It’d be simpler if we just gave all our money to the nearest billionaire

In attempting to comprehend the staggering fortunes possessed by the world’s multi-billionaires, consider this: There are only six countries in the world with a gross domestic product bigger than the wealth possessed by 400 richest people in the United States. Could it really be that these titans produce more than the entire country of Brazil? Or Italy? Or Canada?

At the same time, more than 47 million people in the United States rely on government food assistance, and despite the federal food-stamps program (known formally as the Supplemental Nutrition Assistance Program), there are 49 million United Statesians who go hungry at least some of the time.

These two sets of facts are not unrelated.

The corporate media breathlessly reported, once again, on Fortune magazine’s annual list of the 400 richest people in the U.S., just published. These 400, Fortune reports, have a collective net worth of $2.3 trillion — an increase of $270 billion from last year. While this top of pyramid saw their net worth rise 12% in just the past year, the net worth of the bottom 75 percent has declined by more than five percent since 2010.

SerfsThe top ten on the Fortune list are familiar. Bill Gates, thanks to leveraging the personal-computer operating-system monopoly his company was once handed, continues to rank first. The Koch brothers, David and Charles, are tied for fourth at $42 billion each and four members of the Walton family, recipients of the capital amassed by Wal-Mart Stores Inc., are each among the top ten and collectively worth $144 billion.

The best democracy you can buy

As you might imagine, those billions buy a lot of political power. The Walton and Gates families are two of the three families that are the biggest bankrollers of the effort to place education under corporate control through charter schools. The Waltons amassed their fortunes through ruthless exploitation of its workers and relentlessly pressuring its suppliers to move production to China and then Bangladesh in search of ever lower wages.

Wal-Mart also enjoys vast subsidies — the company has received more than $1 billion in government giveaways, and a study of the costs of those subsidies and the public-assistance programs that Wal-Mart employees must use due to their miserably low pay add up to nearly $1 million per store. The average pay of a Bangladeshi garment worker who makes Wal-Mart’s products is US$75 to $100 per month.

Like the Waltons, the Koch brothers inherited their company. Koch Industries is one of the country’s worst polluters of the air and water as well as a major source of greenhouse gases. They are spending hundreds of millions of dollars in an effort to buy Congress and state legislatures in this election cycle alone; are major funders of the extremist American Legislative Exchange Council (ALEC) that literally writes legislation for its corporate membership; and even attempted to take control of the Cato Institute, the far-right libertarian “think tank” that, despite agitating for the end of Social Security, was apparently not extreme enough for them.

The struggle for tens of millions to eat

At the other end of the spectrum, the charity organization Hunger in America estimates that 49 million people in the U.S. are “food insecure” and that 20 percent of the country’s households with children are food insecure. But those figures are based on U.S. Department of Agriculture statistics that are considered likely to be conservative. For example, the Food Research and Action Center, in its most recent study (for 2012) reported that 18.2 percent of those surveyed in a poll conducted by Gallup answered yes when asked if they did not have enough to eat at least once in the past 12 months. That translates to 57 million people.

The more than 47 million people who relied on food stamps in the U.S. in 2013 is an all-time high and, by way of comparison, the $80 billion cost of the program is less than the net worth of brothers Charles and David Koch. That net worth keeps rising despite the money they pour into their political pressure groups; the two have more than doubled their fortune in just the past four years. The cost of food stamps is also comparable to the $78.4 billion in profits that Wal-Mart has racked up in its five most recent fiscal years.

Let us remember that profit comes from a capitalist paying employees less than the value of what they produce. As Karl Marx demonstrated, the value of a product would be the same if the workers sold the commodity themselves, thereby retaining the full value of what they produced rather than having much of it taken by the capitalist. The portion taken by the capitalist therefore is the source of the capitalist’s profit and not the circulation of the product.

There is a reason that we are enduring a decades-long race to the bottom. Although the corporate press would like you to believe the propaganda that vast fortunes result from the magical acumen of captains of industry, the reality is ruthless exploitation. Inequality does not fall out of the sky.

Attacks on critical thinking vs. cheers for scapegoating

By Pete Dolack

On the surface, it seems a mystery. Occupy Wall Street protestors organized peaceful protests, concentrated their critiques on the financial institutions responsible for the worst economic downturn in eight decades and consciously used inclusive language to unite people. Yet Occupy was subjected to brutal police assaults as part of a coordinated government campaign against it, and has increasingly faced volleys of disapproval in the mass media.

