LEGISLATING FROM THE BENCH: THE REAL G.O.P. AGENDA

By Ronald T. Fox

If you’re like me and inclined toward progressive politics, you likely continue to be amazed as to why so many Americans continue to vote for Republicans when many of their political beliefs and actions, especially on economic and financial issues, are so broadly unpopular. Solid majorities of Americans support gun control, regulating big banks, reducing greenhouse gasses, a woman’s right to choose to terminate a pregnancy, laws to protect public health and safety, a wider access to healthcare, raising the minimum wage, protecting voting rights, and a progressive tax system that makes corporations and wealthy individuals pay more. These are all issues where republican lawmakers have defied the majority will of the American people.

How do they continue to get away with it? I’ve written in the past on Phronesis about how our political system is structured to thwart majority rule, citing the disproportionate influence moneyed interests, which are easily expressed through a constitutional system that in the electoral college, the small state-dominated Senate, and state and local governments stifles majority sentiment. I’ve written about the impact of gerrymandering and the failure of out communication outlets to educate the public on the realities of power and influence in our governance. I’ve addressed the failure of the Democratic Party to address working class concerns. I've posted about white resentment of identity politics. I’ve even pointed to the stupidity of voters (though such condescending academic preaching admittedly contributes to alienating ordinary Americans).

These factors help explain how Republicans, and their wealthy backers, have been able to thwart popular progressive legislation and retain their solid, if primarily white, electoral base. Still it is astonishing how a political party that has no clear legislative agenda other than obstruction, campaigns without a platform, goes at length to tell us what they’re against rather than for, has been so successful in achieving a policy agenda skewed toward rewarding the few Americans with wealth and power.

Ian Nillhiser’s opinion piece in the April 2, New York Times offers a clue: the Republican Party relies on the judiciary. The Supreme Court’s conservative majority has for decades pushed an agenda that benefits corporations and the wealthy at the expense of the rest of us. Court decisions have advanced the Republican vision in which government is prevented from regulating business, protecting civil and voting rights, and providing a basic social safety net.  Why should Republicans operate openly in the messy political arena when they can quietly achieve goals through the courts? How many Americans are aware of, and can comprehend, complicated court decisions, or non-decisions when they refuse to hear a case? You get the point: legislating from the bench enables them to dodge accountability for unpopular policies.

The conclusion for progressives and liberal to draw from the current reality of judicial legislating is depressing, to say the least. With conservatives controlling the Supreme Court and much of our nation’s networks of federal, as well as state and local, courts, and with most justices relatively young, we face years of rulings destined to benefit wealthy private interests and the broader agenda of conservatives. This endangers President Biden’s agenda, but, more ominously, our cherished Democracy.

I’m including Nillhiser’s op-ed below as a guest commentary. For a fuller exploration of his thesis, read his book: The Agenda: How a Republican Supreme Court is Reshaping America.

ANOTHER INSULT: WALL STREET FINES ARE TAX DEDUCTIBLE

 

By Ronald Fox

 

 

It a number of previous posts I bemoaned the failure of Federal prosecutors to subject big Wall Street banks to criminal prosecution for their assortment of misdeeds. (One notable exception was the criminal prosecution of Credit Suisse. See Credit Suisse Pleads Guilty To A Felony, But Gets Off Easy). Without criminal prosecution, I concluded that the heavy fines imposed on JPMorgan Chase and other Wall Street behemoths would not deter the various criminal wrongdoings that got them in legal hot water.  At the same time, I welcomed the seemingly huge fines, which federal prosecutors assured us were extremely stiff, the highest ever paid by banks.  They did seem impressive.  I said "seem," because now we know the big banks will pay nowhere near the full cost of the settlements.  A big chunk of the billions of dollars in fines they have to pay to various federal agencies and regulators is tax deductible.  

 

ECONOMIC INEQUALITY: THE POLITICAL DIMENSION

  By Ronald T. Fox  

"We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." 

                     Louis Brandeis

Is social inequality an inherent feature of free-market capitalism and if so is this necessarily a bad thing? Ideological liberals tend to think so. Most conservatives strongly disagree. To them inequality is a natural result of what happens in a free society where citizens possess vastly different levels of intelligence, education, talent, work ethics and personal drive. Soaring incomes at the top are seen as a just reward for initiatives taken and services rendered, like job creation. The investors of capital produce economic growth which provides economic opportunities for all. As the economy grows, all incomes will rise and an expanding middle class will enjoy a greater share of the national wealth.   

It would be great if this is how things really worked, but as is abundantly clear to most, save those living in the splendid insulation great wealth provides, the America of today presents quite a different picture. Social inequality in the United States is souring, reaching proportions not seen since the Gilded Age. The return on capital has increased much faster than economic growth and incomes have not only failed to rise, they’ve actually declined over the last couple of decades (median middle-class household income peaked at $56,080 in 1999 and it stands at roughly $50,017 now). This development finds average Americans struggling to grab a share of the American Dream. It also finds them increasingly marginalized in our political system. The wealth that has been accumulating at the top of our social strata has generated wide political inequality that is threatening the very foundation of our democratic system. It has turned America into a plutocracy.  

