Plutocracy without end: Why the 1 percent always defeats the middle class

SALON

Sunday, Mar 30, 2014 07:00 AM EDT

Plutocracy without end: Why the 1 percent always defeats the middle class

There are more of us than them. But income inequality keeps getting worse -- and there is sadly no end in sight

 
Thomas Frank

Topics: 1 percent, 99 percent, Occupy Wall Street, Marxism, Keynes, Keynesian Economics, Middle Class, Fox News, Glenn Beck, Tom Frank, Thomas Frank, Editor's Pick, Editor's Picks, Income inequality, Business News, News, Politics News

 

(Credit: janecat via iStock)

 

I’ve been writing about what we politely call “inequality” since the mid-1990s, but one day about ten years ago, when I was traveling the country lecturing about the toxic curlicues of right-wing culture, it dawned on me that maybe I had been getting the entire story wrong. All the economic developments that I spent my days bemoaning—the obscene enrichment of the CEO class, the assault on the regulatory state, the ruination of average people—were very possibly not what I thought they were. When I talked about these things, I assumed they were an outrage, an affront to the affluent nation I still believed we were; once the scales fell from our eyes and Americans figured out what was happening, I argued, we would yell “stop,” bring this age of folly to a close, and get back to middle-class prosperity as usual.

What hit me that day was the possibility that my happy, postwar middle-class world was the exception, and that the plutocracy we were gradually becoming was the norm. Maybe what was happening to us was a colossal reversion to a pre-Rooseveltian mean, and all the trappings of ordinary life that had seemed so solid and so permanent when I was young—the vast suburbs and the anchorman’s reassuring baritone and the nice appliances that filled the houses of the working class—were aberrations made possible by an unusual balance of political forces maintained only by the enormous political efforts of its beneficiaries.

Maybe the gravity of history pulled in the exact opposite direction of what I had always believed. If so, the question was not, “When will we get back to the right order of things,” but rather, “Would we ever stop falling?”

Today, of course, the situation has grown vastly worse. The subject of inequality is discussed everywhere; there are think tanks and academic conferences dedicated to it; it has become socially permissible for polite people to wonder about the obscene gorging of those at the top. Sooner or later the question that everyone asks, upon discovering just how much of what Americans produce goes to the imbeciles in the penthouses and executive suites, is this: How much further can this thing go? 

The One Percent have already broken every record for wealth-hogging set by their ancestors, going back to the dawn of record-keeping in 1913. But what if it all just keeps going? How much fatter can the fat cats get before they hit some kind of natural limit? Before the invisible thumb of history presses down on the other side of the scale and restores balance?

That we are very close to such a limit—that the contradictions inherent in the system will automatically be its undoing—is an idea much in the air of late. Not many still subscribe to Marx’s dialectical vision of history, in which inevitable worker immiseration would be followed, also inevitably, by a revolutionary explosion, but there are other inevitabilities that seem equally persuasive today. We hear much, for example, about how inequality contributed to the housing bubble and the financial crisis, how it has brought us an imbalanced economy that cannot survive.

It reminds me of the once-influential theory of inequality advanced by the economist Simon Kuznets, who thought that capitalist societies simply became more egalitarian as they matured—a theory that is carefully debunked by economist Thomas Piketty in his new book, “Capital in the Twenty-First Century.” It also reminds me of the theories of the economist Ravi Batra, who in 1987 predicted a “Great Depression of 1990” because (among other things) inequality would have by then had reached what he believed to be unsustainable levels.

It is an attractive fantasy, this faith that some kind of built-in restraint will stop all this from going too far. Unfortunately, what it reminds me of the most are the similar mechanisms that Democrats like to dream about on those occasions when the Republican Party has won another election. As the triumphant wingers stand athwart the unconscious bodies of their opponents, beating their chests and bellowing for some new and awesomely destructive tax cut, a liberal’s heart turns longingly to such chimera as pendulum theory, or thirty-year-cycle theory, or the theory of the inevitable triumph of the center. Some great force will fix those guys, we mumble. One of these days, they’ll get their comeuppance.
But the cosmic cavalry never shows up. No deus ex machina will arrive to rescue the middle-class society, either. The economic system is always in some sort of crisis or another; somehow it always manages to survive.

