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Apr-25-2010 00:20printcomments

The Very Rich are America's Real Enemies

In 2003, the top 1 percent of American households owned 57.5 percent of corporate wealth and the top tenth of 1 percent about half of that. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

Rich American

(CALGARY, Alberta) - An honest politician, goes the old saying, is one who stays bought. If that’s true, then the good news is that Americans have about the most honest politicians on the planet. The bad news is that the voters don’t own them.

The tea party supporters have it half-right. The government is the enemy, but not because government is inherently bad, but because the people who own the government have no interest in serving the nation or its citizens. They serve their real masters—the rich and propertied. As Ferdinand Lundberg noted in his classic 1968 study The Rich and the Super-Rich: “Many intelligent citizens today complain in the face of the alleged complexity of affairs of feelings of powerlessness. Their feelings are justified. For they are in fact politically powerless.” He could have written that today, instead of 42 years ago.

The very rich, Lundberg pointed out, involve “the nation in cycles of ferocious wars that are to the interest of asset preservation and asset expansion but are contrary to the interest of the nation and the world.” It was Vietnam, then, today it is Iraq and Afghanistan. It will probably be Iran and North Korea tomorrow.

American Class Society

America is a class society, more concentrated and roped off than anything ever seen in a European or British democracy—more like pre-Revolutionary France of the late 18th century. Americans are oblivious to this because they are blinded by the fantasy of the Horatio Alger myth of upward mobility. Most Americans do not want any restrictions on the rich because they believe that they will one day be part of that class.

A 2000 Time magazine survey asked people where they saw themselves in terms of national income. Nineteen percent said they were in the top 1 percent and another 20 percent said they expected to be someday. So, nearly two out of five Americans favor policies that favor the wealthy. As conservative columnist David Brooks once put it, “None of us is really poor; we're just pre-rich.”

In the first paragraph of his book, Lundberg wrote:

Most Americans—-citizens of the wealthiest, most powerful and most ideal-swathed country in the world—-by a wide margin own nothing more than their household goods, a few glittering gadgets such as automobiles and television sets (usually purchased on the installment plan, many at second hand) and the clothes on their backs. At the same time, a relative handful of Americans are extravagantly endowed, like princes in the Arabian Nights tales. Their agents deafen a baffled world with a never-ceasing chant about the occult merits of private property ownership. It would be difficult in the 1960s for a large majority of Americans to show fewer significant possessions if the country had long labored under a grasping dictatorship.”

If anything, things have gotten worse in the intervening four decades. The polls and the headlines demonstrate that story.

Wealth distribution has become more skewed

In 2003, the top 1 percent of American households owned 57.5 percent of corporate wealth and the top tenth of 1 percent about half of that. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

Capitalism, said Lundberg, is a failure system:

In business, under the American system hundreds of thousands more have failed, generation after generation, than the few who have succeeded. If we are to judge by the preponderance of individual successes over failures or vice versa, then the American system, businesswise, is a record of steady, almost unrelieved failure. It has failure literally built into it. It is indeed a near-miracle, front page news, when anyone really makes it. This judicious observation sounds paradoxical only because it contradicts conventional propaganda.”

The rich as anti-social parasites

The rich have always been lionized in America. In the late 19th century, Yale sociologist William Graham Sumner defended millionaires, saying that

the millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done. It is because they are thus selected that wealth—-both their own and that entrusted to them—aggregates under their hands… They may fairly be regarded as the naturally selected agents of society for certain work. They get high wages and live in luxury, but the bargain is a good one for society. There is the intensest competition for their place and occupation. This assures that all who are competent for this function will be employed in it, so that the cost of it will be reduced to the lowest terms.”

Here is the bargain in action:

Citigroup paid $120 million to Robert Rubin, former Treasury Secretary and director of Citigroup as a senior advisor. Testifying last week, he said:

Almost all of us involved in the financial system, including financial firms, regulators, ratings agencies, analysts and commentators missed the powerful combination of forces at work and the serious possibility of a massive crisis. We all bear responsibility for not recognizing this, and I deeply regret that”.

