Thursday, March 15, 2012
And, as you might have guessed, the concentration has intensified in recent decades:
The aftermaths of the Great Recession and the Great Depression produced sharply different changes in U.S. incomes that tell us a lot about tax and economic policy.
The 1934 economic rebound was widely shared, with strong income gains for the vast majority, the bottom 90 percent.
In 2010, we saw the opposite as the vast majority lost ground.
National income gained overall in 2010, but all of the gains were among the top 10 percent. Even within those 15.6 million households, the gains were extraordinarily concentrated among the super-rich, the top one percent of the top one percent.
Just 15,600 super-rich households pocketed an astonishing 37 percent of the entire national gain.
A more damning indictment of the domestic policies of the Obama administration is hard to imagine.
The top one percent enjoyed 45 percent of Clinton-era income growth, 65 percent of Bush-era growth and 93 percent of Obama-era growth, though that is only through 2010.
INITIAL POST: Like many of you, I have pretty much tuned out the 2012 presidential campaign. From the fragments of media coverage that I have encountered, the Republican candidates are fighting about which one is this most militaristic and willing to transfer the most wealth to the top 1%. Meanwhile, President Obama is strategically counterpunching, taking advantage of the nascent economic recovery and opportunities to look reasonable in comparison to the religious right lunacy that periodically erupts during the Republican primaries.
But the real story, the one with the most importance, is the extent of the corruption of the US electoral process, as related by the indefatiguable David Dayen. 5 people are responsible for 25% of all SuperPAC contributions, political action committees that may raise and spend money independent of the candidates, with 200 people are responsible for 80% of them. Through the end of January, SuperPACs have spent nearly as much money on the Republican primary campaign as the candidates themeselves. It is fair to say that Newt Gingrinch would be out of the race if not for the open checkbook of Sheldon Abelson and his wife. Of course, President Obama, unopposed on the Democratic side, has no need for such expenditures at this time, but has endorsed SuperPAC efforts on his behalf.
For a good summary of the tentacular strangulation of the electoral process by SuperPACs, and the relationship of the wealthy donors who finance them to specific Republican candidates, go to this post at I Acknowledge Class Warfare Exists. Based upon the most recent information, OpenSecrets.org has determined that 379 SuperPACs have raised over $130 million dollars and spent over $77 million of it in this election cycle, with some of it directed outside of the presidential campaign. At this rate, SuperPAC spending for the entire campaign could exceed $400 million, and this is a conservative estimate, given the explosion of spending that will take place after the Republican and Democratic nominees are selected.
Why, you ask, am I walking through all this reported campaign finance data generated by well meaning journalists and liberal sunshine organizations? I am doing so because it should induce us to ponder whether we can bring about any meaningful change in this country through any participation in the electoral process. Preliminarily, it is essential to observe that this data conclusively pulls down the curtain on that brief period of progressive optimism during 2008, an unwarranted optimism based upon the utopian notion that presidential candidates, like Obama, could fund their campaigns independent of wealthy donors through small donations over the Internet. As reported just after the 2008 campaign by the Campaign Finance Institute, Obama received 74% of his contributions from people who contributed over $200, with large donors, defined as people who contributed over $1,000, providing 80% more funding than small donors, defined as people who contributed $200 or less.
Michael Malbin, the executive director of the Institute, reached the following conclusions from his evaluation of 2004 and 2008 campaign finance data:
It is important to go through this recent history because it provides some insight as to why the Obama presidency adopted a neoliberal, militaristic course instead of a progressive one. Contrary to the public relations associated with the 2008 campaign, Obama was as dependent upon contributions from wealthy donors as past candidates, he was merely able to supplement them more effectively with a large, aggregate amount of small donations because of the enthusiasm generated by the prospect of electing a charismatic, young, potentially progressive, African American president. Obama revealed the true course of his presidency shortly after his election through his appointments of people like Rahm Emanuel, Robert Gates and Timothy Geithner. The naivete of Obama's supporters at the time, still intoxicated with the euphoria of his victory, was almost heartrending. I still remember my KDVS radio program co-host saying, with a straight face, as if were entirely plausible, that Robert Reich would be an excellent choice for Secretary of the Treasury.
. . . While the large donors thus were responsible for much more of Obama's money than either his small or middle range group, he received somewhat less proportionally from large donors than did his rivals or predecessors. Forty-seven percent of Obama's money came from large donors compared to 56% for Kerry and 60% for both Bush and McCain. However, because Obama's 47% is based on a larger total, that means he also raised significantly more large-donor money in absolute terms than any of his rivals or predecessors.
Much of this money was raised the old fashioned way. Since only about 13,000 of those who started out small for Obama ended up crossing the $1,000 threshold, that means the bulk of Obama's $213 million in large-donor contributions during the primaries came from about 85,000 people who started out giving big and stayed there. Much of this large-donor money – perhaps close to a majority – came to the campaign through bundling methods initially perfected by Bush.
According to the Center for Responsive Politics (CRP) – which in the absence of legally mandated disclosure had to use information provided by the campaigns – 561 bundlers had raised a minimum of $63 million for Obama by mid-August and 534 people had raised a minimum of $75 million for McCain. The bundlers undoubtedly were responsible for more than these amounts because the campaigns reported the bundlers in ranges and CRP's minimum totals were based conservatively on the low end of each range. A reasonable guess might estimate the real amount at about 50% above the minimum – the mid-point for each range – yielding a total of perhaps about $90 million for Obama as of mid-August and more than $100 million for McCain.
Now, the situation, as documented by groups like OpenSecrets.org, is more transparent. Not necessarily worse, but more easily understood. The US electoral process remains dominated by people able to contribute large sums of money, but much of it is received from a shockingly small number of people, as explained by Dayen. Given that the 2008 progressive effort to transform the US socioeconomic system through participation in the Obama campaign has failed, an effort proselytized by an array of people ranging from Bill Fletcher to Barbara Ehrenreich to Tom Hayden to Jesse Jackson to Melissa Harris-Perry to the late Howard Zinn, among others, what is the alternative to another such failed effort? Can we really expect to incrementally democratize the US political system through political and legal reformist endeavors in the face of such concentrated financial power? With the participants of Occupy struggling with internal conflict and police repression, such questions retain their difficulty and their urgency. Difficult, because the possibility of a mass confrontation with US and transnational elites still appears unlikely, urgent, because the distress associated with their violent, rapacious practices shows no sign of abatement.