One of the ways it manages to survive, in fact, is by working the public into paroxysms of fear at those who proclaim the inevitable destruction of the system. I refer here not only to the Republicans’ routine deploring of “class war,” by which they mean any criticism of plutocracy, but also to the once-influential right-wing radio host Glenn Beck, who in 2009 and 2010 was just about the only one in America who thought to take seriously the obscure French anarchist tract, “The Coming Insurrection.” Night after night in those dark days, Beck would use the book to terrify his vast audience of seniors and goldbugs—anarchy was right around the corner!—and to this day you can still find the tract on the reading lists of 9/12 clubs across the country.

Let us not forget that it was thanks to the energetic activity of those 9/12 clubs and the closely aligned Tea Party that the obvious and conventional — and maybe even inevitable — response to the 2008 catastrophe was not the response the public chose. According to an important recent paper by the sociologists Clem Brooks and Jeff Manza, the orthodox poli-sci theory of economic downturn holds that voters “turn away from unregulated markets and demand more government in times of economic downturn and rising unemployment.” But in the downturn of the last few years, people reacted differently: “Rather than the recession stimulating new public demands for governent, Americans gravitated toward lower support for government responsibility for social and economic problems.” And they swept in the Republican Congress of 2010, a result that, according to Brooks and Manza, has much to do with the hyperbolic conservatism of partisan organizations like Fox News.

A second irony, worth noting in passing, is that the right-wing offensive against public pensions, which began as soon as the Republican wave landed, has been carried on under the banner of historical determinism, with everyone agreeing that the rich are going to get their way with the unions and that no alternative exists. (“Detroit pension cuts were inevitable, city consultant testifies,” screams a typical headline on the subject.)

*

None of this is to deny, of course, that concentrated wealth will have certain predictable social effects, in addition to the brutal primary effect of screwing you and yours permanently. Inequality will most definitely bring further corruption of our political system, which will in turn lead to further deregulation and bailouts, which will eventually allow epidemics of fraud and failure. It will definitely bring an aggravated business cycle, with crazy booms and awful busts. We know these things will happen because this is what has happened in our own time. But that doesn’t mean the situation will somehow cease to function as a matter of course, or that leading capitalists will be converted to Keynesianism en masse and start insisting on better oversight of Wall Street.

The ugly fact that we must face is that this thing can go much farther still. Plutocracy shocks us every day with its viciousness, but that doesn’t mean God will strike it down. The middle-class model worked much better for about ninety-nine percent of the population, but that doesn’t make it some kind of dialectic inevitability. You can build a plutocratic model that will stumble along just fine, like it did in the nineteenth century. It requires different things: instead of refrigerators for all, it needs bought legislatures and armies of strikebreakers—plus bailouts for the big banks when they collapse under the weight of their stupid loans, an innovation of our own time. All this may be hurtful, inefficient, and undemocratic, but it won’t dismantle itself all on its own.

That is our job. No one else is going to do it for us.

Thomas Frank is a Salon politics and culture columnist. His many books include "What's The Matter With Kansas," "Pity the Billionaire" and "One Market Under God." He is the founding editor of The Baffler magazine.

Koch-Funded Network Jumps To Defend Billionaire Brothers Against Democratic Attacks

Huffpost Politics

Paul Blumenthal 

 

 

Koch-Funded Network Jumps To Defend Billionaire Brothers Against Democratic Attacks

 

 

Posted: 03/28/2014 6:42 pm EDT Updated: 03/28/2014 6:59 pm EDT 

 

• Elections 2014 David Koch Senate Majority Pac Koch Brothers Americans for Prosperity Charles Koch 2014 Election Public Notice Dark Money Campaign Finance Politics News

WASHINGTON -- A nonprofit group funded by Charles and David Koch to promote the reduction of national debt and government spending has been pressed into service as a defender of the billionaire brothers, who have come under attack by Democrats for plowing millions into conservative causes.

