We have no sign that the luck of that top 0.01 percent will be turning anytime soon. (Photo: Philipp/cc/flickr)
How to Recognize a Plutocracy: The Dead Giveaway
A political system that pays no more than lip service to average people’s problems and works diligently instead at protecting — and growing — the wealth of the already wealthy
How can we tell when a democracy, or rule by the people, evolves into a plutocracy, the reign of the rich? Easy. We have a democracy when a political system can and does make a good-faith effort to address the problems average people face.
In a plutocracy, on the other hand, the political system pays no more than lip service to average people's problems and works diligently instead at protecting -- and growing -- the wealth of the already wealthy.
By this simple standard, we Americans today unquestionably live in a plutocracy. Our latest slam-dunk evidence: the record of the decade since the Wall Street financial crash ushered in the Great Recession.
Almost exactly ten years ago, in late summer 2008, the tremors that had been roiling the U.S. economy ever since the housing bubble popped the year before turned into an economic earthquake. The giant Lehman Brothers investment bank fell into one yawning fissure. The giant insurer AIG stumbled toward another.
" Citigroup appeared poised to go down next, with General Motors and Chrysler to follow," remembers the New Yorker's George Packer. "Everything solid in the American economy turned out to be built on sand."
No American born after the 1929 crash had ever since anything like this. In quick order, about 9 million workers lost their jobs. About the same number of families lost their homes.
What happened next? Plutocracy happened next. The American political system came rushing to the rescue of the same elites whose frauds and financial manipulations had greased the skids for the crisis.
The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
Last week, a triumphant Wall Street celebrated that rescue, on the day the stock market reached a historic milestone: 3,453 days of bull market, arguably, the New York Times noted, the longest bull market in American financial history. Since March 2009, the share values of publicly traded companies in the United States have increased over 320 percent, creating, in the process, more than $18 trillion in new wealth.
The bulk of that new wealth -- the overwhelming bulk -- has settled in the pockets of America's affluent. The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
And what about the vast majority of Americans who own either no stock at all or precious little? As of 2016, the most recent year with full data available, the overall wealth of the median -- most typical -- American household is sitting 34 percent below that household's net worth just before the Great Recession began.
Average Americans are hurting on the income side, too. The 2008 crash and its aftermath, researchers at the Federal Reserve Bank of San Francisco have computed, are going to end up costing the average American $70,000 in lifetime income.
So what do all these numbers mean for the decade since the financial crash?
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
The nation's richest 0.01 percent, as the economists Annette Alstadsaeter, Niels Johannesen, and Gabriel Zucman have documented, now hold 9.9 percent of the nation's total wealth -- and 11.2 percent once we take into account the assets America's wealthiest have stashed in offshore tax havens.
We have no sign that the luck of that top 0.01 percent will be turning anytime soon. The enormous tax break for Corporate America enacted last December has 2018 corporate second-quarter profits up nearly 25 percent over 2017 levels.
And that surge comes above and beyond three decades of already rising corporate profits. Between 1984 and 2014, calculates London School of Business analyst Simcha Barkai, the share of the nation's output going to corporate profit more than tripled. In 2014, that increase shoved $1.35 trillion extra into the pockets of shareholders and business owners, the equivalent of $17,000 for every worker in America's corporate sector.
All these numbers, some might say, signal that our economic and political system isn't working. But the system is working -- for the rich. From a plutocracy, we shouldn't expect anything else.
Still, we can end here on a cheery note. Americans a century ago faced a plutocracy just like ours today. They beat their plutocracy back. We can do the same.
Urgent. It's never been this bad.
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission from the outset was simple. To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It’s never been this bad out there. And it’s never been this hard to keep us going. At the very moment Common Dreams is most needed and doing some of its best and most important work, the threats we face are intensifying. Right now, with just three days to go in our Spring Campaign, we're falling short of our make-or-break goal. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Can you make a gift right now to make sure Common Dreams not only survives but thrives? There is no backup plan or rainy day fund. There is only you. —Craig Brown, Co-founder |
How can we tell when a democracy, or rule by the people, evolves into a plutocracy, the reign of the rich? Easy. We have a democracy when a political system can and does make a good-faith effort to address the problems average people face.
In a plutocracy, on the other hand, the political system pays no more than lip service to average people's problems and works diligently instead at protecting -- and growing -- the wealth of the already wealthy.
By this simple standard, we Americans today unquestionably live in a plutocracy. Our latest slam-dunk evidence: the record of the decade since the Wall Street financial crash ushered in the Great Recession.
Almost exactly ten years ago, in late summer 2008, the tremors that had been roiling the U.S. economy ever since the housing bubble popped the year before turned into an economic earthquake. The giant Lehman Brothers investment bank fell into one yawning fissure. The giant insurer AIG stumbled toward another.
" Citigroup appeared poised to go down next, with General Motors and Chrysler to follow," remembers the New Yorker's George Packer. "Everything solid in the American economy turned out to be built on sand."
No American born after the 1929 crash had ever since anything like this. In quick order, about 9 million workers lost their jobs. About the same number of families lost their homes.
What happened next? Plutocracy happened next. The American political system came rushing to the rescue of the same elites whose frauds and financial manipulations had greased the skids for the crisis.
