The Super-Rich

…are not like you and me; they have [much] more money, but that is not all the super-rich gain. We no longer live in a middle class world.

"Americans at the 90th percentile of the income distribution [between 1972 and 2001] rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains.

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent." (Krugman, NY Times, 27 Feb, 2006)

The 99th percentile in 2005 corresponded to just over $402,000 per year, the 99.9th to an average $1,672,726, the 99.99th to an average of over $6 million a year.

So, enough about figures: if college grads, or non-grads are not making the great gains that society is creating (from the "peace dividend" to the dot-com boom to the Bush "recovery") those gains are increasingly ending up in fewer and fewer hands.

What we are seeing is the establishment of an oligarchy. The super-rich are comparable to the Roman Senators of old, and their wealth (and power) is escalating. They are the oligarchy around which society is being restructured. The values, and increasingly the public decisions we make, are molded to the interests and needs of the super-rich .

Even the "liberal wing" of the US Supreme Court has signed on to the agenda of the super-rich, ruling in favor of using eminent domain to eliminate lower-income neighborhoods for pricey condo developments.

Cities are bullied into building huge new stadiums, why? In large part so that the owners can rent fancy "sky-boxes" for hundreds of thousands a year, usually to corporations; sky-boxes are one of the perks of the super-rich. So are high-rise condos in the best parts of town, preferably with views of the harbor, or the river, or the mountains: whatever is considered a premium value in that city.(In New York City, a new condo high-rise will sell each unit for at least $35 million.)

Then there are the McMansions built everywhere, not for the super-rich, (who build their own huge mansions out of sight) but for the wannabees, those in the next tier down. I've seen them in new developments in the Hudson Valley, and surrounding the Garden of the Gods in Colorado Springs, and in as many places elsewhere. Why do people need houses with 10,000 square feet of living space (which has to be heated and cooled, too, don't forget)? They are aping their betters, and keeping up with the Joneses, their wealthy brethren. It is like the mania for sweeping, manicured lawns, useless, conspicuous consumption originated by the estates of the British nobility, the super-rich of another empire.

Our society is increasingly governed by the thinking of the super-rich. Think of the "market solutions" to congestion, for example, now being proposed and carried out in many parts of the country: toll-road by-passes in Seattle and Denver, so that those who can afford it can avoid rush-hour traffic; differential bridge tolls in the Bay area, to direct drivers over less convenient bridges--unless they can afford a daily commute over a more expensive one.

The Roberts-Alito Supreme Court has demonstrated quite early where its sympathies lie: with the corporations, which are owned by the super-rich, and from which they gain their super incomes. A woman under-paid for decades, finally discovers she's underpaid and sues: in Ledbetter v. Goodyear Tire and Rubber, the Roberts court rules that she can only get back pay for the 180 day period after she filed her complaint, even though there was no way she could have known that she was discriminated against for almost thirty years. The decision may be a "strict" reading of the statute, but it negates the law's clear intent, and favors corporations, since most pay discrimination is extremely difficult to uncover.

The Bush administration has made no secret of its alliance with the super-rich. "My base," Bush joked at a fundraiser--except he wasn't joking. Virtually every policy his administration has pursued has supported the interests of the super-rich: tax-cuts that favor them, like cutting high-end rates and making dividends tax-free; tax cuts for corporations; an expensive war, which bolsters the war contracts of defense corporations, and was meant to gain control of Middle East oil reserves for the oil majors; acceleration of the exploitation of timber and mining products from public lands--by private corporations; privatization wherever, and whenever, including Bush's failed attempt to privatize Social Security, so that Wall Street could profit, while ordinary people paid the price.

Look at part D of Medicare: the "reform" was written to favor private healthcare corporations, who provide most of the prescription drug programs through Medicare Advantage--the corporations are over-paid enough that they make healthy profits--and big money Republicans (and enough Democrats) insured that big Pharma would gain even higher profits: negotiating drug prices by Medicare was prohibited. The companies can charge whatever prices they set, since patented drugs are monopoly-priced: even the usual monopoly constraints (reduced sales at higher prices) do not entirely apply. Medicare, and the corporations providing Part D services, pass along co-pays that have a real bite.

The point is: wherever you look you'll see governments at every level favoring the interests of the super-rich and largely ignoring the needs of everyone else, or subordinating them to the desires of the very wealthy. This even includes elections, and election politics, since the conservative Supreme Court for years has favored the interests of the wealthy: to influence the electorate through their own money has been ruled a "free speech right." Further, the Republican move to privatize even the counting of ballots allows private corporations not only to profit from elections, but also to count the results in secret, in order to "protect proprietary secrets." Can they manipulate elections for the interests of the super-rich? A good case can be made that they already have: in 2000, 2002, 2004 and even, if less successfully, in 2006.

Why has the super-rich taken over? The Economist claims that the reason for increasing inequality is because the productivity gains of the last two decades came from corporate investment in technology, and therefore that the returns naturally have gone to the corporations which have made these investments, not to the workers.

There are three things wrong with this argument: one, the corporations gained the capital they invested largely from the labor of their employees. Workers, as Marx would have pointed out, created most of the capital, which was accumulated by paying them less than they were producing for the corporation. Second: a good deal of the "productivity gains" are the result of laying of some and requiring the remaining workers to produce more, so that the firms don't have to employ more: when workers are laid off, the remaining workers have to work harder, but because of the below, they are too scared to ask for higher wages. Third: employees were persuaded, through media bias, through threats of replacement by foreign workers, through campaigns to prevent them from organizing unions, that they couldn't ask for higher wages. "Free trade" agreements helped to make this possible, by facilitating the transfer of more and more production abroad to low-wage countries. Free (corporate-controlled) trade is a program of the super-rich.

Our whole society is being remade into an oligarchy, much like the top-heavy society of fifth century Rome, in which the interests of the other 99.99% of us are discounted.

Rome fell in 476, largely because its super-rich, the Senators, did not want to pay to maintain the empire: note that not many survived for long after the empire fell.

For what actually happened, click here For what happened after the fall, click here. Our super-rich are at least as tax averse as the Roman Senators; further, the needs of our society as a whole are of little interest to them. They'd rather spend billions a week on the war in Iraq--they're profiting billions from it--than rebuild America's infrastructure.

Rebuilding roads, bridges and sewer systems would be a huge jobs program that would give workers more leverage; it would raise wages, but the super-rich would find a way to prevent "wage pressure"--or find a way to profit from the contracts, probably meeting both goals by hiring illegal aliens; they did precisely that when contracting to rebuild New Orleans; they'd also rather not spend more on educating the next generation--they send their kids to private schools, after all; they'd rather not make healthcare affordable to everyone; they might have to pay more taxes, while right now they can afford the best healthcare for themselves, while earning healthy profits from healthcare corporations.

Actually, what they'd rather do is play golf in Crete, where golf courses, reportedly, are drawing down Cretan wells. Their high-priced pleasures are turning that ancient land into a desert, a metaphor for what they are doing to our world.

See the E-book: The Selfish Class