Billy Alfano Rosato PSC 1100 10 December 2012 Winner-Take-All Politics In Hacker and Piersons book Winner-Take-All Politics:

How Washington Made the Rich Richerand Turned Its Back on the Middle Class, the authors describe how our current economic and political system is failing because it deeply favors the very rich while ignoring the working class. This system draws from the shift in wealth towards the very wealthy who are now able to maintain their wealth by heavily influencing the political system. As such there has arisen an immense economic inequality between those at the very top 1 percentand even those in the top .1 or .01 percentand the rest of American society. Through all this, the authors want to create a roadmap to see how this situation arose and what needs to be done about it in order to save our American economy. The authors point out some of the defenses as to who we can blame for the current economic disparity, and then they show why this is only a myth. One of the first culprits that the authors try to attack is the skill-based technological change (Hacker 34). This change credits the growing social gap to a gap in technological education that has left the uneducated behind. However, in order for this to be true, there would need to be a distinct separation between those who have received a college education and those who have not. Evidence suggests that it is merely those at the very top that are pulling away from their colleagues who have had just as much education (35). Still some continue to support this idea of skill-based technological change as the cause for this inequality. It would follow that this change should be occurring in

other wealthy nations as well. This is not the case; other wealthy nations have not experienced the severe gap between the top and the bottom. The authors credit the political system for the pulling away of the top percent of Americans and the abandonment of the middle class. They claim that this is the work of "modern, efficient organizations operating in a much less modern efficient political system" (115). Union participation and effectiveness have seen a sharp decline as well which can account for some of the growing inequalities between CEOs and workers (59). With the absence of effective unions, workers are no longer protected from economic stagnation. Continuing with the problems of the political system, the authors note the increased showmanship of political campaigns as compared to the actual policy that is enacted throughout a term (105). As such, the influence of lobbies increases as financial backing for them does. Another new factor in shifting political ideologies is the emergence of think tanks which try to shift public opinion and policy (114). These outside influence on the government have helped shape policy and also helped ensure the success of the wealthy. In conclusion to their presentation of the issues, the authors try to provide some solutions to our current predicament. They reiterate that the divide between the rich and the not rich is not based on educational level but rather more often than not on the status into which you are born (290). All too often the financial problems are blamed on the economy. Rather, it is the political system in which we live that bolsters these problems by giving backing to the policies that maintain the current status (291). As such, the authors suggest that we need deep political change and reform in order to hope to cope with such difficult economic problems as we face today. They note that it will not be an easy process as there are many issues to consider. One of the biggest hurdles is getting past the well-organized economic elite through the generally

unorganized and uninformed voter (292). Although it is going to be very hard, with enough political force and organization the current trends can hopefully be reversed. In McChesneys article, This Isnt what Democracy Looks Like, he examines many of the same issues of economy inequality as Hacker and Pierson. In it, he crafts the notion of a supposed Dollarocracy which represents the current state of U.S. economic and political stances. Through this new model of a plutocracy, McChesney highlights the flaws of this system and how it has grown in the past thirty years The author starts by noting the disconnect between the popular opinion of Americans and the economic policies that are present today. Spending on war efforts and the vast corporate control of the government are not within the control of the average American (McChesney 1). In addition there is stagnation in class structure, growing poverty, and the collapse of social services which are going unnoticed and untreated by the government. The prevalence of the opinions and policies of the rich shows that there is a distinct gap between what policies are being passed and popular opinion. This gap is created by the policies of our government which favor larger corporations as a means of economic success and growth. As such, mainstream politics are becoming increasingly irrelevant to the social issues that need to be addressed and it can be argued that these policies are driving the government away from being able to deal with these issues. McChesney continues by pointing out the inherent disconnect between democracy and capitalism. In the first political equality is required in order to successfully complete while the latter creates severe economic inequality (2). This political equality that is the heart of democracy is undermined by the drive towards greater and greater economic inequality. Our system of capitalist democracy places political power in the hands of the very wealthy in order to

