Democracy or Oligarchy?

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Democracy or Oligarchy?

Postby KeithE » Fri Aug 22, 2014 6:26 am

The Disease of American Democracy by Robert Reich.

The conclusion of the underlying Study of 1776 policy issues in 1981-2002 by Princeton’s Milens Gilens and Northwestern’s Benjamin Page:
The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.


Robert Reich adds:
lawmakers respond to the policy demands of wealthy individuals and monied business interests – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

Before you’re tempted to say “duh,” wait a moment. Gilens’ and Page’s data come from the period 1981 to 2002. This was before the Supreme Court opened the floodgates to big money in “Citizens United,” prior to SuperPACs, and before the Wall Street bailout.

So it’s likely to be even worse now.
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Re: Democracy or Oligarchy?

Postby Haruo » Fri Aug 22, 2014 11:56 am

1779, not 1776. Thanks, Keith.
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Re: Democracy or Oligarchy?

Postby Sandy » Fri Aug 22, 2014 1:22 pm

What's developed in American government with the influence of wealth should make anyone who claims to be a strict constructionist with regard to constitutional interpretation shudder. The fact that many of those who make that claim are just fine with the ability of wealth to purchase government favor is proof of the ability that wealth has to buy influence.

Every administration has had its money trail. Clinton's is tough to figure, but it is clear that the military-industrial complex bought and paid for Ronald Reagan, and the first George Bush. Military contractors also had the second Bush administration by the proverbial 'nads as well, though it was the oil industry that set records for fabulous accumulations of profit, much of it at government expense, during his term. So who owns the government under Obama? I'm sure someone does. Follow the money trail. Although with the way this particular congress has stonewalled, I would say they've been bought to do what they're doing.
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Re: Democracy or Oligarchy?

Postby KeithE » Fri Aug 22, 2014 3:25 pm

Haruo wrote:1779, not 1776. Thanks, Keith.

Very good, you read it. I guess I got carried away with “1776” and the Declaration.
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Re: Democracy or Oligarchy? - the short answer

Postby ET » Tue Sep 02, 2014 10:45 pm

Our friend Keith may be off on his post-employment adventures, but I'll jump in on this a little late......

For those that don't care for lengthy rebuttals, I'm going to grant your wish...my first post with a short response and then you can skip over my expanded follow-up. Neil, I'm thinking of you, buddy. :)

While addressing a different subject, George Will wrote something very relevant to this discussion in his column The Redistributionist Behemoth:
Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.

Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.

The party of Jefferson ignored his advice, such as:
"[T]he States can best govern our home concerns and the general government our foreign ones. I wish, therefore...never to see all offices transferred to Washington, where, further withdrawn from the eyes of the people, they may more secretly be bought and sold at market."

Now, after folks such as Robert Reich - the very ones who would champion that powers and decisions be transferred to Washington and withdrawn further from the eyes of the people and are, as Jefferson feared, now secretly bought and sold at market, they want to blame something other than their philosophy that largely created it in the first place.

Government spreads out a big, humongous picnic of favors and dollars spread in the park and then folks like Reich show up and complain about the ants. What did he expect? The ants wouldn't show up? :roll: This guy is supposed to be smart?
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Re: Democracy or Oligarchy? - the long answer

Postby ET » Tue Sep 02, 2014 10:53 pm

One of Bruce G's most often used quotes from Adam Smith on the board relates to the notion that when businessmen from the same trade get together, it usually doesn't end well for the public. Likewise, Milton Friedman stated:
"When you have more government, industrialists take it over, and the two together form a coalition against the ordinary worker and the ordinary consumer."

Sandy wants to pile on and states:
What's developed in American government with the influence of wealth should make anyone who claims to be a strict constructionist with regard to constitutional interpretation shudder.

While Smith was writing in a world of mercantilism, his idea and the modern-day equivalent by Milton Freidman is alive and well among we "strict constructionists" and our free-market, limited-government philosophy. Contrary to Bruce seeing Smith's statement as evidence for a claim that more government is necessary, it is anything but that. Both Smith and Friedman acknowledge that business interests can collaborate against the ordinary citizen, but it does not follow that that this warning is a call for more government and more regulation.