Public Notice, a Koch-connected, Washington-based nonprofit organized as a limited liability corporation with 501(c)(4) tax status, sent opposition research on Senate Majority PAC, a super PAC supporting Democratic candidates, and the candidates the group supports to reporters on Friday. The research said Senate Majority PAC's attack on the Koch brothers as out-of-state billionaires was hypocritical, since Senate Majority PAC is funded by billionaires from California and New York.

Public Notice's move into opposition research suggests that the full network of nonprofits funded by the Koch brothers and their allies may be deployed into the brothers' political battles. Democratic candidates in this year's elections and their backers, including the Senate Majority PAC, have begun fierce attacks directly aimed at the publicity-shy brothers in recent weeks, portraying them as un-American villains whose massive spending is ruining the political process.

Public Notice hadn't before publicly engaged in direct political activity or targeted specific Senate campaigns. Its involvement in opposition research on Senate candidates and super PACs appears to be a change in tactics to help the broader fight waged by the lead Koch group, Americans for Prosperity, which has spent at least $25 million on television and radio advertising in Senate races in the past year.

A Public Notice spokesman didn't respond to a request for comment.

Public Notice, founded in 2010, had been exclusively focused on promoting the reduction of the national debt and slashing discretionary government spending, and spending on safety net programs like Social Security and Medicare. The organization also has pushed to repeal Obamacare and block increases in the federal debt limit. Most of these efforts involved paid television advertising and social media targeted at young people.

Like most Koch-connected groups, Public Notice is organized as a confusing string of limited liability corporations, disregarded entities and nonprofits, obscuring the undisclosed "dark money" it accepts. At the top of its organizational structure is a disregarded entity called POFN LLC. Public Notice is legally registered as SGC4 Trust, but operates under the name Public Notice. The group also operates a 501(c)(3) educational nonprofit called Public Notice Research & Educational Fund.

The structure of the Koch political network has been detailed by the Center for Responsive Politics, The Washington Post and ProPublica. The tax forms referenced below were all accessed through CitizenAudit.org.

Freedom Partners Chamber of Commerce, the central node in the Kochs' political money network, was the main source of funds for SGC4 Trust, the group operating as Public Notice, in 2012. Freedom Partners provided $5,466,250 to Public Notice from Nov. 2, 2011, to Oct. 31, 2012. According to Public Notice's tax forms covering the period May 1, 2011, to April 30, 2012, Public Notice raised $5.9 million.

During this period, Public Notice also received $1.67 million from TC4 Trust, another Koch-linked nonprofit acting as a grant-making bank for other nonprofits. The TC4 Trust contribution came during a period from July 1, 2011, to June 30, 2012.

From May 1, 2010, to April 30, 2011, Public Notice received funds from TC4 Trust and another grant-making Koch-linked money bank, Center to Protect Patients Rights (now called American Encore). During this period, TC4 Trust sent POFN LLC $7.3 million while CPPR provided $711,000. Public Notice raised $11.9 million during this period.

The links between the Koch world and Public Notice do not end with funding. Public Notice's sole trustee and director Gretchen Hamel previously worked as program leader for TC4 Trust, the Koch-linked group that has been the largest funder of Public Notice. Hamel's employment at TC4 Trust was reported on tax forms covering the period Aug. 28, 2009, to June 30, 2010. Public Notice's first tax form states that the organization began operations on May 1, 2010.

Other Koch-linked groups that had mostly been on the sidelines of political fights are now getting involved. According to the Sunlight Foundation's Political Ad Sleuth, American Encore, previously CPPR, has purchased time on Minnesota airwaves to run an advertisement targeting Sen. Al Franken (D-Minn.) for his support of IRS rules cracking down on excessive political activity by nonprofits like American Encore.

CPPR had previously advertised on health care issues. But it hadn't run advertisements mentioning specific members of Congress, nor did its affiliated group, the Coalition to Protect Patient Rights.