The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
Last week, a triumphant Wall Street celebrated that rescue, on the day the stock market reached a historic milestone: 3,453 days of bull market, arguably, the New York Times noted, the longest bull market in American financial history. Since March 2009, the share values of publicly traded companies in the United States have increased over 320 percent, creating, in the process, more than $18 trillion in new wealth.
The bulk of that new wealth -- the overwhelming bulk -- has settled in the pockets of America's affluent. The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
And what about the vast majority of Americans who own either no stock at all or precious little? As of 2016, the most recent year with full data available, the overall wealth of the median -- most typical -- American household is sitting 34 percent below that household's net worth just before the Great Recession began.
Average Americans are hurting on the income side, too. The 2008 crash and its aftermath, researchers at the Federal Reserve Bank of San Francisco have computed, are going to end up costing the average American $70,000 in lifetime income.
So what do all these numbers mean for the decade since the financial crash?
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
The nation's richest 0.01 percent, as the economists Annette Alstadsaeter, Niels Johannesen, and Gabriel Zucman have documented, now hold 9.9 percent of the nation's total wealth -- and 11.2 percent once we take into account the assets America's wealthiest have stashed in offshore tax havens.
We have no sign that the luck of that top 0.01 percent will be turning anytime soon. The enormous tax break for Corporate America enacted last December has 2018 corporate second-quarter profits up nearly 25 percent over 2017 levels.
And that surge comes above and beyond three decades of already rising corporate profits. Between 1984 and 2014, calculates London School of Business analyst Simcha Barkai, the share of the nation's output going to corporate profit more than tripled. In 2014, that increase shoved $1.35 trillion extra into the pockets of shareholders and business owners, the equivalent of $17,000 for every worker in America's corporate sector.
All these numbers, some might say, signal that our economic and political system isn't working. But the system is working -- for the rich. From a plutocracy, we shouldn't expect anything else.
Still, we can end here on a cheery note. Americans a century ago faced a plutocracy just like ours today. They beat their plutocracy back. We can do the same.
How can we tell when a democracy, or rule by the people, evolves into a plutocracy, the reign of the rich? Easy. We have a democracy when a political system can and does make a good-faith effort to address the problems average people face.
In a plutocracy, on the other hand, the political system pays no more than lip service to average people's problems and works diligently instead at protecting -- and growing -- the wealth of the already wealthy.
By this simple standard, we Americans today unquestionably live in a plutocracy. Our latest slam-dunk evidence: the record of the decade since the Wall Street financial crash ushered in the Great Recession.
Almost exactly ten years ago, in late summer 2008, the tremors that had been roiling the U.S. economy ever since the housing bubble popped the year before turned into an economic earthquake. The giant Lehman Brothers investment bank fell into one yawning fissure. The giant insurer AIG stumbled toward another.
" Citigroup appeared poised to go down next, with General Motors and Chrysler to follow," remembers the New Yorker's George Packer. "Everything solid in the American economy turned out to be built on sand."
No American born after the 1929 crash had ever since anything like this. In quick order, about 9 million workers lost their jobs. About the same number of families lost their homes.
What happened next? Plutocracy happened next. The American political system came rushing to the rescue of the same elites whose frauds and financial manipulations had greased the skids for the crisis.
The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
Last week, a triumphant Wall Street celebrated that rescue, on the day the stock market reached a historic milestone: 3,453 days of bull market, arguably, the New York Times noted, the longest bull market in American financial history. Since March 2009, the share values of publicly traded companies in the United States have increased over 320 percent, creating, in the process, more than $18 trillion in new wealth.
The bulk of that new wealth -- the overwhelming bulk -- has settled in the pockets of America's affluent. The nation's wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation's stock value, up from 81 percent in 2007.
And what about the vast majority of Americans who own either no stock at all or precious little? As of 2016, the most recent year with full data available, the overall wealth of the median -- most typical -- American household is sitting 34 percent below that household's net worth just before the Great Recession began.
Average Americans are hurting on the income side, too. The 2008 crash and its aftermath, researchers at the Federal Reserve Bank of San Francisco have computed, are going to end up costing the average American $70,000 in lifetime income.
So what do all these numbers mean for the decade since the financial crash?
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
"This is the decade," says the German economist Moritz Schularick, "in which wealth inequality has increased the most in U.S. history."
The nation's richest 0.01 percent, as the economists Annette Alstadsaeter, Niels Johannesen, and Gabriel Zucman have documented, now hold 9.9 percent of the nation's total wealth -- and 11.2 percent once we take into account the assets America's wealthiest have stashed in offshore tax havens.
We have no sign that the luck of that top 0.01 percent will be turning anytime soon. The enormous tax break for Corporate America enacted last December has 2018 corporate second-quarter profits up nearly 25 percent over 2017 levels.
And that surge comes above and beyond three decades of already rising corporate profits. Between 1984 and 2014, calculates London School of Business analyst Simcha Barkai, the share of the nation's output going to corporate profit more than tripled. In 2014, that increase shoved $1.35 trillion extra into the pockets of shareholders and business owners, the equivalent of $17,000 for every worker in America's corporate sector.
All these numbers, some might say, signal that our economic and political system isn't working. But the system is working -- for the rich. From a plutocracy, we shouldn't expect anything else.
Still, we can end here on a cheery note. Americans a century ago faced a plutocracy just like ours today. They beat their plutocracy back. We can do the same.