shape political landscape. This, in turn, ensures that the wealthy continue to enforce polices that will improve their state while never considering the welfare of the disadvantaged. Our current system of Dollarocracy places power in money rather than in the hands of the people. It is essentially the uniquely U.S. version of plutocracy. This is highlighted by the fact that many members of Congress rely on fundraising in order to pass their bills through Congress (3). McChesney notes that the life of a congressman after his term in office led to lobbying only 3% of the time in the 1970s whereas in 2012 that figure has risen to 50%. By placing so much of an emphasis on money and fundraising, Congress shows that its dependence on corporate funding and how it is already deeply integrated into the political system. Another indicator of this emphasis on wealth and the control of the private sector is the amount of capital held by banks today. Back in 1995, only 17 years ago, the largest six banks held assets equivalent to 17% of the GDP. By 2006 this figure skyrocketed to 55% and in 2010 it reached 64% (3). These changes show the increased dependence on the banking system and the amount of power the banks now have in dealing with financial matters. As the gap between the average American and the very rich, or even the rich and very rich, grows larger, those at the top are tending to pull away in interest from the majority of Americans. As such, the interests of Americans have little to no effect against the powerful corporate lobbies (4). When there are more inequalities in wealth, the rich become more detached from society since they no longer need to rely on the government for education, healthcare, or personal security. As a result, they become more detached from the rest of society and lose whatever sympathy they might have had. Nearly all economic gains have gone to the very rich. If the proportions of wealth had stayed the same as in the 1960s, the gap between the rich and the poor would not be as drastic as

it is today (5). Throughout the recent recession, those in the top 1% were able to retain their income despite the economic crisis. This had largely to do with the taxation practices for those in the top percentiles. Back in 1961, those making over $1 million were taxed at a rate of 43.1% whereas today that rate has dropped to around 23.1% (6). Similarly the amount that corporations were taxed fell steeply from 47.4% in 1961 to 11.1% today. Even Warren Buffet, one of the top richest men in the world, criticized this system in which he was paying a lower income tax rate than his employees. Though it is evident that there have been many changes in the way policy has shaped government in the last 30-40 years, what were the driving factors of this change? Starting in the 1970s there was a shift towards a more Keynesian view which held that high wages and full employment stood in the way of profitability for corporations (10). The new Dollarocracy relates to this shift in policy towards encouraging economic growth through the support of large corporations. Although Democrats have been heralded as the force to prevent big business from continuing to ravage the political landscape, they have not really made any effective movements to change the current system. McChesney calls the Democratic Party willing collaborators. The effects of this Dollarocracy can be seen throughout our political system. Any type of increased wealth of our nation since the 1960s has gone almost exclusively to the wealthy (12). This is especially significant because this is the time period when women were entering the work force in larger numbers and workers were beginning to work longer hours. With these increases in the numbers in the workforce as well as the extra hours put into working, it is even more evident that the wealthy have begun to pull away from the rest of Americans at an alarming rate. Another effect of the Dollarocracy is the invalidation of environmental issues. The interests of large corporations outweigh the popular interest for the common good in the

protection and restoration of the environment (16). The current system does not provide a longterm view of the future but rather focuses on short-term gains to maximize profitability in the near future. This ensures that the very rich will continue to get richer, but ignores the plea of the common man. Additionally, the civil liberties of Americans are greatly affected by these practices as the rich and powerful receive special treatment under these polices. Powerful investors or government officials often do not need to face any prosecution or consequences based on their actions due solely to their economic affluence (18). However at the same time, the poor are being arrested in ever increasing numbers. Like Winner-Take-Al Politics, McChesney also demonstrates the problems we face with our current two-party political system. By having only two very large parties, it is nearly impossible for any new third part to insert itself into American politics and become successful (21). This also narrows the options of Americans in choosing the party which they feel most closely aligns with their political beliefs. This problem has been further compounded because large corporations have been trying to lessen involvement in public voting to have their policies slide through unopposed. With the lower numbers of voters, those who do vote tend to be richer, so it stands that corporations would want as few people as possible to vote in order to ensure that the current system is maintained. McChesney does note that if voter turnout exceeded 80% of the population, then the Democratic presidents would have won very decisive victories over the past elections (23). In The Crisis, Tabb also shares some similar opinions about the economic inequality and his view of the top 1 percent. While he acknowledges that the Republicans are the driving force behind this inequality and the continuation of supportive legislation, he notes that the Democrats have not been trying to stop this trend and even go along with it; if the Republicans are