Koch Brothers Meet Again to Prep for "Mother of All Wars"

Mother Jones

Political MoJo

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→ Corporations, Dark Money, Elections, Money in Politics, The Right

Koch Brothers Meet Again to Prep for "Mother of All Wars"

—By Gavin Aronsen

| Fri Feb. 3, 2012 4:00 PM GMT

 

 kochmbmproductions/YouTube; Globe Photos/ZUMA

Last week, the billionaire industrialist Koch brothers held their latest get-together with wealthy conservative political donors. At these meetings, held twice a year under a veil of secrecy, Republican all-stars discuss election strategy and vet potential presidential candidates like New Jersey Gov. Chris Christie. Last September, Mother Jones obtained exclusive audio recordings from a Koch seminar held outside Vail, Colorado, where Charles Koch had declared that the 2012 election would be "the mother of all wars" and thanked dozens of million-dollar donors who'd pledged to the cause.


According to a Huffington Post source, 250 to 300 guests attended the most recent event, which was held in Palm Springs, California. They included Citadel CEO Ken Griffin and casino billionaire Sheldon Adelson, who along with his wife has given a staggering $10 million to a pro-Newt Gingrich super-PAC. Guests reportedly pledged a total of $40 million to the effort to oust Obama, with Charles and David Koch promising an additional $60 million. But it wasn't all fun and games, the source said, as guests complained that recent meetings had focused more on "alpha male" anti-Obama chest-pounding than the strategy
sessions for which they'd been known.

Former ThinkProgress.org blogger Lee Fang also got a peek at the Palm Springs event, which was dubbed "Defending Free Enterprise." Fang, who first reported on the Koch seminars before the 2010 midterms, caught wind that someone had booked all 560 rooms at the Rennaisance Esmeralda Resort & Spa for three nights in late January and decided to investigate. "I arrived at the hotel the night before the event," Fang wrote, "but was followed closely by security and asked to leave the next morning before the Koch meeting guests arrived." During the seminar, "helicopters, private security, and police officers from neighboring cities patrolled the area constantly."


 

A Greenpeace blimp protests a 2011 Koch seminar in California. Gus Ruelas/Greenpeace

Fang wasn't able to get inside, but he did manage to identify several additional guests by scoping out their private jets at the Palm Springs International Airport. They included billionaire investor Phil Anschutz and Kenny Troutt, a Dallas investor who's given $700,000 to conservative super-PACs. Fang also noticed jets belonging to Harold Hamm, an Oklahoma oil tycoon, and Foster Friess, a Wyoming investor who's helped keep Rick Santorum afloat by pumping $381,000 into two super-PACs supporting the candidate. At last year's Vail seminar, Charles Koch thanked both Friess and Hamm (and Griffin) for their million-dollar contributions.

At the airport, Fang also spotted Phil Kerpen, vice president of the Koch-affiliated tea party group Americans for Prosperity, which recently spent $5 million on anti-Obama attack ads. Kerpen admitted that he hopes the 2012 election will result in "aggressive cuts to government spending and to regulation to allow robust economic growth," but not before complaining to Fang that "I thought they had stopped all leaks" concerning the whereabouts of the Koch seminars.


On the contrary, the meetings have become increasingly visible since they began quietly in 2003. Last January, Greenpeace flew an anti-Koch blimp (above) over the brothers' Palm Springs seminar. This That year, hundreds of anti-Koch protesters showed up outside the hotel amd were met by 60 police officers in riot gear who made 25 arrests.

10 Tough Truths From Harry Reid About The Kochs’ Lies, Propaganda and Radical Un-American Agenda

AlterNet / By Steven Rosenfeld

10 Tough Truths From Harry Reid About The Kochs’ Lies, Propaganda and Radical Un-American Agenda

 

The Democratic Senate Majority Leader has had enough.

US Senate Majority Leader, Harry Reid, speaks to reporters on Capitol Hill, in Washington, DC, on March 5, 2014

March 12, 2014  |   

 

 

Senate Majority Leader Harry Reid, a former boxer, has taken off the gloves to fight back against the Republican Party’s richest patrons: the libertarian billionaire oil barons, David and Charles Koch. Speaking from the U.S. Senate floor and in press conferences, Reid has forcefully started to do what much of the Democratic Party hasn’t so far—hit back at multi-million dollar political campaigns filled with lies about Obamacare, propaganda that climate change is a myth, and efforts by lobbyists and elected Republicans to gut public health laws and other safety nets.