Chuck Prince, who served as CEO of Citigroup during its meltdown testified:

Let me start by saying I'm sorry. I'm sorry that the financial crisis has had such a devastating impact on our country And I'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us."

In an interview last week, Bill Clinton acknowledged that he was wrong to take what he now views as bad advice from his Treasury secretaries, Robert Rubin and Larry Summers, who told him the market for complex financial instruments known as derivatives ought to remain unregulated.

"On derivatives, yeah, I think they were wrong and I think I was wrong to take [their advice]," Clinton said, "because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them, and they don't need any extra protection and any extra transparency. The money they're putting up guarantees them transparency.

"The flaw in that argument was that first of all sometimes people with a lot of money make stupid decisions and make it without transparency."

Of course, Larry Summers is now director of the White House's National Economic Council and Rubin is still a “valued voice” in the Obama WH. The real crime here is that these men and their ilk, broke the economy and Obama and his ilk are inviting them back to do more damage. That is what the tea party crowd should be protesting.

Here is a must read story: “Goldman executives cheered housing market's decline, newly released e-mails show” from today’s Washington Post. Zachary A. Goldfarb begins the article:

As the U.S. housing market started to slide, executives at the most legendary investment bank on Wall Street, Goldman Sachs, were trading e-mails in which they cheered the declines, even when those declines meant some of their clients were taking major losses, according to newly released documents. The documents show that the firm's executives were celebrating earlier decisions in which they bet against the housing market”. Read the entire article here:

Massey CEO's Pay Soared As Mine Concerns Grew

Massey Energy CEO Don Blankenship was paid $17.8 million last year even as some of the coal mines he supervised accumulated safety violations and injuries at rates that greatly exceed national rates.

Read the entire article here:

Eye-opening links

The rise of the super rich:

Robert Rubin: "Amoral, Blundering ... And Still Influential in Washington":

The Wall Street banks are the new American oligarchy -- but the Tea Party crowd can't seem to see it:

Bill Clinton on His Own Mistakes:

Majority lacks trust in government:

Daniel Johnson was born near the midpoint of the twentieth century in Calgary, Alberta. In his teens he knew he was going to be a writer, which is why he was one of only a handful of boys in his high school typing class — a skill he knew was going to be necessary. He defines himself as a social reformer, not a left winger, the latter being an ideological label which, he says, is why he is not an ideologue. From 1975 to 1981 he was reporter, photographer, then editor of the weekly Airdrie Echo. For more than ten years after that he worked with Peter C. Newman, Canada’s top business writer (notably on a series of books, The Canadian Establishment). Through this period Daniel also did some national radio and TV broadcasting. He gave up journalism in the early 1980s because he had no interest in being a hack writer for the mainstream media and became a software developer and programmer. He retired from computers last year and is now back to doing what he loves — writing and trying to make the world a better place

Comments Leave a comment on this story.

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Buck September 9, 2010 3:50 pm (Pacific time)

No other human being has the right or the authority to put a tax on my labor ! So says the Constitution For The united States of America, as originally written !!!

Buck September 9, 2010 3:47 pm (Pacific time)

No other human being has the right or the authority to put a tax on my labor ! So says the Constitution For The united States of America, as originally written !!!

You're  missing the point. Society is based on a "social contract"; Read John Locke or Rousseau from the  18th century who influenced the writing of the Constitution with books of that title.. Taxes are not something imposed but are agreeed upon contributions to have a positive and workable society.Do you like to have the confidence that the water coming out of your kitchen tap is safe to drink or that the food you buy is safe to eat? These are only two of the things that your taxes theoretically pay for.

TARA TAN KITAOKA. June 3, 2010 8:44 pm (Pacific time)


Natalie April 26, 2010 4:51 pm (Pacific time)

On the positive side, one lost soul repented and finally decided to come out of the closet. :)

historian April 26, 2010 3:09 pm (Pacific time)

Joe is correct, partially. Because of the Constitution, we "were" the greatest nation. Because the Constitution was ignored, now the U.S. is nothing more than a corporate owned, warmongering, taxing, media induced, pharma induced nation. There are few here tho, that actually read, and learn, so who knows what all of this is going to bring?

