence and contributor of financial and political inequality. The past four decades have witnessed the rise of a two-tiered justice system that shields and immunizes the elite from the consequences of their criminal acts, yet subjects ordinary citizens to very harsh criminal sanctions. Examples include the failure to prosecute 2008 financial fraud criminals, and Obama officials’ decision to shield Bush torturers from all accountability. | | | | |
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> | Considering the consequences of America’s financial oligarchy, it is clear that the wealthy elite are engaged in class-based, self-interested advocacy that tilts the playing field ever more steeply in their favor to the disadvantage of ordinary citizens. | | | | |
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< | The Appeal of Bernie Sanders | >
> | Moving Forward | | | | |
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< | Understanding the consequences and antecedents of the state are key to understanding how it can be reconciled with freedom. As explained by Holmes, “When you get the dragon out of his cave on to the plain and in the daylight, you can count his teeth and claws, and see just what is his strength. But to get him out is only the first step. The next is either to kill him, or to tame him and make him a useful animal…the man of the future is the man of statistics and master of economics." Many voters see Bernie Sanders as a candidate who sees the state in the daylight, sees its strength in restricting the freedom of the majority, and has formulated a plan on how to revolutionize it. In this sense, Sanders is a man of the future in that he doesn’t wax poetically about the state as some “shining city upon a hill,” whose beacon light guides freedom-loving people everywhere (Reagan Farewell Speech), but rather tells the truth and reckons with social fact and statistics. When Sanders talks about a political revolution, he is talking about creating millions of decent-paying jobs, providing healthcare to all citizens, enacting campaign finance reform, eliminating mandatory minimum sentences, and ending the federal prohibition on marijuana. These measures, while not a political revolution in its truest form, can provide meaningful freedom to the majority of the population by allowing citizens to live without fear that an illness or temporary unemployment will leave them bankrupt, participate meaningfully in democratic elections, and not be imprisoned for minor offenses. At the same time, it’s important to remember that Bernie Sanders is not the answer, and will most likely not be elected. Nonetheless, Sanders’ popularity among voters marks an important moment in U.S. history; it represents a yearning among the population for reconciliation of the state and freedom, such that the state works to promote, rather than restrict, the freedom of the majority. | >
> | The path moving forward is far from clear. Working within the system is unlikely to achieve meaningful results given the elite’s ability to maintain the status quo through resources and accumulated experience. At the same time, Theodore Roosevelt resolved America’s plutocracy of the late 19th and early 20th century through trust busting, and in 1907, banning corporate donations to federal campaigns, suggesting reform through existing channels may be possible. Ultimately, this transformation will not be easily accomplished. We must protest, advocate for change, and devise novel solutions if we are to transform our current government of the 1%, by the 1%, for the 1%, into a government of the people, by the people, for the people (http://www.vanityfair.com/news/2011/05/top-one-percent-201105). | | | | |
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< | Works Cited | >
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- Greenwald, Glenn (2012). With Liberty and Justice for Some. Picador.
- Hacker, Jacob and Paul Pierson (2010). Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class. New York, New York: Simon & Schuster.
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- Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harvard Law Review 457 (1897)
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