What follows are 10 excerpts from Reid’s speeches in the past two weeks that begin to rebut the Koch’s political falsehoods and expose their real agenda. 
      
1. Kochs’ Anti-Obamacare Ads Filled With Lies

“I’m confident that most of you, if not all of you have seen this little piece in the Detroit News [noting that a women featured in an anti-Obamacare TV ad will save $1,000 in out-of-pocket healthcare expenses in 2014], where the secretive Koch brothers are spending untold millions to rig the system to benefit the top one percent at the expense of the middle class. So this is further evidence of the shadowy campaign of distortion and deception. You know, I have no problem with the people appearing in these ads. Even though it’s interesting, it’s been proven that the—one of the ads they ran in Alaska was an actor and the same actor is appearing in the same ad basically around the country. People have a right to be actors and appear in ads if they are real people, but they don’t have the right to lie… that’s what they’ve been doing.” (Press Conference, 3/11/14)

2. Koch Ads Filled With False GOP Fantasies

“Despite all that good news, there are plenty of horror stories being told. All of them are untrue, but they are being told all over America. The leukemia patient whose insurance policy was canceled and would die without her medication—Mr. [Senate] President, that is an ad being paid for by two billionaire brothers that is absolutely false; or the woman whose insurance policy went up $700 a month—ads paid for around America by the multibillionaire Koch brothers, and the ad is false. We heard about the evils of ObamaCare, about the lives it is ruining in the Republican stump speeches and in ads paid for by oil magnets, the Koch brothers. But those tales turned out to be just that—tales, stories made up from whole cloth, lies, distorted by the Republicans to grab headlines or make political advertisements.” (Floor Remarks, 2/26/14)

3. What Is Their Self-Described “Radical Agenda?” 

“Remember, “radical agenda” is what they called themselves. They said their agenda was radical, and it is. Eliminating Social Security, going against the minimum wage increase and being against it, just – these two brothers don’t like government. What they would do if they had their way is get rid of the EPA [Environmental Protection Agency], and we know that; they tried to get formaldehyde not to be restricted. And we all know about formaldehyde or if we don’t, we should. It causes cancer. What they want is lower taxes for themselves, while the middle class is left on their own. And it means what is happening in our country, led by the Koch brothers: the rich are getting richer, the poor are getting poorer, and the poor middle class is being squeezed out of existence.” (Press Conference, 3/11/14)

4. Kochs Make Billions From Dirty Industries

“These are the same brothers whose Koch Industries ranks near the top of the list of America’s worst toxic air polluters. Those are the same brothers whose company, according to a Bloomberg investigation, paid bribes and kickbacks to win contracts in Africa, India, and the Middle East. These are the same brothers who, according to the same report, used foreign subsidiaries to sell millions of dollars of equipment to Iran, a state sponsor of terrorism. Let’s make sure we understand that. I may not have said it quite right. These are the same brothers who, according to the same report, used foreign subsidiaries to sell millions of dollars of equipment to Iran, a state sponsor of terrorism. We all know that. (Floor Remarks, 3/4/14)

5. Kochs Don’t Respect Democracy or Government


“The Koch brothers already believe they can play by a different set of rules. Think about how an America rigged by the Koch brothers would look. The Koch brothers do not care about creating a strong public education system in America. The Koch brothers do not care about maintaining the strong safety net of Medicare and Social Security. The Koch brothers do not care about the guarantee of affordable, quality health insurance for every American… Their extreme vision for America means abolishing Social Security and Medicare. Their extreme vision for America means eliminating minimum wage laws. Their extreme vision for America means putting insurance companies back in charge of your health care and denying coverage for preexisting conditions. That is the way it used to be.” (Floor Remarks, 3/4/14)


6. Kochs: Class Warriors With Un-American Tactics


“What is un-American is when shadowy billionaires pour unlimited money into our democracy to rig the system, to benefit themselves and the wealthiest 1 percent… Based on their actions and policies they promote, the Koch brothers seem to believe in an America where the system is rigged to benefit the very wealthy. Based on Senate Republicans’ ardent defense of the Koch brothers and the fact that they advocate for many of the same policies as the Koch brothers, it seems my Republican colleagues also believe in a system that benefits billionaires at the expense of the middle class.” (Floor Remarks, 3/4/14)


7. Koch’s Political Business Model: Money Laundering 


“In 2010 the Supreme Court opened the floodgates of corporate money into electoral politics. That was with the Citizens United decision. Since mega donors such as Charles and David Koch can launder their huge contributions using shadowy shell groups and so-called nonprofits, it is difficult to tell exactly how much they have invested so far.

