A Few Additional Thoughts on the Gilded Age

Adam L. Silverman, PhD*

COL Lang's recent post on attempts by the GOP to return America to a new Gilded Age excellently picked apart what is being proposed and why.  I wanted to follow up with some additional information I have come across and took note of in case I had reason to use it.  The first is an excellent article in The Atlantic from last winter.  The article, by Chrystia Freeland, a business correspondent, delineates how the wealthiest of Americans have essentially detached themselves from the rest of us.  They have fully embraced the concept of globalization by recognizing that they and their capital can go anywhere, therefore they don't really need the US or the rest of us Americans.  In doing so they have broken the last bits of the economic portions of the American social contract.  Essentially all of the rest of us are just disposable.  This, as I've mentioned before in regards to military service, is at the heart of the book AWOL and Freeland's article makes a more general and economic complement to that argument.  And Timothy Noah (before Slate let him go...) did an outstanding multipart series on income inequality.

Another excellent piece, especially now that one of the major GOP candidates for the party's presidential nomination has said that corporations are people, is a lecture given by Harper'scontributing editor and law professor Scott Horton that was reprinted in (at least the online version) of Harper's.  Professor Horton's presentation takes a look at the corporation through the eyes of James Madison and presents a stark contrast to how many in America, and certainly the (conservative wing of the) Supreme Court based on recent rulings, view and should understand corporations. 

Finally, just a couple of links to some chart heavy sites dealing with how Americans are compensated for their work, facts about US inequality, debunking some major tax myths, historical top tax rates.  New gilded age indeed...

*Adam L. Silverman, PhD is the Culture and Foreign Language Advisor at the US Army War College.  The views expressed here are his own and do not necessarily reflect those of the US Army War College and/or the US Army.

 

Comments

[Fred]

Adam,

I notice the Brookings tax rate file you link too doesn't have Capital Gains taxes listed. That's a major portion of wealth growth now. Is there a reference in changes on stock dividend decline and the corresponding decline (thus wealth growth) of capital gains tax rates?

[walrus]

With respect, ....and this is news? I've been trumpeting this since 1990.

It is the culmination of a process first proposed, by my reckoning in a 1952 science fiction novel: "The Space Merchants" where corporations do rule the world and Senators are addressed for example as "The Senator for Dupont".

http://en.wikipedia.org/wiki/The_Space_Merchants

We are in the final stage of this process right now - the stripping of the mask and the emergence of the corporation as sovereign power. The most obvious symptom being the identification of corporate well being as a "National Security" issue that legitimises the deployment of State power - law enforcement and the military, in the service of corporate goals or to put it another way, the rapid blurring of the difference between corporate goals and national priorities within America itself. I mean this in a domestic sense, since our intelligence and diplomatic assets have been legitimately advancing corporate goals overseas for as long as I can remember.

By coincidence, we just saw a trivial example the other day - allegedly Apples "Detectives" usurped the powers of the State police:

"Dangerfield also told SF Weekly that "three or four" officers from SFPD had accompanied Apple employees to Calderón's home but had stood outside while Apple's detectives had searched the home. Dangerfield said he came across this information after contacting Apple and speaking to the captain of the Ingleside police station."

http://sanfrancisco.ibtimes.com/articles/208087/20110903/iphone-5-prototype-apple-employees-impersonating-police-search-no-says-sfpd.htm

This is all the more worrying when one considers that we are well advanced in the process of implementing a seamless law enforcement and intelligence sharing network from the Pentagon down to your local Sheriff to "fight terrorism" which has apparently seen local law enforcement obtaining access to military grade visual and communications intelligence and the military gain access to domestic intelligence, all via the so called "Fusion centres" invented by DHS.

When one also understands that the outsourcing agenda of the Pentagon must, by definition, be a Two way street giving corporations access to the inner policy workings of the military, the danger should be obvious.

To put that another way, we are fast approaching a situation where the police and military are always on the side of the corporation, no matter what. If you think this is not a problem, and that the rule of law must be upheld, etc. etc, please remember that corporations are amoral - they are NOT constrained by the need to maintain the social contract (the golden rule) that binds ordinary human beings together.

As for a transnational elite, I've seen this working first hand and been counseling young up and coming business professionals I know to get overseas business experience in America and Europe and build their personal international networks for years. There is nothing more powerful in working a deal than being able to confer with folk you know from around the globe.