Contrary to what Sandy asserts, there's very good reason for what we "strict constructionists" favor in relation to this matter. We realize that much of the problem could be eliminated by following a strict boundary on the powers of government to manipulate the choices of the American citizen, such as through the tax code or regulatory schemes (such as the EPA, FDA, DoE, etc.). That does not mean no regulation whatsoever, but if government does not possess broad, almost limitless power - the notion of a "living Constitution" essentially implies limitless power -- to grant favors and protect one company at the expense of another and does not have a big slush fund from which to bestow government largess, then there's far less motivation and reason for the wealthy and corporations to hire lobbyists to obtain that benefit in money or favorable regulatory schemes.

It was some 100 years ago that, in order to accomplish their vision for society, "progressives" ( an almost self-congratulatory name as it implies anything done is automatically better than what previously existed) started to work on accumulating power to themselves and their beloved central government. Now, when that power is redirected, in their view, to benefit those whom they do not like or of whom they do not approve, there are cries of the "death of democracy". However, it was progressives that decided more and more decisions should be made by the elite, the anointed, the Ivy-leaguer types. We regular people couldn't be trusted. We are too stupid, as is exemplified when such people write columns about voters not "voting in their own best interest" when they reject the policies of progressives.

It's far easier to try to keep a watch on a small government with few favors to grant than it is to try to implement "ACCOUNTABILITY" for a leviathan with hundreds or thousands of favors to grant and myriads of bureaucrats to grant them.

For instance, look at the United States tax code. It is an insanely complex, ridiculous system of raising revenue. Besides generating HUGE costs to those companies that have to hire lawyers and accountants to comply with it and then pass those costs onto us in the price of their products, it is used far more as a mechanism for social engineering, granting favors to those that behave in a government-approved manner and punishing those that do not. Enormous sums are at stake - and entire professions - to maintain that complexity. As we learn of late, it can even be used to punish those of a different political opinion. Imposing a flat tax or even a progressive income tax with few deductions eliminates the need for lobbyists, lawyers, accountants -- at least in the taxing realm.

Then there are the various administrations and agencies that write regulator rules or provide all sorts of subsidies to business with our money to protect companies or associations from competition, lessen their exposure to risk or keep them from suffering the consequences of their own bureaucratic stupidity (General Motors, this means you):

It's everywhere: catfish, Export-Import Bank, Boeing, GE, Caterpillar, John Deere, GM, sugar producers (and another), farmers, corn growers/ethanol producers, Christmas trees, Enron, the Ritz and even Papa John's Pizza, sports stadiums, movie productions, Auto dealers trying to ban Tesla from Georgia (as they have in at least 5 other states), and even one of the most "holiest" of tax deductions: the mortage interest deduction (benefiting the well-to-do far more than Joe Average).

You can be attacked by those with money and more connections trying to get government to pass regulations (for the "safety" of the public, of course!!) to protect themselves from the threat you pose to their bottom line whether you run a food truck, sell caskets, want to start a taxi service, operate a cosmotology shop, braid hair, arrange flowers in Louisiana, work as an interior designer, not be able to accept help form other nations after an oil spill because of a 1920 law (Jones Act) designed to "protect jobs" in the shipping industry, try something new in on old occupation, such as Uber and Lyft with their spin on transportation services.

One can often translate "safety of the public" to "protect my business from competition".

Some 250 years ago a bunch of guys got together and figured out that large central governments (and even government in general) had an inherent tendency to drift toward abuses of power, favoring of the wealthy/powerful and to become tone-deaf to the general citizenry. Thus they viewed government not as "good", but a "necessary evil". Thus, they sought to put constraints on it and attempted to keep as much power as possible close to the people. The specifically wrote that powers not specified as being given to the central government by the document they drew up were to be retained by the citizens and the states. Then a hundred or so years ago, a bunch of know-it-alls (relative to the unwashed masses) decided that the solutions to the social ills of the day lay not in allowing the citizens to manage their lives, but in having it ordered and provided for by those with the "knowledge" to manage government for the betterment of mankind. Thus we have "progressives".