Extreme inequality is harming American society in many ways. I’ve written about some in previous posts (see: Does Economic Inequality Matter?  Economic Inequality and the Failure of Elites,  Economic Inequality and the Cheating Culture, and The Collapse of American Journalism and the Growth of Institutional Corruption). This essay will focus on the political dimension of economic inequality.

THE COLLAPSE OF INVESTIGATIVE JOURNALISM AND THE GROWTH OF INSTITUTIONAL CORRUPTION

By Ronald Fox

In my essay on economic inequality and the cheating culture, I admonished our governmental regulatory system for aiding and abetting the growing prevalence of institutional corruption and individual cheating in America. I would be remiss if I did not also include the changing face of political journalism in my indictment. Political journalism in the United States has suffered a serious decline in the last three decades. This is primarily the result of greater concentrated media ownership in the hands of large corporations, who have adopted market-driven, business models mandating, among other things, the downsizing of news divisions, which they no longer consider profitable. A number of once great newspapers and news magazines have even ended daily publication. The result has been less coverage of political issues and elections and a narrower defining of newsworthiness to the priorities of the owning corporation‘s bottom line. These priorities no longer include watching out for, and going after, institutional corruption and wrong-doing.

Corporate media has become full-fledged members of the power structure. Rather than speaking to power, as was the press tradition for most American history, today it largely echoes the priorities and policies of the economic elite. Free-market theories and prescriptions are the corporate media’s guiding light, which in practice leads them to take a generally conservative, pro-business slant on economic and fiscal issues. They use their financial and communication power to consolidate the power of the economy in the service of the economic elite. This makes off-limits and unquestioned those areas that people in power agree should be left alone. As business conglomerates, with vast arrays of diverse holdings, the media giants tend to avoid presenting any bad news about topics near and dear to their own financial hearts (they certainly wouldn’t want to bite the hand that feeds them).

ECONOMIC INEQUALITY AND THE CHEATING CULTURE

By Ronald Fox

The notion that each American has the right to pursue happiness and the freedom to strive for a better life through hard work and fair aspiration lies at the heart of the “American Dream.” This idea, which drove the hopes and aspirations of Americans for most of the country’s history, begin to be transformed in the late 1970s when wealth began to steadily ascend to the top of the economic hierarchy. According to David Callahan, in his book, The Cheating Culture: Why More Americans are Doing Wrong to Get Ahead, the soaring income gap has given rise to a fundamental value shift in America: the time-honored commitment to community, self-reliance, fair play, truthfulness, compassion for the less fortunate, and rule-following, has morphed into selfishness, hedonism, greed, jealousy, and an excessive preoccupation with materialism. It has also inspired a growing number of American institutions as well as individual citizens to cut corners to get ahead.

The growing income gap has divided Americans and weakened our social fabric—undermining the notion that we’re all in this together and no person is above the law. The lavish and ostentatiously displayed lifestyles of the super rich, relentlessly displayed everyday on TV and in movies and magazines, has transformed perceptions of what it means to live the good life. Instead of aspiring to a standard of living relative to one’s peer group, the proverbial Joneses, a growing number of Americans now aspire to emulate the lifestyles of the rich and famous. Everyone wants not just a better life, but one filled with jet-setter luxuries. In an earlier time when there was less wealth at the top, Americans aspired to get a “fair share;” now they seem to want it all, whatever it takes. America is now engulfed in a greed-driven, money culture that has reshaped the moral climate of corporate America as well as the personal ethics of American citizens.

ECONOMIC INEQUALITY AND THE EROSION OF THE AMERICAN DREAM

The Nazca lines are a series of ancient geoglyphs in the Nazca Desert in southern Peru. The hundreds of individual figures range in complexity from simple lines to stylized hummingbirds, spiders, fish, and lizards. Archeologists, ethnologists, and anthropologists have studied the ancient Nazca culture to try to determine the purpose of the lines and figures, but no single theory or explanation has come to be widely accepted. One interesting hypothesis is that the construction of the lines kept the Nazca people busy. In addition to farming and hunting, ongoing construction of the lines gave the community a sense of purpose and structure so that the people could move forward in a productive way and not get bogged down in competition and conflict.

The creation of the Nazca lines may serve a similar societal purpose to that of the American Dream. Numerous opinion polls conducted since the 1980s indicate that the majority of Americans believe that working hard is the most important element of getting ahead. These same polls also indicate that achieving the dream through fair means is becoming increasingly difficult for future generations. The main cause of the disappearing American Dream is economic inequality. The product of a variety of decisions and actions, income inequality has grown at an alarming rate over the last several decades. According to the Congressional Budget Office October 2011 report “Trends in the Distribution of Household Income Between 1979 and 2007,” overall real average (after-tax) household income grew 62% over this 28-year period. However, for the top 1% of earners, household income grew 275%, and for the bottom 20% of earners, it grew only 18%. Today, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

DOES ECONOMIC INEQUALITY MATTER?

