Jan 262011
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Article first published as Capitalism and Democracy, Out of Balance in America? on Technorati.

Accountants, plumbers, teachers . . . lawyers, barbers, technicians — people and societies have many needs and many professions to fill them. If your car’s broken, you take it to a mechanic. If it’s your body that’s ailing, you call a doctor. But what do you do when it’s the society itself that’s in need of emergency care?

America is hurting, and even those who love to wave the flag and speak of our greatness are hard pressed to argue otherwise. We have 15 million people out of work and long-term unemployment at a record high; 44 million Americans now live below the poverty line, with many millions unsure of the source for their next meal; real median household income has been in decline since the turn of the century, and those people now lucky enough to find a job often do so at a significant reduction in pay.

From coast to coast, American infrastructure is in decay, needing more than $3 trillion in repairs. Our healthcare costs continue to spiral out of control, with per-capita spending as a nation more than double the OECD (Organization for Economic Cooperation and Development) average — and in return we achieve inferior outcomes. The federal debt is presently over $14 trillion, about 94% of GDP, and the budgets of 46 states across the Union are in crisis, some approaching default.

Our education system is in disarray; we can’t seem to break our dependence on foreign oil and fossil fuels; we’re destroying our environment with pollution and activities like hydraulic fracturing; the foreclosure crisis is still wreaking havoc on the middle class; our manufacturing base has been decimated; private debt is at an all-time high; our trade balance is upside down — and worst of all — the American people seem more divided than at any time in modern history.

The fact of the matter is that if America were a car, it would be in desperate need of an overhaul; if it were a person, the transplant of multiple organs would be in order. Few and far between are any Americans who would argue that we’re not headed toward disaster, but fewer still are those who offer any real solutions. So, where do we turn for answers? Who do we call?

It is the responsibility of the government to “ensure domestic Tranquility” and “promote the general Welfare.” So, with the domestic climate being anything but tranquil, and the welfare in recent years far from general, it would seem sensible to look to government for leadership — after all, this is the reason for its existence. Our elected representatives are then the people we should call . . . but alas, that really hasn’t been working very well.

The problem is that far too many of those representatives have, in practice, changed employers. They no longer work for the American people. They’re now employed by our nation’s largest corporations. You see, elections are expensive. The 2010 edition ran up a tab exceeding $4 billion. And the sad truth is that the candidate who doesn’t have a sufficient war chest doesn’t get elected. So, unless they’re independently wealthy, candidates are forced to fill their chests with the donations of those willing and able to give. That all too often means taking money from those who the government is established to oversee.

Sadly, for the American people, the average citizen is but a pawn in this national game of influence purchasing. Even the capacity of organized labor, a favorite villain of the right, pales when compared to the might of Big Business to fund elections. In the 2010 campaign alone, business outspent labor by more than 15 times over — paying out nearly $1.3 billion to labor’s paltry $81 million. And make no mistake, those corporate donors don’t support candidates for altruistic reasons — they act only for profits, and they demand favors for their contributions.

Tragically (again, for the American people), many of the corporations controlling Congress actually have no national loyalties whatsoever. In fact, 83 of the 100 largest American corporations maintain foreign bank accounts and shelter their income in tax havens — many paying nothing in U.S. income tax. In fact, it’s so bad that General Electric, fourth on the Fortune 500, made profits of $10.3 billion in 2009, and Uncle Sam wound up owing them $1.1 billion. It’s estimated that companies using tax havens manage to evade more than $100 billion in U.S. taxes every year. The problem is actually so widespread that estimates conclude one-third of all global wealth is stashed in offshore accounts.

The realization that has thus far somehow escaped the American public is that we live today in a globalized economy, and the paradigm that “what’s good for General Motors is good for America” is a relic of times gone by. In all too many cases, what’s good for “American” corporations is actually a poison pill for the average American. And the loss of tax revenues stolen by multinational corporations that use American taxpayer funded infrastructure and services, from roads and utilities to police and fire protection, all without paying their fair share, is only the tip of the iceberg.

All one has to do to see the disconnect between corporate wealthfare and the wellbeing of the American people is to look at Wall Street’s recovery over the past two years and compare it to Main Street’s continued struggle. The Dow Jones, after dropping below 7,000 in March of 2009, was invigorated by the second TARP payout and climbed steadily to finish 2010 at 11,577 — a 77% rise. Bankers rejoiced and passed out record bonuses, $20.3 billion for 2009 and promises of even larger handouts for last year.

