The United States of Oligarchy and Plutarchy

Source Flickr Author takomabibelot

WASHINGTON, April 17, 2014 — The United Press International just released a brief news report in which they outlined a study newly published by Princeton and Northwestern Universities on the topic of how our government operates in reality as opposed to theory. Their conclusion?  American government and the legislation it produces follows the dictates of oligarchs.

The term “Oligarchy” stems from the Greek. It conjoins oligos, meaning few together with arkho, meaning to rule or command. Wiki summarizes it as “a form of power structure in which power effectively rests with a small number of people.”

In the sense that policy is driven in America by those who derive their power and influence from wealth, perhaps a more accurate term could be Plutarchy.

The name of the study is “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.” The researchers examined an exhaustive array of data and legislation covering the period of U.S. policy from 1981 to 2002. Their conclusion is that the economic elite, sometimes referred to as the ‘investment class,’ dominates and steers the direction of the broad expanse of government policy.  It’s authors encapsulate their findings in this statement:

“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence,” says the peer-reviewed study.

Some will balk at this report and reflexively read into it glimmers of ‘class envy’. But that would be dismissing the report’s conclusions too lightly. There are numerous every day examples to support the findings of the report.

When you apply for a credit card or request a debit card from your bank, take out a mortgage, car loan or lease, contract with an attorney or apply for a job, there is a good chance that the contract will contain a clause that you most likely will overlook – Binding Mandatory Arbitration. Binding Mandatory Arbitration means, for example,  that if you have the misfortune of purchasing a car that is so defective that the dealer can’t restore it to serviceable operation, you may not bring suit against the car dealer.

You will be forced to participate in arbitration, which essentially means you will pay thousands of dollars to plead your case before arbitrators that in most cases have been cherry picked by the business owner and the outcome is so pre-determined that in only a few cases will the consumer ever by made whole.

Another example is employment agreements. With a BMA clause, you can be discriminated against or be subjected to harrowing sexual harassment and you will denied due process under the law. The arbitrator will not be looking at laws, will have no expertise in law or a law degree even, and you will have no recourse after the fact. Most people after being briefed by an attorney about the extreme odds against them in this process and its ‘Kangaroo Court’ nature, simply abandon their grievances and the corporations walk away from any accountability.

The United States Supreme Court put its stamp of approval on this travesty in American Express vs. Italian Colors. American Express insisted that merchants like Italian Colors, a restaurant chain, accept a corporate card account as a condition of being able to accommodate customers with American Express cards. The fees were 30% higher than offered by competitive vendors. This, the Supreme Court and the lower courts admitted, was a violation of Section 1 of the Sherman Anti-Trust Act and was eligible for monetary damages under the Clayton Act. But, Italian Colors could not pursue litigation against American Express, in the majority Supreme Court opinion, because the fine print that was forced on Italian Colors included a Binding Mandatory Arbitration clause.

Justice Elena Kagan in her dissenting opinion, remarked that the ruling was “a betrayal of our precedents” that allows monopolists to evade antitrust laws simply by inserting take-it-or-leave-it clauses in their contracts. And in more and more instances, you cannot find another vendor, supplier, car dealer or lender that isn’t cashing in on this scam. What you got in the Constitution in due process, a day in court and a jury of your peers, these ubiquitous contracts pull right out from under you – and the Supreme Court thinks it’s fine and dandy.

How about Americans who want the government to enforce immigration law and free up jobs for legal residents?  A solid majority of voters want hardened border security and implementation of eVerify, in every survey that highlights that at least 8 million jobs are being held by illegals.

But big-pocket Democrat contributors don’t want immigration enforcement because illegal immigrants are natural would-be Democrat voters and potential new union members.

Such well known contributors to establishment Republicans as the United States Chamber of Commerce, McDonald’s, Silicon Valley tech giants Apple and Facebook, Hilton and Marriott, Halliburton, Carl’s Jr., DHL and hundreds more, don’t want immigration enforcement because open borders secure their access to sub wage labor.

The oligarchs have the ear of Congress and you have to shout with a collective roar even to be heard.

Space does not permit a review of the entire litany, but recent experience has shown us that when special interests from private equity firms and hedge fund traders to Hollywood studios, to energy industry behemoths, want tax carve outs, all they have to do is purchase a Senator or two and a handful of Congressmen and voila, their accountants are sitting in Congressional offices writing IRS code.  If you think that is an exaggeration, consider General Electric, Apple, Verizon, Boeing, ConEd, PG&E, Bristol Myers-Squibb, GM, J.C. Penney, Agilent Technologies, Hewlett-Packard and Fox News’ parent company – NewsCorp, pay no taxes.  Do you own a small to medium size business? Did you send a check with a bunch of zeroes on it to the IRS yesterday? Right.

When Harry Reid’s friends in Big Pharma want to have a market monopoly written in stone for 12 years, they just find a bundler and send over a pile of campaign funds. When an Obama crony wants half a billion dollars in loan guarantees, only to leave the taxpayer twisting in the wind, when the enterprise goes belly up, he gets it – Solyndra, A123 Systems, Fisker Auto, SunPower, AboundSolar, BrightSource – the list is endless.

When Diane Feinstein’s husband Richard Blum and his firm want a federal contract to sell off FDIC owned foreclosures and liquidated US Post Office property, Diane pulls the strings internally to make it happen. Blum, according to the Inspector General, racked up $108,319,000 in fees and compensation under the FDIC deal alone.

When VISA was lobbying Nancy Pelosi on some crucial legislation to their industry during her tenure as Speaker, hubby Paul was treated to an insider’s opportunity to snap up 5,000 shares of Visa at a special invitation IPO pre-release. His initial purchase jumped in value and he loaded up with thousands more shares – now worth over $1 million dollars. Sweet deal.

But what do regular citizens, voters, taxpayers and consumers get out of these cozy relationships, this giddy auctioning off of favors, monopolies and no-bid contracts – the corporate welfare to insurance companies on the inside of Obamacare and well to do farmers paid not to grow crops? Higher taxes, raised healthcare premiums, inflation, economic instability, the erosion of civil liberties and a sinking sense that voting means almost nothing in the final equation.

The authors of the research comment that:

“In the United States, our findings indicate, the majority does not rule — at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”

And it follows that if you send the same people back to Congress again and again – they and their friends will ‘get it’ and you won’t.

Isn’t it about time you did?

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