cheerleaders for the 1 percent, most Democrats are quiet collaborators (15). This sets up his position because it shows that it is a universal problem with the American political system as a whole and not just the Republican Party alone. A lot of this action of the Democrats is through their support of the campaign machine. Both parties are dependent on funding from the top 1 percent in order to run their campaigns (15). Again, it is nearly impossible for someone to be successful in a political race if he does not have a large financial backing either from himself or from other investors. This ensures that the legislation that is favorable to these funders is pushed through in order to continue the system of favor. Tabb also talks about the highest among the wealthy having a disproportionate amount of control over how government is run. He says that the top one-one-thousandth of the top 1 percent are comprised of billionaires who decide who the viable candidates are and which pieces of legislation they want pushed through (15). Over 97 million, or roughly a third of the U.S. population, is considered to be in a low-income category (17). This means that their income is at or below twice the income at the given poverty line. Of this are included retirement-aged workers and recently graduated college students. College students today face an average debt of $25,000 right after leaving college. This places them at an inherent economic disadvantage even before they have begun to work. As a result, many graduates have moved back home in order to save money or obtained a job that does not even require a college degree. Seeing as college graduates are the coming future of America, it is a grave problem when the majority of them are already hindered economically before even entering the workforce. Another group in this low-income category are retirement-aged workers.

These individuals continue to work as to push back retirement because they are unable to afford retirement due to insufficient income. Throughout all of these economic and policy changes, it is clear that the salaries of the working class have not been expanding at the same rate as the wealthy. In fact, between 1973 and 2006 true wages only grew by 1% whereas productivity increased by 80% (17). These extra profits have been absorbed by the big corporations to increase their own profitability. Also Tabb notes that the rich do not pay as much in taxes as they did in the postwar period (18). He draws comparisons between the current situation and the Great Depression but notes that there are some stark differences. Primarily he notes that in the 1930s everyone suffered as a result of the Great Depression. However today, it appears that the wealthy have not only been very unaffected by this matter, but also have seen increases in income and wealth. Wall Street was bailed out during the recent recession while profits and bonuses increased. It is interesting to note how public opinion has changed in recent years regarding our countrys system of free market capitalism. Back in 2002 80% of Americans saw free market capitalism as the best system while in 2009 that number had dropped to 59% (21). This rapid shift in public opinion shows that our current system of economic policy needs improvement and this trend would possibly continue. Tabb suggests merely that in order to solve this problem, we must either cut spending or raise taxes (19). Still, just doing this is not merely enough to fix the system in which we are in; in order to do any real damage, we must examine how to fix a failing system. In this sense all three works are in agreement; the current problems have not arisen due to abuse within a sound system, but rather due to the system itself.

Works Cited Hacker, Jacob S., and Paul Pierson. Winner-take-all Politics: How Washington Made the Rich Richer-and Turned Its Back On the Middle Class. 1st Simon & Schuster hardcover ed. New York: Simon & Schuster, 2010. McChesney, Robert W. "This Isn't what Democracy Looks Like." Monthly Review 64.6 (2012): 1-28. ProQuest Central. Web. 6 Dec. 2012. Tabb, William K. "The Crisis: A View from Occupied America." Monthly Review 64.4 (2012): 15-21. ProQuest Central. Web. 6 Dec. 2012.