 

In the coming days, Phronesis will present a series of pieces on economic inequality in America. We are specifically interested in addressing the question: Does inequality really matter, and if so, in what ways? We will draw on practical wisdom derived from our respective academic training and research as well as years of first-hand experience as American citizens living in an increasingly unequal world. Accordingly we will strive to offer evidence-based, commentaries on the issue of inequality. We hope to stimulate awareness and discussion of this important topic.

As an introduction to the inequality posts to come, let me say something about the main battle line in the inequality debate. Americans have widely varying beliefs and opinions about inequality. Those who embrace a free-market philosophy, usually people of conservative persuasion, tend to see inequality as a natural and healthy feature of an efficient running economy. Inequality is natural because in a free society with a free market system, individual differences in intelligence, education, talent, ambition, and work ethic will produce varying levels of achievement. Simply put, the best and brightest will earn and accomplish more than those who lack attributes for success. The recent spike in income inequality was an inevitable result of the globalization of finance and advances in technology in an increasingly complex world.

Free-market advocates cite two reasons why inequality is a natural thing. First, they believe it’s the people at the top, the accumulators of capital, who possess the necessary smarts and wherewithal to invest wisely in productive enterprises. This will stimulate growth, create jobs, and generally enhance national prosperity. Not surprisingly, they tend to oppose government meddling and other obstructions to capital accumulation. The second reason is the so-called goal gradient phenomena: the existence of a social hierarchy serves as an incentive for self improvement. People will strive to climb the ladder of success in order to, as the saying goes, “keep up with the Joneses.”

Other Americans have less faith in the capacity of the free market to promote the general welfare. Liberal in their worldviews, these people see a necessary role for government to intervene in the economy to protect consumers, stimulate growth, smooth out the boom and bust cycles inherent in a capitalist society, and generally ensure fairer economic outcomes for all citizens. This school of thought views inequality, when it reaches extreme proportions, as harmful to society. Extreme inequality confers disproportionate economic and political power on the wealthy, who without effective constraints will prioritize their own interests to the detriment of the public good. According to this school of thought, the “trickle-down theory” of economics is just that-- a theory. Without government intervention, the trickle is more likely to be up than down. Those at the top of the economic pyramid will be prone to conspicuous consumption, which will instigate a value shift in American culture toward an excessive preoccupation with money and materialism. Rather than striving to live like one’s peer-group Joneses, money-driven consumers will endeavor to emulate the lifestyles of the rich and famous, a preoccupation that will lead to all sorts of destructive behavior.

It won’t be surprising to those who follow Phronesis that we are sympathetic to the liberal perspective on inequality, propagated most passionately by British economist John Maynard Keynes. Our posts on inequality will reflect this worldview. Nevertheless, the overall objective is to encourage readers to think about the meaning of inequality and its effects on the American economy, culture and political system. Has it shaped your life for better or worse?

ECONOMIC INEQUALITY AND THE FAILURE OF ELITES

 

By Ronald Fox

America’s most powerful and wealthy elites have always shaped our politics, economy and culture, sometimes for the good, and sometimes, not so good. The worst behavior of American elites has occurred historically when income has been highly concentrated at the top of the economic hierarchy: around the turn of the 20^th Century when corrupt, robber barons dominated the American economy, in the last few years leading up to the Great Depression, and, from the late 1970s to the present. Elites were at their best when income inequality was only modestly skewed. The period from the end of World War II up to the late 1970s was a golden era in the United States. With the effective tax rate for the highest income earners over 50%, and government spending as a percentage of GNP high, the economy grew, wages multiplied, economic opportunities flourished, and most Americans shared in the steadily growing, national prosperity. Economic inequality was the lowest since the Progressive Era.

This period also brought out the very best in elite behavior. The upper class took seriously the responsibility that comes with their power and visibility. They were engaged in community life and committed to public service; they tried to be good citizens. They enjoyed the good life, but often railed against conspicuous consumption. In their money-making ventures, they relied on an innate wisdom and savvy in their investment choices and in choosing the people with whom they worked. They tended to choose people like themselves, with breakaway independence of mind, wisdom, good judgment, empathy, imagination, and, to be sure, intelligence, though this was not the main thing they looked for. Upward mobility in America guaranteed the elite strata would be cross-fertilized with young minds bringing new ideas. Yes, they accumulated great wealth, but their share of the nation’s wealth was only modestly greater than the majority of working class wage earners. To be sure, the elites I’m describing were not all angels, but in comparison to those leading America today, their behavior was exemplary.