By contrast, “Tea Party” protestors routinely used threatening language, brought weapons not only to their own demonstrations but to public talks of government office holders, attacked government institutions in denunciatory language and sought to divide people through scapegoating. Yet the Tea Party was lovingly embraced by the mass media and allowed to operate unimpeded by law enforcement and other institutions.

These contrasting responses were not monolithic, and we can all cite exceptions. Nonetheless, there is no mistaking the general tenor of the responses. On the surface this may appear to be a mystery, but it is not at all mysterious once we examine a little closer.

Occupy was and is a genuine grassroots movement, and the hundreds of Occupies that spontaneously followed the example of Occupy Wall Street demonstrated that a large pool of discontent and anger about the corporate domination of the United States exists. That discontent may sometimes be unfocused — leading to a sometimes confusing plethora of messages at Occupy encampments and demonstrations — but it is very real, based on the reality of the lives of working people (including students). And it is precisely this bottom-up self-organization that engendered the wrath of the establishment.

The Tea Party seeks to deflect anger from corporate elites consumed by greed and arrogance who bend the country’s institutions to their benefit, and instead pin the blame on “the government,” on minorities, on immigrants and any other handy scapegoat. This movement, although calculated to tap into genuine grassroots anger, was manufactured and materially supported by corporate benefactors. And this is the key to understanding the warm embrace given it.

Both movements result from a pervasive feeling of anxiety over an economic crisis now measured in years with no end in sight; both movements are fueled by people who know that “something is wrong” and seek answers as to why the present is bleak, why the future appears bleak and what can be done to change the stagnation or downward trend of the economy and all the social problems that piggyback on economic distress. Anxiety is not only due to worries about today or fears of tomorrow in times of uncertainty and instability; anxiety also flows from a lack of understanding. Why has the economy turned so sour, why is the malaise so persistent, why is this happening to me even though I went to work every day and studied hard in school?

We naturally wish to find the answers to these questions. One way to seek answers is to channel anxiety, anger, fear and frustration into study: Read, watch, listen, observe and discuss, until a picture begins to emerge. Modern economics and society is complex and globalization only hastens further complexity. But these are human constructions, and so most humans can understand them. It is only when we understand what had seemed to work but no longer does that we can begin to construct ideas and plans to improve our lives and give ourselves stability.

Another way to seek answers is to channel anxiety, anger, fear and frustration into emotional release: Designate scapegoats from groups that are either unpopular or are vulnerable. Those scapegoats can be immigrants, they can be racial, ethnic or religious minorities, they can be women. Or the scapegoat can be “the government,” reduced to an abstract entity that somehow hovers above society as an alien force. Scapegoats have in common that they represent an “Other,” somebody or something outside or different, and thus liable to be portrayed as an impurity “polluting” society.

Scapegoating is seductive because it taps into emotion. Very real emotion, for the anxiety, anger, fear and frustration felt by Tea Partiers, Occupiers, sympathizers of one or the other and people who do not identify with either movement is based on the concrete realities of their lives. A belief that tomorrow will be better than today, that our children will live more comfortably than their parents is woven deeply into the fabric of advanced capitalist countries, and perhaps that sense of optimism has been nowhere stronger than in the United States, where such beliefs are inseparable from the expansionism, dynamism and geographical diversity that are foundations of its traditional ethos.

When long-held beliefs crumble, answers are naturally sought. Easy answers tap into emotion. Emotions are real, genuine and should be taken seriously. We share many emotions; we share a desire to understand. A cliché that is often repeated because it is true despite being a cliché is the statement that a lie can travel halfway around the world before the truth can finish lacing up its boots. A parallel can, and should, be drawn: Emotions take root much faster than the concrete. In no way is that meant to suggest that emotions are “lies” — emotions, again, are very real. In our personal lives, we become upset, but we talk and analyze, and although we may still be upset, we come to understand and thus are much better equipped to do something to change the situation that made us upset.

Zooming out from the personal to the societal, we can see similarities. But, since we are back to discussing large, impersonal social forces and institutions, what if the controllers of those institutions want to deflect attention and avoid blame for their actions? Tapping into emotions is a sure way of achieving those results, and if those institutions are very wealthy and very powerful, they can create entire movements (and new institutions) to suit their purposes.