[ex-PFC Chuck]

Re Fred's comment:
Paul Krugman put up a blog post a couple of months ago citing a an IRS report to the effect that in five years of the decade ending in 2009 (the latest year for which data was then available) the top 400 tax returns in terms of total income racked up at least 10% of all capital gains reported by all the 150 million (or whatever it is) taxpayers! In no year during that decade was the top 400's take less than 7%. No doubt we are living through Gilded Age 2.0.

Apologies for no link; I'm not an NYT subscriber.

[Anna-Marina]

This is another excellent article by Scott Horton on giving CIA (in contravention of the law) the “responsibilities that were formerly the preserve of the uniformed military”
http://www.harpers.org/archive/2011/09/hbc-90008226

[Roy G.]

Well said, Walrus. I would add the Supreme Court and DOJ to complete your list of corporate enablers.

[highlander]

Walrus,

I was going to chime in, but you have pretty much said it all, quite nicely. Will the American people have the cojones or insight to stop the slide into the abyss? Doubtful.

The Klingons, must be absolutely giddy, with anticipation.

[Patrick Lang]

highlander

you must live pretty close to the scenery in "Carolina..." pl

[Allen Thomson]

Back in the mid-1990s, one of my friends from a TLA went on a rotation to a major US company to learn how the private sector worked. The principal thing he learned was that the "US" bit wasn't really applicable when it came to high-level decision-making. It was a global company that happened to have headquarters in the US, but it looked after itself first and foremost.

[highlander]

you must live pretty close to the scenery in "Carolina..." pl

What exactly do you refer to, Mon Colonel?

[Fred]

Walrus,

you left out facial recognition software + Facebook + Google. Makes it rather easy to find those 'troublesome' protesters.

How about the complete media silence in the US about the Murdoch scandal?
http://www.nakedcapitalism.com/2011/08/why-is-the-us-media-going-easy-on-the-rapidly-widening-murdoch-scandal.html

[Patrick Lang]

highlander

I mean the county in the story, "Carolina in the Mornin'" No? pl

[highlander]

Yea, I just read it, glad you had the furries land over the hill from me.

You have potential as a sci fi guy.

But, I am more concerned about the human Klingons at this point.

[Patrick Lang]

highlander

Maybe something like "The Undefeated" or "Two Flags West" on another planet? pl

[Redhand]

Also not to be missed this weekend is "Goodbye to All That: Reflections of a GOP Operative Who Left the Cult" by: Mike Lofgrenat at Truthout. See http://www.truth-out.org/goodbye-all-reflections-gop-operative-who-left-cult/1314907779

It pretty much summarizes everything I believe about the degeneracy of our political and social culture, and the mortal threat that the GOP, joined-at-the-hip with corporate interests, poses to ordinary Americans.

The tragedy is compounded by how utterly WORTHLESS the Democrats are, part co-enablers, part feckless fools.

On the cusp of turning 62, I remember a very different America as a boy in the early 60s, and hell, even in the late 60s and 70s when it looked like the DFH's might actually check the growth of corporate power in a post interest-group-pluralism era.

Now, I don't think we have much of a "democracy" left. If the GOP takes power in 2012, you can kiss the remnants of it goodbye.

[fred]

I second highlander, a good read and another future if desired.

[J]

walrus,

Don't forget that the transnational elite know a little secret, you own the food supplies you control the people (and make a handsome profit to boot). One example is the way some of the elites are trading in their gold supplies and buying up farmland which reaps them an annual 16% gain in their investment.

[highlander]

Colonel,

Any particular reason, you chose to feature, Legio II Augustan on the Carolina in the morning posting?

[Patrick Lang]

highlander

My favorite legion. It is emblematic of the eternal nature of soldiering as a profession. pl

[William R. Cumming]

WOW! Interesting post and thread. The term "piercing the corporate veil" probably is not too familiar a term to the non-lawyers but ultimately it refers to the fact that individuals run corporations. SCOTUS in its rulings refuses to allow that hoary common law tradition to thrive even as embezzlement, self-dealing, and constructive and actual fraud rule many in the corporate world as their mantra. All 50 states authorize corporations. There is no federal corporate charter law. This is the fundamental flaw in the regulation of corporations in the USA and should become a necessary reform but for the fact that none in the thread or post recognize that few outside the top 5% of wealth have any political power other than the individual vote that is minimized in its power by gerrymandering and other approaches that favor incumbency. We have seen the enemy and it is US!