However, I imagine the "progressive" solution to the problems created by their power accumulation won't be the logical one of returning more decisions of our lives to local or state control or restricting the ability of government to hand out favors, but to attempt to limit the freedoms of the "wrong" people where necessary in order to ensure that only the "right" people or projects obtain favor.

NOTE (9/8/14): added Tesla to the list of companies attacked by other corporations seeking to protect themselves from competition
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Re: Democracy or Oligarchy?

Postby Neil Heath » Wed Sep 03, 2014 3:17 pm

Thanks for thinking of me so kindly, ET. :)
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Re: Democracy or Oligarchy?

Postby Bruce Gourley » Wed Sep 03, 2014 8:52 pm

ET, I'm gonna keep this short too, as I've mentioned this before:

Adam Smith very much supported government regulation of business and banks (he wrote over 100 pages on the regulation of banks alone), in order to prevent commercial/banking interests from making too much profit. Yes, he believed too high of profits destroyed nations. Capitalism, according to the father of capitalism, free markets and modern economy, is designed to benefit all citizens by ensuring that inequality is curbed in the form of higher taxes on the rich, regulations on commerce/banking, living wages for workers, and government funded public education, among other measures.

In short, today's Republican Party has rejected Adam Smith (and capitalism) for an affair with atheist plutocrat Ayn Rand.
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Re: Democracy or Oligarchy?

Postby ET » Mon Sep 08, 2014 1:08 pm

Bruce Gourley wrote:ET, I'm gonna keep this short too, as I've mentioned this before:

Adam Smith very much supported government regulation of business and banks (he wrote over 100 pages on the regulation of banks alone), in order to prevent commercial/banking interests from making too much profit. Yes, he believed too high of profits destroyed nations. Capitalism, according to the father of capitalism, free markets and modern economy, is designed to benefit all citizens by ensuring that inequality is curbed in the form of higher taxes on the rich, regulations on commerce/banking, living wages for workers, and government funded public education, among other measures.

Yes, you've mentioned this before (not that I think all your claims are valid), but little in what you claim has anything to do with this current discussion. My premise is that as government grows and its powers expand beyond a limited role, a system is created whereby those with money and access can use that system to benefit themselves at the expense of the rest of the citizenry. While you most likely don't have the time, I would like the other folks to reference any the twenty or so examples I listed and consider the regulations involved and how they oppress the "little guy" at the expense of those with more political clout and money by restricting competition in order to protect their profits.

I found this quote about Smith that summarizes my argument: "He persistently worried that if merchants and manufacturers pursued their self-interest by seeking government regulation and privilege, the invisible hand would not work its magic...". Validation of this concern is in the 20 linked stories in my previous post.

Bruce Gourley wrote:In short, today's Republican Party has rejected Adam Smith (and capitalism) for an affair with atheist plutocrat Ayn Rand.

Look at you, even throwing in a little comedy routine..... :lol: It really is funny. I only vaguely knew of Rand before maybe 5 or 6 years ago. What I know of her now is due, more than anything else, to left-leaning religious folks trying to take shots at the "religious right" by attempting to shame them for supporting Republicans because, according to them and you, those policies are supposedly based on an atheist philosophy. Only problem is, I can listen to YouTube videos of Milton Friedman or read someone like Frederic Bastiat (100 years before Rand), F.A. Hayek or Friedman and they make largely the same philosophical arguments devoid of Rand's Objectivism.

For those interested, this is a good blog post on Rand's philosophy, or rather it's shortcomings:
Ayn Rand Didn't Understand Capitalism. Or Altruism. Or Christianity. Or Reality., Acton Institute blog post. The concluding paragraph:
Fully considered, it becomes obvious that Rand’s views congeal into a fatally flawed philosophy. Even when stripped of its atheistic elements, Objectivism’s focus on radical individualism cuts it off from reality and causes it to wither under scrutiny. And as much as we might admire Rand’s deep-rooted hatred of collectivism, her philosophy is still just another utopian dream, a transvalued Marxism.