The Tea Party is a prominent example. Tea Partiers wanted answers as to why the foundations around them are crumbling. Just as the Wizard of Oz wanted Dorothy to look elsewhere, Tea Party organizers point in another direction and yell, “It’s them, over there.” And who are the organizers of the Tea Party? By that question, I mean the originators and, in particular, the funders of the Tea Parties, not the people who became involved and assumed leadership roles in their local communities. We can readily see that some of the most active members of Corporate America are the organizers.

At the very top of the list are three entities: the Americans for Prosperity Foundation, FreedomWorks and Fox News. FreedomWorks is a group of corporate lobbyists run by Dick Armey (a hard-line Republican Party operative who once was majority leader in the U.S. House of Representatives) that was the primary organizer of the early Tea Party protests. Americans for Prosperity is a lavishly funded and tightly controlled pressure group founded by David and Charles Koch dedicated to promoting the Koch brothers’ business interests and extremist political philosophies. Fox News is one of the most notorious pieces of Rupert Murdoch’s media empire, an empire dedicated to promoting Murdoch’s business interests and extremist political philosophies.

Other corporate interests have made their contributions, but without these three groups there would be no Tea Party. Americans for Prosperity is a crucial funder of FreedomWorks, and both organizations are behind a series of initiatives to deny the reality of global warming, attack any and all regulation of business and promote libertarian political ideas, such as eliminating Social Security. Fox News is an active promoter of these agendas. Together, bottomless sums of money, corporate muscle, the ability to control a myriad of institutions and the power to have their agenda adopted by the corporate mass media was leveraged to coordinate and tap into the anger felt by millions of people, creating the corporate-inspired Tea Party.

As many other corporate elites similarly backed these agendas, they were undoubtedly happy to free-ride on the money and influence wielded by Americans for Prosperity, FreedomWorks and Fox News, the three of which provided the Tea Party with organizers, money, material support and publicity. Within any group, there will always be those who are the most active; the Koch Brothers, who fund a network of institutions to do their bidding, are among them in the ranks of big capitalists. Such people have the immense wealth and all the power that goes with that wealth to have their viewpoints and messages suffused throughout a society through continual repetition via a spectrum of outlets.

A critical component of those messages must be a deflection of blame. Government is a handy scapegoat, and an easy one because very few of us has not had at least one frustrating experience with a bureaucracy. Government has to be portrayed as an alien force disembodied from society, demonized for “interfering” in the lives of people. But government is not an abstract entity, it is a reflection of the social forces inherent within a society; its actions and policies will most often harmonize with the most powerful.

No objective analysis of government can deny that corporations reap enormous benefits from government — through contracts in an ever increasing variety of industries, the passing of laws in legislatures that not only benefit them but are frequently written by their lobbyists, the building and maintenance of transportation and other public infrastructure, the public assumption of the costs of business such as pollution mitigation, and an ever widening collection of subsidies.

If government is part of the problem, than it is because it has become dominated by corporate elites. Corporate elites reap the benefits of inequality and want to keep it that way, or widen the inequality. It is corporate elites who benefit from moving factories to new countries, from mass layoffs and a system that funnels enormous sums of money upward. It is a big job to obscure these obvious facts. And only corporate elites have the money to fund such a campaign so they can continue to reap personal rewards from this system’s continuation.

Given the web of domination by corporate elites, it then becomes no surprise that their creation, the Tea Party, is lavished with affection while the Occupy movement that challenges them and fosters independent thinking is attacked. Today is the national holiday in the United States in which the country celebrates its founding and its defining themes of “freedom” and “liberty.” But, as always, we should ask: Freedom for who? Freedom for what?

The world’s richest 22 people own more than Switzerland produces

By Pete Dolack

The wealthy are wealthy because they work harder than you: So goes a favorite parable. Many wealthy people undoubtedly do work hard; at least those who amassed it themselves rather than inheriting it.

But is it really possible that 22 people could work harder than the entire population of Poland? Or Switzerland?

It safe to assume there are millions of Poles and Swiss who work diligently at their jobs. Yet the gross domestic products of Poland, Switzerland and most other countries of the world is smaller than the wealth amassed by 22 people.

