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4 Signs America Isn’t A Democracy

Economy
4 Signs America Isn’t A Democracy

It’s not every day a political science study sparks the latest Twitter storm.

An April 2014 report by Martin Gilens of Princeton University and Benjamin Page of Northwestern University finds America’s apparently democratic system is currently ‘seriously threatened’. Why is this any more significant than the usual indictment by left-leaning pundits? Because Page and Gilens have ostensibly proven it, in a simple analysis that charts policy outcomes between 1981 to 2002 against the policy desires of poor, middle-class and rich Americans. You can probably guess what they found.

According to the trends, the desires of the very richest (90th percentile, $146,000/year and up) have about a 45% chance of becoming policy. That might seem like a healthy or fair figure until you flip the coin: Policies the very richest oppose have an 82% chance of failing, regardless of majority citizen support.

This study comes at a pertinent time when all other evidence seems to suggest more and more doors are being shut on Americans outside the 1% club. A Gallup poll the same month finds with paltry savings becoming endemic, a growing portion of the middle-class households are just a layoff away from enduring poverty and a record number now work on the verge of financial hardship. Meanwhile, even in the midst of economic crisis, the wealth of the wealthiest is growing without fail, along with, the study finds, their ability to hamstring policy.

Gilens and Page never explicitly say that America is – or is becoming – a type of plutocracy (i.e. rule by the rich) even though their findings imply unambiguously that government policy is controlled by the tiniest group with the biggest accounts. Indeed, the media has largely elected to depict the findings of the study as indicating that America is becoming an oligarchy – a society dominated by the smallest group of privileged citizens, and usually the richest citizens. How accurate is this depiction? Is the U.S. truly at risk, as Gilens’ and Page’s report suggests, of losing the cornerstones of democracy entirely? These four realities of American politics today seem to offer strong support for the theory:

4. Election Contributions: The Floodgates are Open

Barack Obama

“Money is speech” seems to be central to the U.S. Supreme Court’s understanding of the First Amendment and constitutionally keeps money flowing into political campaigns. Under this interpretation, two recent landmark rulings that equate election contributions to free speech have curbed legislative efforts to limit money’s influence in politics:

–         April 2nd, 2014: The U.S. Supreme Court removed limits on individual donors’ contributions to political campaigns in a narrow 5-4 decision. While this didn’t affect limits on single candidates, it broke the ceiling on the aggregate amount any one person can spend on runners, political parties and political action committees. As of last month, Americans can officially grease as many candidates as their budget allows.

–          January 21, 2010: The landmark Citizens United case removed similar aggregate limits on corporate political donations. The following 2012 election, naturally, broke spending records.

In the wake of last month’s ruling, dissenting Justice Stephen G. Breyer summarized the development quite poignantly: “If Citizens United opened a door [for money’s sway on politics], today’s decisions we fear will open a floodgate.”

3. Lobbyers Gone Wild: the Dodd-Frank Bill

sitetrail.com

sitetrail.com

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act remains the federal government’s big fix to the shoddy regulatory structure that underlined the financial crisis. Naturally, the Bill’s been criticized both left and right for being too kind or too hostile to Wall Street, even while everyone knows Wall Street helped write it with over $1 billion in lobbying. Here’s a breakdown of just some of the lobbying figures around the bill:

Business Associations: $199,738,789 (an all-time high)

Commercial Banks: $54,912,363

Securities and Investment sector: $105,699,730 (an all-time high)

What did these lobbying efforts buy? Lukewarm limits on banks’ risky investments with government-backed funds, and a loophole for banks to keep trading in derivatives, among other things. What’s likely worse — these “minor” patches taken in aggregate feel more like a token slap on the wrist that assures Wall Street investors they are, in fact, too big to fail.

2. Revolving doors: Government is the 1%

discovery.com

discovery.com

Last March, The Hill reported over two dozen federal officials who helped turn Dodd-Frank into Dodd-Frank-Wall Street are — surprise — now working on Wall Street.

As it turns out, many of these new hires hail from the Commodity Futures Trading Commission (CFTC)—the lead writers of Dodd-Frank’s rules on derivatives trading—and occupy law departments where they now counsel their colleagues on how to “comply” with the twists and turns of their new regulatory bootstraps.

The revolving door between the heights of private and public sector in America is old news, but is it cynical to think it spins a little faster these days? In 2013 The Wall Street Journal reported U.S. Secretary of the Treasury Jack Lew’s former employment contract with Citigroup included a rather specific clause that guaranteed him a big bonus “should he ever” decide to leave his post at the banking giant for a job in federal government. This came just years after he voluntarily arrived on a $685,000 severance payment from New York University; they didn’t just show Lew the door, they pushed him through.

Also last year, The Project on Government Oversight documented the kinds of exit bonuses offered to high level private sector employees exclusively for taking a job in government: Goldman Sachs offers “lump sum cash payments”, JPMorgan Chase offers stock awards, Morgan Stanley — to paraphrase — gives a bonus that’s normally otherwise offered to keep you hired, Fannie Mae offers “qualification for a financial benefit” and Blackstone Group guarantees government aspirants will have effectively “not left the firm”. These powerful corporations are eager to see their top employees jump ship to government positions.

1. Wealth gap 2.0: The policy gap

Economic Policy Institute

via Economic Policy Institute

Progressive taxation, in theory, remains one of the most provocative solutions to ameliorating wealth inequalities and diffusing the political resources of the American upper class. Yet analysts across the board have warned that not only is the ability to push such reforms through nearly impossible in today’s landscape, but future prospects are actually getting worse. In the context of Page and Gilens’ study, growing wealth centralization — part and parcel to the centralization of policy influence — is effectively tightening its grip on any political action undesirable to the wealthiest 10% who take home more than half the country’s income; every new statistic revealed about wealth concentration is a statistic on the middle class losing political influence.

We’ll leave you with some of the most recent numbers that pit both trends side-by-side:

–          In the 2012 election, $1.68 billion—28 percent of all disclosed donations—were provided by 31,385 people: 1% of the 1%. Every single member of the House or Senate who won an election in 2012 received money from them.

–          85% of House members elected in 2012 received more donations from this group than every other donor combined.

–          As of 2014, for the first time in American history, over half of the members of Congress are worth at least $1 million.

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