Ultimately, Rand’s egoism is irreconcilable with both Christianity and capitalism. In fact, since the system fails to have any true explanatory value, it’s difficult to find any reason to adopt Objectivism at all.
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Re: Democracy or Oligarchy?

Postby ET » Mon Sep 08, 2014 1:23 pm

I had to tack on this bit I found. A review of the film version of Atlas Shrugged includes this:
The villains of the piece are not so much any welfare class as much as corporatists who want to link their companies to government arrangements so as to assure profit without the need for strong performance.

Can you say, "GENERAL MOTORS"? Or, more broadly, most of the examples I included in an earlier post.

And another good one:
Rand’s atheism, materialism, and reduction of the human being’s value to economic productivity are all severely problematic for a variety of good reasons. But one might compare her political and economic thought to chemotherapy, which is basically a form of poison designed to achieve a positive outcome. You don’t want to take it if you can avoid it. You hope the circumstances in which you would use it don’t arise. However, in an age of statism, it is a message that may need to be heard. Not so much in the hopes that it will prevail as much as to see it arrest movement in a particular direction which will end badly if it continues.

"movement in a particular direction which will end badly if it continues".....or, in the words of Hayek, "the road to serfdom".
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Re: Democracy or Oligarchy?

Postby Bruce Gourley » Mon Sep 08, 2014 5:12 pm

ET Says: My premise is that as government grows and its powers expand beyond a limited role, a system is created whereby those with money and access can use that system to benefit themselves at the expense of the rest of the citizenry.

I would argue that government growing beyond control is the result of big business (private wealth) taking over government. Economic historians generally point to about 1970 as to when big business effectively gained control of government, meaning that big business attained the ability to steer and write legislation. Since that time, big business-controlled government has steered and written legislation to benefit the wealthy, and -- surprise! -- the government has steadily redistributed a greater share of tax dollars into the pockets of the wealthy, at the expense of the poor, middle class and small businesses.

Tax rates correspond to the conquering of the government by big business. As late as the early 1960s the top tax rate in America was 91% (the richest were taxed at this rate; America's economy rocked during this time), and now it is the 30s (and the economy has struggled ever since Reagan began massive redistribution of wealth from the poor and middle class to the rich). The reason America is suffering financially is quite simple: the richest are not paying their share of taxes, content instead to force the tax burden upon the poor and middle class, of whom many of the rich want to pay less and less in order to paid their own pockets even more (or, more realistically, to hide their greedy profits in off shore tax havens to avoid paying taxes).

As Adam Smith warned us long ago, such plutocracy is an enemy of capitalism, and destroys nations.
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Key review well timed

Postby Stephen Fox » Mon Sep 08, 2014 7:28 pm

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Re: Democracy or Oligarchy?

Postby ET » Fri Sep 19, 2014 12:15 am


So a bunch of liberal writers try to pin Rand's "godless philosophy" as the guiding force for modern Republican policy and I'm to accept this as the truth and evidence that I am out-of-touch with the philosophical underpinnings of today's Republicans? Will you be trying to sell me a bridge next? :roll:

I'll just laugh this off until you can produce a policy proposal and argue that it is based on Rand's philosophy, but not in sync with, let's say, 1970s or earlier conservatism or classical liberalism.

As for the tax issues, that's been hashed over a few times in recent memory and I have no desire to revisit it at this time. But it was Kennedy who proposed reducing the top rate to 91% to a lower 78%. Maybe that had something to why the '60s rocked. Or maybe it was all that glorious war spending in Vietnam.
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Re: Democracy or Oligarchy?

Postby Bruce Gourley » Fri Sep 19, 2014 12:24 am

ET wrote:

So a bunch of liberal writers try to pin Rand's "godless philosophy" as the guiding force for modern Republican policy and I'm to accept this as the truth and evidence that I am out-of-touch with the philosophical underpinnings of today's Republicans? Will you be trying to sell me a bridge next? :roll:

I'll just laugh this off until you can produce a policy proposal and argue that it is based on Rand's philosophy, but not in sync with, let's say, 1970s or earlier conservatism or classical liberalism.