The top of an extraordinarily steep pyramid is in the stratosphere. There are 22 people in the world who possess US$20 billion or more of assets, according to the 2012 edition of Forbes magazine’s annual list of the world’s billionaires. Those 22 people have a combined total of $675 billion in assets. You read that correctly: two-thirds of a trillion U.S. dollars. There are only 18 countries in the world with a gross domestic product of more than $675 billion, according to World Bank calculations.

So, yes, 22 people have more than is produced by the entire country of Switzerland — one of the world’s richest countries — and more than the 38 million people of Poland, one of the European Union’s biggest countries.

The corollary of the wealthy supposedly working harder than the rest of us is that they really don’t have that much, and taxing them would be useless in terms of reducing government deficits. When we peer into the numbers, however, that mantra has no more basis in reality than the idea that 22 people work harder than entire countries or that U.S. chief executive officers work 340 times harder than their employees.

The “World Wealth Report 2012” just issued by consultancy Capgemini and Royal Bank of Canada, intended for financial-industry professionals, contains some interesting facts about the people the financial industry reverently calls “high net worth individuals.” These fortunate folks are those with at least US$1 million at their disposal for investment — a sum that does not include the value of personal assets and property such as primary residences, collectibles and consumer durables. (Therefore, this report does not include all accumulated wealth, as the Forbes list does.)

What do we find? That there are 11 million people in the world who qualify as a “high net worth individual” and these 11 million people have a combined investable wealth of US$42 trillion. Because it is impossible to imagine a number that large, think of it this way: That total is equal to two-thirds of the world’s gross domestic product. Those 11 million people represent not the one percent, but the top 0.16 percent of Earth’s population.

Let’s tease out one more number from the Capgemini report. In the United States and Canada, there are 3.4 million “high net worth individuals” — quite close to constituting North America’s one percent — and they have disposal income for investment totaling US$11.4 trillion. The economist Richard Wolff, in his Economic Update radio show, points out that if only these people were taxed 10 percent for this portion of their wealth — their fixed assets such as mansions, yachts and collectibles such as works of art would remain untouched — the entire yearly U.S. government budget deficit would be eliminated.

There is nothing unique about the U.S. A British economist, Michael Roberts, writes that the wealth of the 1,000 richest people in Britain has increased by £315 billion in just the past 15 years, and taxing only those gains at Britain’s capital-gains tax rate of 28 percent would cover 70 percent of the government’s total deficit.

As has been noted before, such people would prefer to loan governments money, with interest, rather than pay taxes. And then they complain that the government is borrowing too much and demand austerity be imposed. Theoretically, they could use their accumulations of wealth for productive investment, which would at least create jobs. But, thanks to austerity — and the high unemployment and reduced wages that result from it — demand is stagnant. If there is too much productive capacity and/or corporations can’t sell the products they already produce, then there is no economic rationale to invest in new production. Thus U.S. corporations are sitting on $2 trillion of cash and the wealthy pour their immense income into speculation because they have more than they can possibly spend, there being too few investment opportunities, and speculation is more profitable than production.

When too much money is chasing too few assets, a financial bubble inflates. But the bubble always bursts. And the bigger the bubble, the bigger the fall.

When the bubble bursts, the banks are bailed out and the rest of us are sold out, as the saying goes. The net result is a still greater concentration of wealth and more people pushed into or toward poverty, forced to rely on government assistance. But that puts more strain on governments, which become more reliant on the wealthy to loan them money, more desperate to give corporations giveaways in the hopes of a few more jobs being created locally, and progressively weaker in relation to corporations. Corporate dominance intensifies, and executives and speculators are able to increase the wealth they extract from the corporations they control and reduce their tax bills. Round and round it goes until a mass movement reverses a downward spiral.

Just what is it that the wealthy do to accumulate so much? Let’s return to the tip of the tip of the pyramid: Those with $20 billion or more in total wealth. Eleven of the 22 who have accumulated this fantastic level of wealth are residents of the United States. Who do we find? Four members of the Walton family (heirs to the Wal-Mart fortune); the Koch brothers (who inherited their oil and gas empire from their father); a financial speculator who crashed more than one currency; two software moguls (taking advantage of a technology created by the U.S. government); an owner of casinos; and one highly successful investor, Warren Buffett.