“Investigative reporting done by some of the most respected news outlets in the country has revealed that the Koch brothers funnel money through a web of investor groups and advocacy organizations that are immune from disclosure rules, such as the Club for Growth, Heritage Action, the NRA, and the U.S. Chamber of Commerce. We may never know how much money the Koch brothers are spending to rig the system, to rig the system for themselves.” (Floor Remarks, 3/4/14)

“They hide behind all kinds of entities. It is not just their front organization, Americans For Prosperity. They give money to all kinds of organizations—lots of money. When you make billions of dollars a year, you can be, I guess, as immoral and dishonest as your money will allow. It is too bad they are trying to buy America, and it is time the American people spoke out against this terrible dishonesty and about these two brothers who are about as un-American as anyone I can imagine.” (Floor Remarks, 2/26/14)

8. Kochs Bought And Own The GOP

“Their investments have paid off already. In November 2010, the petroleum industry walked right through the door the Supreme Court had opened and spent hundreds of millions of dollars to elect a Republican majority to the House of Representatives. That Republican majority has effectively shut down any hope of passing legislation to limit the pollution that has caused climate change. That Republican majority is, in fact, working to gut the most important safeguards to keep cancer-causing toxins and pollution that cause sickness and death out of the air we breathe and the water we drink…

“The Koch brothers are already seeing a return on their 2010 investment in a Republican House of Representatives that does what they want done. But they certainly have not stopped there. The Koch-backed Americans for Prosperity alone spent $400 million in misleading attack ads last election cycle… Koch-backed groups have spent a vast sum trying to elect Republican Senate candidates this year, a sum that dwarfs even the National Republican Senatorial Committee’s own spending.” (Floor Remarks, 3/4/14)

9. Kochs Falsely Claim This Is Free Speech

“Senate Republicans call this freewheeling spending by anonymous donors nothing more than “free speech.” Senate Republicans say that whoever has the most money gets the most free speech. But that is not what America’s Founding Fathers said. They did not mean that by free speech. The Founders believed in a democracy where every American had a voice and a vote.

“This discussion, this fight, is not just about health care or even about a few hundred million dollars in disingenuous ads. This is about two very wealthy brothers who intend to buy their own Congress, a Congress beholden to the money and bound to enact their radical philosophy. Witness this: Senators beholden to wealthy special interests; Republican senators rush to the floor to defend the Kochs whenever I say something negative about the brothers or their radical agenda.

“Their extreme vision for America means stripping tens of millions of people of the benefits in the Affordable Care Act today. Their extreme vision for America means allowing the gap between the wages women and men earn for the same work to keep growing. Their extreme vision for America means giving giant corporations the unfettered right to dump toxins in our rivers and streams, on our mountains and our valleys, and to give them even more tax breaks while they destroy our environment.” (Floor Remarks, 3/4/14)

10. Reid: I Will Keep Exposing The Kochs

“I am not oblivious that my comments about the Koch brothers have caused some controversy. Anyone who has turned on FOX News knows that I have gotten under their skin. But I will continue to shine a light on their subversion of democracy.

“When I hear my Republican colleagues defending the Koch brothers as they have, I recall the words of [Former Sen.] Adlai Stevenson: “I have been thinking that I would make a proposition to my Republican friends ..... that if they will stop telling lies about the Democrats, we will stop telling the truth about them.” As long as the Koch brothers continue to spend hundreds of millions of dollars buying elections, I will continue to do all I can to expose their intentions.” (Floor Remarks, 3/4/14]

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).