As for the tax issues, that's been hashed over a few times in recent memory and I have no desire to revisit it at this time. But it was Kennedy who proposed reducing the top rate to 91% to a lower 78%. Maybe that had something to why the '60s rocked. Or maybe it was all that glorious war spending in Vietnam.


Not all liberal sources above, Ed. Not that that matters to you.

The 1950s and 91% top tax rate was the peak of America's economic growth and prosperity (black Americans largely excluded, unfortunately).
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Re: Democracy or Oligarchy?

Postby KeithE » Fri Sep 19, 2014 8:14 am

Good set of articles Bruce. Our economic policies should not be based on fiction.

As for tax rates, the Kennedy drop in top income tax rate was counterbalanced by increases in the capital gains tax rate. It took Reaganomics to drastically lower income and capital gains taxes to levels unprecedented since the lead up to the Great Depression.

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Re: Democracy or Oligarchy?

Postby ET » Fri Sep 19, 2014 5:23 pm

Bruce Gourley wrote:Not all liberal sources above, Ed. Not that that matters to you.

The 1950s and 91% top tax rate was the peak of America's economic growth and prosperity (black Americans largely excluded, unfortunately).

It only matters if you can produce a policy proposal, explain how it is based on Rand's philosophy and then make the case of how it differs from that based on conservatism or libertarianism. So Rand made any impression on some Republicans? Big dot deal. One does not have to buy into Objectivism to admire her passionate opposition to a centrally planned economy. I don't agree with Libertarians on everything, but that doesn't mean I can't respect their views or "admire" (as Reagan stated about Rand) some of the themes of their philosophy.

As for the 50s, well, when most of the rest of the developed world is lying in ruins and you've been untouched by the destruction, you've pretty much got things all to yourself. You don't have to compete with anybody. You can make it, charge whatever you want for it and don't have a care in the world (well, outside of nuclear war :lol: ). You may be the only source of it for people in other countries.

No so, anymore.

KeithE wrote:Good set of articles Bruce. Our economic policies should not be based on fiction.

Which policies? List them. Explain how they are based on objectivism and cannot be based on other thought.

Edited to add: About that 91% rate: The fantasy of a top 91% income tax rate: A liberal article of faith that confiscatory taxes fed the postwar boom turns out to be an Edsel of an economic idea.
In support of this claim, like-minded liberal pundits point out that in the 1950s, when America's economic might was at its zenith, the rich faced tax rates as high as 91%.

True enough, the top marginal income-tax rate in the 1950s was much higher than today's top rate of 35%—but the share of income paid by the wealthiest Americans has essentially remained flat since then.

In 1958, the top 3% of taxpayers earned 14.7% of all adjusted gross income and paid 29.2% of all federal income taxes. In 2010, the top 3% earned 27.2% of adjusted gross income and their share of all federal taxes rose proportionally, to 51%.

So, if Keith is as infatuated with "DATA" as he claims, then when talking about federal income taxes, the lower rates of today are more progressive than the "groovy" 91% rate Bruce swoons over. He should support the current setup, not the '50s era, low-yielding 91% rate.
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Re: Democracy or Oligarchy?

Postby KeithE » Sat Sep 20, 2014 8:13 am

ET wrote:
KeithE wrote:Good set of articles Bruce. Our economic policies should not be based on fiction.

Which policies? List them. Explain how they are based on objectivism and cannot be based on other thought.


Obviously meant to say NO policies ought to be based on a piece of fiction (having in mind Atlas Shrugged and other Rand novels but that goes for others as well [e,g Roy Spencers’ Fundanomics, John Steinbeck’s Grapes of Wrath, maybe you can think of others]).

Economic historical results (even more than economic theory) should drive today’s economical policies. Anyone can write fiction to push a point of view.

Sounds like the austerity, anti-welfare, and anti-workfare policies of Ron Johnson and Paul Ryan (probably others) have been influenced by Rand’s novels. This has been established by Bruce’s links.

Hmm, was Rand Paul named for Ayn Rand? Read Bruce’s 7th link and 4th point about the Pauls.
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