Wal-Mart’s leading role in the race to the bottom is well documented. Wal-Mart is extraordinarily ruthless in cutting its costs — not uniquely bad, merely the company most efficient — and has done more than any other entity to cause production to be moved to Chinese sweatshops. Wal-Mart is a company notorious for its hatred of unions and pays so little that new employees are handed application forms for food stamps.

Taxpayers thus are subsidizing Wal-Mart’s profits; sweatshop workers are brutally exploited; jobs in advanced capitalist countries are eliminated; and communities ravaged as local mom-and-pop businesses are forced to shutter. In all these ways, more money is funneled upward into the Wal-Mart central office, and away from local communities. That is how the Walton family accumulated its fantastic wealth — the four members are each individually among the richest 11 people in the U.S.

The Koch brothers are becoming well known for their attempts to create an ideological monopoly within the United States. Their father was one of the leaders of the John Birch Society, an extremist group that was the “tea party” of the mid-20th century, going so far as to denounce Dwight Eisenhower as a “communist”! The sons have learned well, bankrolling the tea party movement of the extreme Right, funneling huge sums on money into a variety of extreme Right causes and institutions, funding libertarian ideology, and directing the policies of, among others, Wisconsin Governor Scott Walker and his anti-union, anti-government austerity program.

The two Koch brothers have $50 billion between them — so they can afford to donate millions of dollars to cultural organizations to “greenwash” their image without losing the ability to impose their agenda. Thanks to their lucky birth, they are tied for fourth place on the list of richest U.S. citizens, and they are going to make certain they are not dislodged.

Then we have Microsoft founder Bill Gates and Oracle founder Larry Ellison. We are supposed to believe that Silicon Valley moguls created vast wealth. They did — for themselves. But they did so by taking advantage of what others created. Amidst all the celebrations of newly minted computer billionaires, it is easy to forget none of it would have been possible without government research. The Internet is a creation of the U.S. Department of Defense, which had a strong interest in creating a decentralized means of communication that could not be knocked out at a stroke; many universities, including public universities, helped in the Internet’s creation; and the world wide web is a product of CERN, the European intergovernmental research institution.

Many other industries exist due to government funding — the Internet is merely one example of public investment converted into private profit. Microsoft was accidentally handed a monopoly on personal-computer operating software by International Business Machines before IBM had any inkling of how ubiquitous PCs would one day become, and Microsoft’s billionaires have cashed in by leveraging the company’s monopoly without innovating any products as mythology would have us believe.

Even Warren Buffett has profited nicely from financial legerdemain. He is the largest shareholder of one of the three main credit-rating agencies, Moody’s. Those agencies played a critical role in the housing bubble by giving sterling ratings to high-risk bundles of mortgages and other speculative financial products, and those agencies continue to play their role within the world of finance capital by repeatedly downgrading the ratings of governments, forcing higher payments of interest to the wealthy who loan money to governments instead of paying taxes.

The rest of the tip of the pyramid seem not so impressive compared to the tip of the tip, although we need not shed tears for them. Last October, the Swiss financial company Credit Suisse published its “Global Wealth Report 2011,” which also revealed interesting information. For instance, the world’s most wealthy one percent own 44 percent of the world’s wealth, while the bottom 50 percent collectively own one percent. Nor is the further concentration of wealth we have experienced since the rise of neoliberalism at the start of the 1980s in your imagination. Credit Suisse’s report states:

“Available evidence suggests that household wealth in mature economies was a fairly constant multiple of income for much of the 20th century until 1980, after which the wealth-income ratio has trended upwards. … Financial assets in [Group of Seven] countries also show little change relative to income up to 1985, when a regular pattern of growth began.”

In plain English, what the report is saying is that the accumulation of wealth by “high net worth individuals” is outstripping gains in income — wealth is becoming more concentrated. It takes money to make money, the old saying goes. And it is more effective than working.

David and Charles Koch can create a network of institutions and bankroll a national movement that promotes their business interests. Bill Gates, the Walton family and an allied billionaire can personally direct the thrust of education toward a narrow training in technical skills shorn of courses that teach independent thinking, and work to replace public schools with corporate-controlled “charter” schools. Their peers can fund an overwhelming bombardment of ideology to suit their elitist agenda.

Wouldn’t it be better for decisions in education and all the other fields important to the public be made by the public through democratic, accountable institutions? Wouldn’t democracy be better than plutocracy?