Interesting article by Andy Kroll in Mother Jones, “How the Oligarchs Took America” reports on how America became a country “of the rich, by the rich, and for the rich.” The article uses information from a new book by political scientists Jacob Hacker and Paul Pierson — “Winner Take All Politics.”

It says the march to oligarchy started with President Jimmy Carter, who slashed the capital gains tax from 48% to 28%. The article says, “Ronald Reagan, you could say, simply took the baton passed to him by Carter. His 1981 Economic Recovery and Tax Act (ERTA) bundled a medley of goodies any oligarch would love, including tax cuts for corporations, ample reductions in the capital gains and estate taxes, and a 10% income tax exclusion for married couples in two-earner families.”

The article quotes Hacker and Pierson: “ERTA was Ronald Reagan’s greatest legislative triumph, a fundamental rewriting of the nation’s tax laws in favor of winner-take-all outcomes.”

The article condemns the Supreme Court’s Citizen’s United decision that it says empowered the political power of the oligarchy by opening the floodgates for big money from anonymous donors. It says, “Even for dedicated reporters, tracking down these groups is like chasing shadows: official addresses lead to P.O. boxes; phone calls go unreturned; doors are shut in your face.”

Excerpts from the article:

• The right wing won the opening battle. In the 2010 midterm elections, shadowy outside organizations (who didn’t have to disclose their donors until well after Election Day, if at all) backing Republican candidates doled out $190 million, outspending their adversaries by a more than two-to-one margin, according to the Center for Responsive Politics.
• Their investments in conservative candidates across the country paid off: the 62 House seats and six Senate seats claimed by Republicans were the most in the postwar era—literally, a historic victory.
• After World War II, a swelling middle class was the most powerful voting bloc, while, in those same decades, the working and middle classes enjoyed comparatively greater economic prosperity than their wealthy counterparts. Kiss all that goodbye. We’re now a country run by rich people.
• American policy has been so skewed toward the rich that we’re now living through the worst period of income inequality in modern history. Consider the statistics: 50 years ago, the wealthiest 1% of Americans accounted for one of every 10 dollars of the nation’s income; today, it’s nearly one in every four. Between 1979 and 2006, the average post-tax household income (including benefits) of the wealthiest 1% increased by 256%; the poorest households saw an increase of 11%; middle class homes, 21%, much of which was due to the arrival of two-job families.
• The number of Americans earning a steady income declined by 4.5 million between 2008 and 2009, and the average wage in the US dipped by 1.2%, to $39,055. On the other hand, the average wage among Americans earning more than $50 million per year was $91 million in 2008 and $84 million in 2009.
• The origins of oligarchy lay in the late 1970s and in the unlikely figure of Jimmy Carter, a Democratic president presiding over a Congress controlled by Democrats. It was Carter’s successes and failures, they argue, that kicked off what economist Paul Krugman has labeled “the Great Divergence.”
• Ronald Reagan, you could say, simply took the baton passed to him by Carter. …

Paul Pierson in this clip talks about facts in his book, “Winner Take All Politics”

• The momentum of the tax-cut fervor carried through the presidencies of George H.W. Bush and Bill Clinton, and in 2000 became the campaign trail rallying cry of George W. Bush.
  Where rewriting the tax code proved too politically difficult, demolishing regulations worked almost as well. This has been especially true in the world of finance. There, a legacy of deregulation transformed banking from a relatively staid industry into a casino culture, ushering in an era of eye-popping profits, lavish bonuses, and the “financialization” of the American economy.
• Republican Senator Phil Gramm of Texas, who as an aide to presidential candidate John McCain infamously called America a “nation of whiners,” [20] was, in fact, the driving force behind two of the most influential pieces of deregulation in recent history.
• In 1999, President Clinton signed the Gramm-Leach-Bliley Act, a bevy of deregulatory measures that obliterated Glass-Steagall. In December of the following year, Gramm quietly snuck the 262-page Commodity Futures Modernization Act into a massive $384-billion spending bill. Gramm’s bill blocked regulators like the Securities and Exchange Commission (SEC) from cracking down on the shadowy “over-the-counter derivatives” market, home to billions of dollars of opaque financial instruments that would, years later, nearly demolish the American economy.
• As presidents, both Bill Clinton and George W. Bush wrapped their arms around financial deregulation. As a result, in a binge of financial gluttony, Wall Street grew fat in ways never previously seen. Between 1929, the year the Great Depression began, and 1988, Wall Street’s profits averaged 1.2% of the nation’s gross domestic product; in 2005, that figure peaked at 3.3% as industry bonuses soared ever-higher. In 2009, bad times for most Americans, bonuses hit $20 billion.
• No understanding of the rise of our New Oligarchs could be complete without exploring the effects of the Supreme Court’s January Citizens United decision, which set their power in cement more effectively than any tax cut ever could. Before Citizens United, the rich used their wealth to subtly shape policy, woo politicians, and influence elections. Now, with so much money flowing into their hands and the contribution faucets wide open, they can simply buy American politics so long as the price is right.
• What the present Supreme Court, itself the fruit of successive tax-cutting and deregulating administrations, has ensured is this: that in an American “democracy,” only the public will remain in the dark. Even for dedicated reporters, tracking down these groups is like chasing shadows: official addresses lead to P.O. boxes; phone calls go unreturned; doors are shut in your face.
• Then there’s the roster of corporations who have used their largesse to influence American politics. Health insurance companies, including UnitedHealth Group and Cigna, gave a whopping $86.2 million to the US Chamber to kill the public option, funneling the money through the industry trade group America’s Health Insurance Plans. And corporate titans like Goldman Sachs, Prudential Financial, and Dow Chemical have given millions more to the Chamber to lobby against new financial and chemical regulations.
• As a result, the central story of the 2010 midterm elections isn’t Republican victory or Democratic defeat or Tea Party anger; it’s this blitzkrieg of outside spending, most of which came from right-leaning groups like Rove’s American Crossroads and the US Chamber of Commerce.
• Spending in the 2012 elections will smash all records. Think of it this way: in 2008, total election spending reached $5.3 billion, while the $1.8 billion spent on the presidential race alone more than doubled 2004’s total. How high could we go in 2012? $7 billion? $10 billion? It looks like the sky’s the limit.
• Few solutions exist to staunch the cash flow: the DISCLOSE Act, intended to counter the effects of Citizens United, twice failed in the Senate this year; and the best option, public financing of elections, can’t even get a hearing in Washington.
• Until lawmakers cap the amount of money in politics, while forcing donors to reveal their identities and not hide in the shadows, the New Oligarchy will only grow in stature and influence. Never before has the United States looked so much like a country of the rich, by the rich, and for the rich.