April 25, 2010 8:03 am (Pacific time)


Bill April 26, 2010 4:48 pm (Pacific time)

Who's money is it? the people that made the bussness.Go make your own.

A business and its workers are in a symbiotic relationship. A business with no workers, doesn't make anything (unless you're talking a single proprietorship) and workers without a business to supply a working environment are helpless.  As Adam Smith observed in his Wealth of Nations in 1776:

“The master can choose his man, but most men cannot choose their master. The master can afford to wait, he is not dependent on this man or that. But, the man must have his job—he cannot wait. In the long run the workman may be as necessary to his master as his master is to him, but the necessity is not so obvious.”

Without workers, there is no money (production) for anyone. 

historian April 26, 2010 2:54 pm (Pacific time)

sorry for so many posts, but between the link not showing up correctly and now one last thing. I have noticed that posting anon is not a good idea. When many post anon it just gets confusing. Make up something if nothing else. I chose historian, cause I like history. I think its best not to use anon. Just my opinion. I will use "historian" from now on. THanks for your patience Daniel. In closing, hey all, I got mad at Daniel also awhile back. But my anger came not from him bashing America, cause everything he says is true. My anger came because I feel I see the true reason, and because he does not address the true reason, it made me angry. I am calm now, and hope to have better and more productive conversations.

Anonymous April 26, 2010 2:45 pm (Pacific time)

Hey Eddie. Those "forces I speak of are real people. Starting with the Rothchilds. YOu have to search some history but its all clear. Those that make millions, or tens of millions are not the problem. It is the bankers who are the problem. Remember last week, when our state treasurer used his per diem for meals when he got them free? 800 bucks? who cares. What people did not notice, but I did, is who he was meeting with in Vienna. Apec. So I researched. Apec led to an organization called "finance in motion". Basically a propaganda tool. Then, I looked up who owns "finance in motion" was a sal oppenheim bank. This bank has been around for 200 years. THey were part of the Rothchilds banking cartel. Sal financed Germany in WW1, and Rothchilds financed Europe. They finance both sides of wars. In fact, they push war to make money. The country that wins, pays interest, the country that loses gets all their assets bought up for pennies on the dollar. The problem goes much deeper than most know. My main gripe in life? Too many people are blaming the wrong people. :-)

Anonymous April 26, 2010 2:34 pm (Pacific time)

On your keyboard,above the "8" key has the asterisk when you use the shift key. There is something above the "7" key also, but it doesnt seem to come out on my posts so that u can follow the link I posted. . Anyway Daniel, hot off the press, China agrees with you, and I agree with China. Who would have ever thunk it. And who would have ever thought that we would be following what Russia did 60 years ago, and now, Russia is actually working towards a better democracy? Life and times are strange. Nothing new under the sun.

Plato April 26, 2010 1:09 pm (Pacific time)

Troll! Some wimpy canadian interloper...You are the typical weenie ignorant talentless genetic filth like you....May you join Satan real soon you ignorant horse's ass. What a punk! No doubt you never took any debate classes or learned how to argue with critical thinking skills/facts...As Plato told his students, go towards the light...

Well, your post was both informative and educational. I'll endeavor to use the obviously effective debating/critical thinking skills you so aptly demonstrate.

Your mother wears army boots.  (Pretty weak, but see, I'm learning already.)

eddie zawaski April 26, 2010 1:04 pm (Pacific time)

I would just like to add a comment to the person who advocates for a flat tax. Steve Forbes, a very wealthy person, has been the primary proponent of such a tax for some time. Why? Because he is wealthy and such a tax would benefit the wealthy. How? Because a flat tax is on income which the wealthy can hide but the poor can not. For some reason, Americans have been brainwashed to believe that income tax is the only tax that counts as a real tax. This is very convenient for the rich as all the other taxes (FICA,Medicare, Worker's Comp, unemployment insurance, local property taxes and state and city sales taxes) are mostly paid by the working class. A flat tax on income would be nothing more than a palliative to reassure the working class that their betters are chipping in at the same rate.
And to anonymous who thinks the real enemy is not the rich but some mysterious forces who keep wages down, the mysterious forces are the rich. The rich don't work. They make their money by renting the property they have accumulated. The less they have to pay to the rest of us who work on their property, the richer they get. It's no mystery. You either own it or you work for it and you know which side you are on.

