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Who Benefits From Our Government

Written by Ian Erlichman

The question is not so often asked: “Who benefits from the American political system?” In light of the GOP’s recent tax reform, the average American should prepare for the incoming storm. We need to know who receives the wealth in our country and in what socioeconomic class the advantages lie. The answer to that question, put simply, is the extremely rich.

In investigating the growing disparity between the average American worker and the wealthy elite, we will reference the lives of two archetypial American citizens: one named Joe Schmoe, with a median income of $57,617, and one dubbed Chad Trustchild, with exorbitant funds and power. We will examine how that power has come to lie in the laps of the incredibly rich, and what has changed since the progressive post-WWII era.

Let’s begin first with possibility, with dreams. In particular, The American Dream, with a capital “D.” It has been heralded by Americans, as the go-to explanation, to the shaky assertion that “the US of A is the best country on the planet dammit.” As we progress, we will see that assertion crumble further into a heaping pile of gilded rubble, comprised mostly of hot-air and Bill O’ Reilly’s neck sweat.

Social mobility in the United States could speak directly to this dream; with high mobility, you would inevitably get an increased number of successes. Sadly, this is not the case as social mobility has decreased since the 1970s. 40 years ago, a lucky occupant of the top 1 percent had a one in seven chance of originating from the bottom 80 percent of the income ladder.

Now, that same occupant would only have a one in ten chance. As for those staunch patriots that still retain their faith in an “egalitarian America,” consider this quote from renowned political scientists Hacker and Pierson, “there is more intergenerational mobility in Australia, Sweden, Norway, Finland, Germany, Spain, France, and Canada.”

It appears not only that success in America is becoming increasingly hard for Joe Schmoe, but that the Chad Trustchilds of the world are becoming more entrenched in their socioeconomic position. This is proven in the quote, “more than 70 percent of the highest-earning 1 percent of American households in 2004 were among the highest-earning 5 percent of households in 1994.”

Not only is Chad more likely to retain his wealth, but the gradual trend toward the consolidation and exponentiation of wealth can also be observed. The stats show that most of the rich people in the 95th percentile graduated to the 99th within the next decade. This ominous trend, the wealthy becoming wealthier started, in the ‘70s and continues today.

The amplification of the wealth by the rich is not a nuanced concept. However, as Hacker and Pierson show, all the action is contained within the 1 percent among the top 0.1 percent and 0.01 percent. The mildly rich are doing all right, but the filthy rich, within the 1 percent, are becoming much filthier. The statistics that show that the 1 percent have seen a 256 percent growth in income from 1974 to 2006, while the middle quartile only saw a 21 percent increase.

This may be shocking, but wait until you hear about the 0.1 and 0.01 percent. Hacker points out, “The top 0.1 percent (the richest one-in-a-thousand households) collectively rake in more than $1 trillion a year including capital gains.” The contemptuously large disparity between average earners and the extremely wealthy only grows as you look closer and closer at the upper margins of America’s elite.

Hacker and Pierson calculated that the top 0.01 percent of Americans multiplied their average income 6-fold, from 4 million in 1979 to 24.6 million in 2005 (Hacker 24). So, it is obvious who is winning, but can we, as voters, do anything about it?

The voter ostensibly sits at the foundation of our democratic system. The thought that every vote counts courses through the veins of every red-blooded American, and though it is a well-meaning sentiment, the truth couldn’t be more remote.

According to Gilens and Paige, in an empirical study of the efficacy of the American voter, the American system represents a “nearly total failure of ‘median voter.’” They continue to state, “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy,” when comparing general polls against actual legislative changes.

The icing on the cake for our monolithic oligarch, Chad, is their conclusion: “Furthermore, the preferences of economic elites… have far more independent impact upon policy change than the preferences of average citizens do.” Unfortunately, the system and ideals that we have learned about, and currently preach, are a mirage. A hallucination that dangerously allows for the further incubation of the plutocratic petri dish that is American society.

So, since the corporate giants, and lobbying juggernauts are getting what they want, who is fighting for us, the 99 percent? Historically, it had been labor unions, as shown by Gilens in the quote, “Interest groups do have substantial independent impacts on policy, and a few groups (particularly labor unions) represent average citizens’ views reasonably well.” Here, the adjectives “reasonably” and “well” are a gross overstatement as union participation has evaporated from 25 percent in the 1970’s to a paltry 7 percent today.

However, as stated by Hacker, the evisceration of labor unions was not an international phenomenon. “In the European Union, union density fell by less than a third between 1970 and 2003. In the United States, despite starting from much lower levels, it fell by nearly half.” The only interest groups, in the great war of pluralism, that bore a uniquely democratic interest, have now been lost.

As dreary as this evaluation is, it is reality. The American voter no longer has a tangible effect on policy. Joe Schmoe’s capacity to move up the economic ladder is shrinking, and Chad Trustchild’s lofty position is becoming more and more secure. Not only the 1 percent, but the wealthiest constituents among them are the de facto winners in America’s economy.

To ease the reader’s conscience, I will leave you with one more statistic. During 2001 to 2007 the United States experienced marked economic gains. However, during that same period the median, non-elderly household income actually fell. All this, with the added sting of a rising poverty rate, and you get an exemplary case study of America’s economics.

About the author

Ian Erlichman