Meanwhile on Main Street, 2009 began with unemployment at 7.3% and climbed right along with the Dow to peak in October 2009 at just over 10%. Federal stimulus dollars helped to provide some relief, and 2010 ended with some improvement but still with the jobless rate at 9.4%, and the more reflective U6 rate, which includes the underemployed, stuck at nearly 17%. Yet, as bad as this sounds, the situation is worse still — much worse. The stark truth hidden beneath the published rates is that we now have the lowest labor force participation rate since April 1984 . . . long term unemployment is still rising and people are just not being counted anymore.

And what are those “American” corporations doing? Well, they are creating lots of jobs; it’s just that the majority of them are not in the U.S.. According to the Economic Policy Institute, “American” corporations created 2.4 million jobs in 2010, but nearly 60% of them, 1.4 million went to foreign nations.

Fueled by cheap foreign labor, free trade and government subsidies, the profits of American businesses are soaring. Posting their highest profits ever, $1.659 trillion in the third quarter of 2010, things are good for corporate America. There was a time when that would have translated into prosperity for the average American, but not so anymore. Today, American workers are in a race to the bottom. Their compensation is dropping while commodity prices are climbing. They struggle to provide the basic essentials for their families, while politicians and pundits are increasingly selling the tale of an unavoidable economic shift.

Americans are being sold a bad bill of goods that insists that they accept a new normal . . . one with high unemployment, low wages, weakened social safety nets, and in the final analysis — a lower standard of living. This is the path to continually increasing corporate profits in a globalized economy. Such profits require cheap labor, which means that unemployment will not stem until Americans are willing to work for third-world wages. This is the tyranny of the elite, and it’s a direct result of corporate control of the United States government.

Adam Smith’s invisible hand of the market is alive and well, and it’s painting a new America, one that’s increasingly focused on the wellbeing of We the Corporations instead of We the People. Fortunately, it doesn’t have to be this way, but it’s not going to change through the voluntary actions of a government that’s bought and paid for by those who benefit from exploiting the populace.

The bottom line is that Big Business and American politicians have developed a symbiotic relationship that’s poisonous to the people. Big Business thrives on low taxes, deregulation and cheap labor, and American politicians fund their elections on Big Business donations. The quid pro quo in Washington is operating with unprecedented precision, firing on all cylinders and serving well the needs of the economic elite.

The unavoidable truth is that American democracy has let down the American people —there is nobody to call when those charged with service have been corrupted and no longer seek the greater good. So, what do you do when there’s nobody to call? You do the best you can to tend to the matter yourself. In this case, that starts with asking a new question: what’s good for America?

Without doubt, the answer will most assuredly be in perfect harmony with what’s good for most Americans. And as was the design of the Founding Fathers — that will be a society consisting of a strong democracy intended to curb the excesses of its capitalism, not vice versa.

We need to get the money out of politics, and you can help.

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  9 Responses to “Capitalism and Democracy, Out of Balance in America?”

  1. I absolutely love your article. It is intelligent, has a heart and it tells the truth. Keep up the good work.

  2. Your blogs are like opening a window after you fried some bacon and onions. Please do not allow Huffington Post to deter you. Send an e mail and ask them why they blocked you.

  3. How do I share your views with my friends on Facebook?

    • I plan to add a Facebook follow-me when I upgrade my WordPress here, but I’ve yet to get to it. In the meantime, you can share links or look me up on Facebook. I’m at: http://www.facebook.com/thinksterdave. I also spend a fair amount of time on the Coffee Party’s “Tax Payers Take Action 2011” group.


  4. Thank you! This is an intelligent take on the problems. I have been trying to tell people this for years.

    I would love to share this article with thinking people.l

  5. Heard about your article through the Coffee Party newsletter. You have great insight. It sounds similar to my own thoughts in this article: http://www.thwink.org/sustain/articles/005/DuelingLoops_Paper.htm

    Keep up the good work!

  6. Jack,
    It’s interesting that we’ve both gone with the “Thinker” logo. I do believe that we’re presenting very relating concepts, though yours is considerably more analytical. I’m just trying to get people to open their eyes and see that we’re all being gamed.

    You keep up the good work too!

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