Thanks, Eddie. Let's not forget that Steve Forbes is an inheritor. 

Anonymous April 26, 2010 12:39 pm (Pacific time)

the link posted for the 13 minute video, well, you have to change the "and" to "and"... I think its a software glitch salem-news has. anyway, thanks, and hope you watch the video. And Daniel, democratic societies always end up dictatorships/tyrannical etc. THose with the most money buy the media, the politicians and so forth. This is why the founding fathers made an attempt by writing the Constitution and using basic rules (that could be ammended thru vote as times change), to keep this from happening again. Well, the Constitution was ignored,and ....voila. The video is more important tho, hope you take the time to watch it. Change the "and" to the symbol "and" that is in the link.. Hope u have a great day all.

Anonymous April 26, 2010 8:13 am (Pacific time)

I would not normally post a 13 minute video, but this video, altho a bit vague due to time constraints, will explain how the U.S. got this way. It explains, the false war on terror, how/why they use indoctrination camps on the children, the drug war, climategate etc. Just received it this morning in my email.

Anonymous April 26, 2010 12:01 am (Pacific time)

By the way, the kids I see today are having a hell of a hard time making it in the labor market when they can't do better than y$15 an hour in construction. Twenty years ago, those jobs were paying more, and in some cases, you could get benefits. So, the REAL enemy might not be the extremely wealthy, but the forces that cause the labor costs to fall so low that those without an education can't even take care of themselves, let alone raise a family.

My thesis about the super-rich is that they are the ones who run the show. The Forbes 400, for example, had assets in 2009 of $1.267 trillion. You can look it up:

This works out to a net worth of more than $3 billion each. Considering that these individuals are parts of families, assume an average of 20 members/family unit and you have fewer than ten or twenty thousand people controlling tremendous concentrated wealth.

Let's not fantasize about how all these people "earned" their ultra-privileged place in the system.

Anonymous April 25, 2010 11:00 pm (Pacific time)

I agree that the ability for the common person to make a fortune in America is very much overrated. I worked hard to get a good education and have found it hard to make more than $100K per year, no matter how hard I work. The only way to go beyond that in the "real world" is to work longer hours or move to where there are special opportunities. However, neither works if you want quality family time. But I also know that I am heavily taxed to afford for those who have not worked as hard as I to make it where I am. I think that more Americans need to step up and not settle for second best. That is where we are heading, regardless of anything else. I have a Russian in-law who came here with his family and they all seem to hold their hands out for every "benefit" they can get, all while lying on their taxes and getting cash back on the earned income credit. His family also has child after child and refuses to get insurance, even though it is affordable on his income. This disturbs me more than many things you have written about. I which there were better upward opportunities for the "working stiff" and wish I could make it beyond the top 4 or 5 percent into the top 1 percent. Is it fair? I know that a lot of the local wealth is still from the families who came to the area during Homesteading. Was THAT distribution of land wealth fair, and is the current effects of it fair? That is how it is, and I guess it had to go to someone. I would like to see the highest wealth individuals pay more in taxes....

I think we are in basic agreement. 

Anonymous April 25, 2010 8:01 pm (Pacific time)

It doesn't matter what facts you present and use to further your bashing, nor does it matter if you want to discount my comment. I think you are doing yourself a disservice by bashing America. It reflects poorly on your writing style. Your article rehashed information that was created by others, in books, etc. Your comments are what I take offense to, by the way. The facts I agree with, overall.

So, you agree with the facts. Do you also agree that, no matter who says it, unless some fundamental attitudinal changes are made in the way you handle your democracy, the wealthy of America are sending the American people to hell in a handbasket? 

Anonymous April 25, 2010 6:52 pm (Pacific time)

I am not a big fan of the America bashing, thanks you very much.