[J]

Talk about two morons IMO who don't belong anywhere near a microphone and a camera

http://www.rawstory.com/rawreplay/2011/09/fox-guest-for-economy-to-recover-get-rid-of-minimum-wage/
and
http://www.rawstory.com/rs/2011/09/02/right-wing-commentator-poor-people-voting-is-un-american/

It's peckerwoods like Mr. Smith and Mr. Vadum that really get my goat. Both need to be required to take a class in humanity and what it is to be human. Both appear to have never had a day in their lives where they went hungry, without shelter. Both are callous and uncaring towards those they appear to perceive as 'beneath them'. Both are college-educated idiots, and remind me of some when I was in college who could not pump gas if their lives depended on it, they were soooo common-sense 'challenged'. One has a Masters in Business, the other one has a Masters in Journalism. WuuuHoooo. Too bad they can't get a degree in Common-Sense and Humanity.

These two nit-wits IMO need to be plucked from their velvet lined lives for 1 year and required to live like those whom they deride with their inhuman viewpoints. Maybe then, hopefully anyways they might find their humanity along the way.

These 'gilded age' attacks today are nothing more than a mask for Fascism.

[MikeS]

Marx foresaw correctly that the unrestrained greed of capitalists could lead to their own destruction, and quite possibly the destruction of the society whose functioning is necessary for profits. At the minimum, a vast disparity between the top ("capitalists") and the bottom ("workers")can lead to very serious social unrest, as we have seen time and again.

These points are noted by UBS economist who recently wrote a provocative piece for Bloomberg News:"Give Karl Marx a Chance to Save the World Economy."

It's here:
http://www.bloomberg.com/news/2011-08-29/give-marx-a-chance-to-save-the-world-economy-commentary-by-george-magnus.html

[Anna-Marina]

Allen Thompson
You are right that corporate goals and national priorities do not coincide and actually contradict each other.
The mighty (and very expensive) military machine working for the benefits of few global companies is not a decent a sight. The US is devouring itself from within by the banking-military complex.

[Norbert M Salamon]

There are some points worth noting about the super rich:

1., A large fortune can be made by being "lucky" at the casino a.k.a FOREX [Soros and company] while they are wrecking the livelyhood of nations [Asian, South American PIGS, etc economies] - notable that the daily turnover in FRORX is larger than the GDP of most countries\]

2., The benefit of so called intellectual property [e.g. Google's last takeover 18 patents are worth 9 billion dollars] Novelist can net over a billion dollars for fairy tales].

3., Monoploy practices allowed and suppported by the CORRUPT political/judiciary cohort: e.g. Microsoft, top 5 banks, Cargill and cohort in agricultural products etc.

4., Private Equty Funds, which buy, bankrupt, then sell companies - while ripping all real value out of them for private gain.
The list is almost endless in the Anglo-Saxon business proactices [Mostly USA, UK,. Canada and some others]

Notable that non of the above really contribute to the REAL ECONMY, they only MONTIZE legal avenues for personal gain, at public expense.

[William R. Cumming]

Actually I don't believe in a "loyal opposition"! What I do believe in is that real choices are given the voters. Thus, both parties should be competently led and have policies that are driven by education, experience, and competence.

Right now the 2012 election is setting up as no real choice given voters so that most will sit out even voting. A position I disparage for either civilians or the military since at least vote against the worst candidates even if none much better you end up voting for. But right now on Labor Day 2011, six (6)days before the 10th anniversary of 9/11/01 I believe that if correct the Republicans will win both the Presidential race in 2012 and the Senate. In reality only the HOUSE may end up in play if anti-incumbency plays out but given the margins needed to shift control from Republicans to DEMS that is highly unlikely. And of course believe Charlie Cook and his COOK REPORTER is the best of the best on the technicalities of the election cycles. But as always could be wrong. Hoping I am wrong.

[highlander]

There are some points worth noting about the super rich....Salamon

Salamon,

There is nothing wrong in of itself, when someone becomes super rich. But when you impact the rest of society, in a significantly negative way by doing so.

Well then, you join a cohort of the Klingons.

Not that the super rich, really give a pile of camel dung,about what we think.

We need one of the Roosevelt Boys or an Andy Jackson fairly quickly. Unfortunately, I don't think we manufacture those models here, anymore.