Who Rules America Revisited

[Hannah Bell]

Who rules America? Sociologists and political scientists have debated this question since C. Wright Mills published his 1956 book The Power Elite. Writing in the 1950s, Mills argued that the United States was ruled by a triangle of power between the federal government, large corporations, and the military industrial complex (with many people moving between these sectors)...

Since the late 1960s, sociologist G. William Domhoff has...increased the sophistication of power elite theory. If we look at the composition of cabinet-level and other White House appoints since the Reagan administration, it is clear that there is a significant movement between Wall Street and the Federal Reserve Bank and Treasury Department. But why? The answers are found in the social and economic crises of the 1960s and 1970s.

The rate of profit in the non-financial sector fell after peaking in 1966 and continued its fall into the mid 1970s. At the same time, the Civil Rights, anti-war...and other rebellions against the establishment were taking place... Lewis F. Powell...wrote a memo to the Chamber of Commerce in 1971 and opened the document by stating, “No thoughtful person can question that the American economic system is under broad attack...” The great fear was that mainstream liberals were becoming more radical...

In response capitalists mobilized politically and ideologically. By 1976, the U.S. Chamber of Commerce's membership started increasing rapidly and doubled by 1980. In 1975, there were just under 200 Corporate Political Action Committees (PACs) but about 1400 by 1981...Beginning in October 1979, one of the first applications of the “shock doctrine” came in the form of very high interest rates...

In a widely ignored 2000 book, Wall Street Capitalism: A Theory of the Bondholding Class, economist E. Ray Canterbery explains what happened. The tax cuts drastically increased the incomes of the rich and they used their newfound money from the tax cuts to buy the Treasury bonds, notes, and bills that the Treasury Department had to issue in order to finance Reagan's deficits...

Instead of using taxes to fund the federal government (and increasingly state and municipal governments), taxes on the rich were cut and they were handed an “investment opportunity” so that working and middle-class taxpayers now pay a “bondholder's tax” to firms like Goldman Sachs and JP Morgan Chase (as well as Japan and China)...

http://www.counterpunch.org/volscho12102010.html

[fasttense]

1. If you still think America is a democracy, you need to read this. n/t

[malaise]

2. Must read

K & R

[geckosfeet]

3. More excerpts - Socialism for the rich - 'The Largest Welfare Check Ever Written'

The Largest Welfare Check Ever Written - The Rise of the Wall Street Ruling Class

On edit: This is the last paragraph of the piece. It is thought provoking and somewhat confrontational in tone but I think it is an accurate representation.

The last thirty years of the class war waged by the Wall Street Ruling Class and the Federal Reserve Bank has been about reducing wages and goods inflation while sustaining financial asset inflation to increase the enrichment of the bond and stock holders. Net interest payments on Treasury securities are welfare payments to the Wall Street Ruling Class. One of the propaganda functions of the highly concentrated (by ownership) mass media is to keep the masses confused about this great source of power. From the perspective of the elite, it is better to inflame and encourage hatred for Mexican immigrants, welfare recipients, and Muslims. But Mexican immigrants and Muslims, generally speaking do not run the country. Instead, the simple answer is: follow the money. By following the money you will be led to a street with a river at one end and a graveyard at the other. In fact, it is for whom the firms located on this street received the largest welfare check ever written. As the chorus of Ron Paul supporters, Tea Party activists and white supremacists continues rising and violence escalates, the question arises: Is there socialism in the United States? The answer is a resounding Yes! Socialism for the rich.

The Largest Welfare Check Ever Written - The Rise of the Wall Street Ruling Class

These days, and for the bulk of the buSh years, but especially as a result of tarp and the bailouts, our investment industry has been given free money (essentially free - very low to 0% interest loans) by the federal reserve bank. They buy bonds and then sell them on the secondary markets. This process is alarmingly similar to the mortgage backed securities scam. The Federal government (read that as the US taxpayer) will be left holding the very large bag.

This Federal government can't quit issuing bonds because tax rates are so low. There is simply no other source of funding. As it is slowly strangled the Federal government's regulatory effectiveness will dwindle even further. Banks and corporations will exert greater control and suck the remaining wealth from the US. When we are bankrupt they will by necessity spread to the international markets.

The government will eventually be fully owned and funded by the ruling wealthy class. I really do not see how this can play out any other way if the fed continues on it's present course.

[mmonk]

4. Yep. Recommended.

The culmination of that effort to concentrate the wealth of the nation that began in real earnest terms in the 70's is now upon us.

[snappyturtle]

5. Thank you....this is a great expanation. Bookmarking. nt

[annabanana]

6. Kicking back up to the top of the page . . for the curious. . .n/t