Where's the bashing? What facts don't you like? 

Myron April 25, 2010 6:26 pm (Pacific time)

I'm not distracted at all Mr. Johnson, for I simply don't agree with your premise that we are an unequal society, in fact just the opposite. 

Ah, Myron, I see you're just a troll. You're also arguing under the name Keith.

Lundberg had a term for people like you--counter-savant--people who argue a demonstrably false thesis for reasons known only to themselves. To attempt to argue that American society has any real equality is to argue that black is white. 

Joe April 25, 2010 2:17 pm (Pacific time)

I suggest all you America haters watch the History Channel tonight and you'll see why the USA is the best most awesome society that has ever been on this planet.

You underestimate. The USA is the greatest society not only in the Galaxy, but in the known universe. 

If you're going to be chauvinistic, you have to get it right. 

Myron April 25, 2010 10:53 am (Pacific time)

Mr. Johnson thanks for your response and I will endeavor to get a copy of the book you suggested. I could not agree more that we all pay taxes everytime we purchase something, but what I was pointing out is that the services we receive from the tax revenue stream reaches us all, and some get far more than they put in, which is fine with me. Have you seen our tax tables? They are quite progressive, that's why I referenced a "flat tax" which could be a boon to our economy as per prevailing theories. I want all of our people to have high quality lives. The bottom line is what quality of life do we have in America on average and how does it compare to the rest of the world? Just what bang do are tax bucks provide? I took a little time and did some research on your wonderful country for comparative purposes to see how your revenue distribution unfolds. In CANADA: ..."both inequality and poverty rates have increased rapidly..., now reaching levels above the OECD average. Income inequality and poverty have increased rapidly since the mid-1990s.
In the last 10 years, the (CANADIAN) rich have been getting richer leaving both middle and poorer income classes behind. The rich in Canada are particularly rich compared to their counterparts in other countries – the average income of the richest 10% is US$ 71,000 in purchasing power parities, which is one third above the OECD average of US$54,000.
Over the past 10 years poverty (meaning people who live on less than half median incomes) has increased for all age groups, by around 2 to 3 percentage points to an overall rate of 12%.
The poverty rate of older people is only 6%. However, 15% of children are living in poverty." . Maybe this is why Canada has a higher suicide rate than America? Canadian women and men 25% and 12% higher than in America respectively. An alarrming trend are the Suicide rates in the Canadian Native population which are more than twice the sex-specific rates, and three times the age-specific rates of non-Native Canadians (56.3 per year per 100,000 persons for Native males and 11.8 for Native Females). Among Aboriginal males, the rate for the 15-24 year age group was 90.0. This is more than double that for all Aboriginal males: 39.0. Big difference in American Native American suicide rates: The Centers for Disease Control and Prevention report that, from 1999 to 2004:
The suicide rate for American Indians/Alaska Natives was 10.84 per 100,000, higher than the overall US rate of 10.75.
Adults aged 25-29 had the highest rate of suicide in the American Indian/Alaska Native population, 20.67 per 100,000. Since we are talking about and comparing essentially similar native populations, why the difference, what are the causal variables? Could it be access to resources? Other factors?

You're letting yourself get distracted. The whole point of the article is to show that the U.S. is the most unequal society economically of all the developed nations. We have economic concentration here, as well, but not nearly as bad as the U.S. In a "democratic"nation, you, the people have the opportunity, at least in principle, to make things better for the majority of people. To do that requires an informed populace. That's why I write as I do. 

Myron April 25, 2010 8:18 am (Pacific time)

What would round out this article would be who is paying the taxes? What's the distribution? Considering that half of American wage earners do not pay any income tax, then what tax paid services does that 50% (or so) get out of the system? We have people who do not work, or work part time that get earned income tax credit checks in the thousands. Sometimes way beyond what they earned in part-time work. How about those people who have kids? How much tax revenue goes towards a single childs education in public school per year? For example, "John and Jane" have a household income of $40,000, they have five kids. It cost over $8,000 per child per year to educate in public school. Then there are countless other services "John and Jane" receive above and beyond their kids education, for example the infrastructure, police and fire services, and on and on. The bottom line even those who have no income and are on some type of welfare are doing better than the vast super majority of the rest of the world. It would be great if we could just go to a flat tax, that would allow for all people to pay their fair share, and still those earning big bucks would [still] pay the majority of taxes, and the poor would [still] live better than the average European. Of course those who are pure socialists would find this unacceptable because everyone should be equal, yeah that really provides incentives for the talented high achievers.