I love this clip of Neil Young talking with David Letterman. Neil jokes that he is working on a new song, “Just Singing A Song Won’t Change The World.” He banters with Paul Schafer and finally says, “You can keep trying, though.”

It’s a good question: what can change the world? Americans, generally speaking, believe the answer is democracy.

I keep writing posts saying in different ways that “Democracy is the Answer.” Name a problem — more democracy is the answer.

• Raising America’s standard of living — more democracy is the answer.
• Transforming our system of public education — more democracy is the answer.
• World peace — more democracy is the answer.

In response to a recent post, Stan Hirtle replied and said the “Waiting for Superman” movie delivers this message: “America’s standard of living arguably depends on having a higher skilled, higher educated work force than in the past, and therefore we can be less tolerant of the education results of the past.”

The movie doesn’t suggest that for our failing economy more democracy is the answer, it says a more highly trained work force is the answer. Diane Ravitz calls the movie “propaganda.”

The idea that the focus of our system of public education should be to maintain and improve the American standard of living is an idea so often expressed, we don’t recognize it as propaganda.
Here are two recent statements by President Obama:

• “Make no mistake: Our future is on the line. The nation that out-educates us today is going to out-compete us tomorrow. To continue to cede our leadership in education is to cede our position in the world.“
• “When countries that out-educate us today, they will out-compete us tomorrow. Giving our kids the best education possible is an economic imperative. That’s why, from the start of my administration, we’ve been fighting to offer every child in this country a world-class education”

Secretary of Education, Arne Duncan, says: “Nothing — nothing is more important in the long-run to American prosperity than boosting the skills and attainment of the nation’s students.”

But, if American test scores were at the top of the chart, and our students were outscoring students of other nations in science and math, our current unemployment figures would be substantially unchanged.

Alfie Kohn notes:

“ For nations, there’s little correlation between average test scores and economic vigor. The late Gerald Bracey, for example, found 38 countries whose economies had been rated on the Current Competitiveness Index calculated by the World Economic Forum and whose students’ test scores had also been assessed. There was virtually no correlation between countries’ scores on the two lists. … Consider Japan’s outstanding test scores in the 1980s and its dismal economic performance in the 1990s.”

Low test scores didn’t cause our current economic crisis, and high test scores will not solve our economic problems. Blaming public education for our poor economy is effective propaganda — a way for the ruling oligarchy to manage public opinion — but, raising test scores will not improve the economy. It is illogical that, if our system of public education could succeed in dramatically accomplishing Duncan’s goal of “boosting the skills and attainment of the nation’s students,” sufficient good jobs would somehow materialize.

Citizens in the old Soviet Union demonstrated greater academic accomplishment than citizens in the United States. But academic accomplishment in the old Soviet Union did not translate into prosperity.

The Soviet Union had a system problem, and, it is the system that matters most — not the individuals in the system. It was impossible that the Soviet system could produce wide-spread prosperity, because it was never the purpose of the system. The point of Soviet Union system was not to produce prosperity, but to give more power and privilege to those already privileged.

America also has a system problem. Our central problem is not that school children can’t understand the quadratic formula or can’t comprehend photosynthesis. The problem is our system of democracy is failing. In practical terms, we have an oligarchic system, not a democratic system. To solve our economic malaise we need to vitalize our system of democracy. More democracy is the answer.

The idea that More Democracy Is the Answer is a fundamental idea with great power. But where are the documentary movies that make that case? Where are the talk radio programs that are working day and night to stir people up so they begin to express passion for this fundamental idea?

The need to vitalize our democracy seems so obvious to me that I keep predicting that eventually it will be obvious to many others as well. My prediction, that I keep returning to, is, The Ascending Issue In Our Democracy Is Democracy Itself

Maybe it is just wishful thinking, but, I believe the grassroots is awakening. Stable, prosperous communities such as Kettering, where I live, whose public education is deemed “Excellent,” have the greatest capacity for creating an authentic democratic grassroots movement. Such a movement will be a nonpartisan effort to build community. The core of this movement, initially, I believe, will be the conviction that local control of public education must be returned to local communities.

A grassroots’ movement requires that people begin to act on their convictions. Note to self: Changing the world means getting off one’s duff and actually doing something. Neil’s right — just singing a song won’t change the world — even if the song is about democracy.