What it comes down in the final analysis is that all taxes are paid by ordinary people, working or not. It's the top few percent who pay little or no taxes. Take Bill Gates as just a prominent example. He has wealth in the neighborhood of $50 billion. If he had paid any kind of progressive tax over the years, he would still be very wealthy, but he would have contributed a large share of his income to the commonweal. He paid a miniscule percentage of taxes, far less than any of his employees.

Lundberg wrote: "It would be foolish to contend that there is a propertied elite in the United States and then not be able to show that this elite accords itself fantastic tax privileges down to and including total exemption."

Lundberg's book is, of course, long out of date in terms of people and numbers, but it is still a current critique of the American system. I recommend you find a copy (your library may have one, but you can more likely buy a used paperback) and in this case read Chapter 9: The Great Tax Swindle. 

douglas benson April 25, 2010 8:15 am (Pacific time)

Good morning Dan . Dont forget that the super rich rule the whole world not just America . This is not a matter of a few rich and powerfull its the system itself . There is one holdout that doesnt participate but it soon will by hook or crook Iran. Iran best listen up they have thier chance to join the IMF or suffer an invasion and then join. Much like the terminator movie its the system itself not one computer or in this case its not one group that is the threat its the system reaching its natural fruition . One of my favorite books is confessions of an economic hit man a must read for anyone confused by the complexity of what is happening . So they say we are in a recession but nothing has gone anywhere all the credit [money] all the real property ect is still there . So where did it all go ? As I see it they have two choices ,one call in the debt and take it all ,or two forgive or reset the system just enough to keep the masses countries ect from rebellion or doing something radical like goverments taking back the banks and giving the IMF and WBO ect the finger as a matter of self-preservation . What if America decided to default on our debt what could they really do ? Roll out UN forces ? Good luck boys ,first you have to get around our military and then you have to put down the citizens that are armed to the teeth [thank you president Obama ]. The real problem they have is the system is designed to be the puppet master not the ruler and they are scrambling to find a solution that keeps the system in place ,and like any creditor will soon be forced to take far less than they are owed when the debtor cant pay. As for politicians being bought and paid for that hasnt changed for a couple hundred years .They have one major problem in this country money cant buy the peoples vote . Ask Gov. Ventura who ran on 5,000 against politicians who spent millions and according to him of great intrest by the CIA . This power is the key how bad will it get before the people decide to put away thier petty differences ,become involved ,and remind the world we the people rule here is hard to tell.Peace

Vic April 25, 2010 7:00 am (Pacific time)

Great article! There is a class war going on, but 90% of us don't realize it. In any kind of war, not realizing that war is being waged against you is a real disadvantage.

eddie zawaski April 25, 2010 6:19 am (Pacific time)

Your statistic showing that 39% of Americans think they are or will soon be in the top 1% in income illustrates perfectly how brainwashed working class people are in the US. Working people in the US totally reject their own reality, believing instead that they are owners-to-be. This point of view is very convenient for the super-rich as it allows them to steal from the workers with abandon while the workers think somebody else is paying the bill for all the elite's excesses. In most countries in the world when a rich person passes by in his limo, working people look up and think, "someday, you jerk, you are going to be riding the bus just like me." In America, working people in the same situation look at the passing wealthy sojourner and think, "Someday, I'm going to have a limo just like that!" These are the two wishes of ordinary people throughout the world: either we will all share equally in the wealth of our world or we will all be able to have all of it for ourselves. Which dream is more realistic? The reality is that the super-rich are continually accumulating all the wealth of the world into their hands while the rest of us must be content with hard work and dreams.

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