America’s Billionaires’ Coup Part II

[Modern School]

Yesterday, in America’s Billionaires’ Coup Part I, I examined an article in Der Spiegel, claiming that the U.S. was becoming a banana republic and that it should no longer be considered part of the West. Today I examine an article by George Monbiot, in the Guardian, UK, on the billionaire’s coup in the U.S.

While Monbiot’s piece makes a much better analysis than the one in Der Spiegel, it suffers from the same faulty premise that things today are substantively different than they were in a romanticized past. A coup implies an illegal or extrajudicial takeover of the state, which is not at all what has happened. The wealthy have (as they always have) used their wealth and power to influence policy in their favor. While there are a few billionaire politicians, most are mere millionaires and humble one-hundred-thousandaires.

Regardless, all three classes of individuals are members of the same ruling class. They are bosses, bankers, financiers, corporate attorneys and entrepreneurs. They share the same interests and they rule to protect those interests. What is different today is that they have become more aggressive and overt in their attacks on the rest of us than they have in several generations.

You can read an excerpt from Monbiot’s article below. My commentaries are in parentheses below each of his.

Anger, Deceit and a Billionaires’ Coup
By George Monbiot/ Guardian UK (Britain) / August 2, 2011 http://readersupportednews.org/opinion2/277-75/6861-focus-anger-deceit-and-a-billionaires-coup

Anger and deceit has led the US into a billionaires’ coup. The debt deal will hurt the poorest Americans, convinced by Fox and the Tea Party to act against their own welfare.



(True—the deal will hurt the poor the most and Americans have been convinced to act against their own welfare. However, there has not been a coup. American politics is functioning the way it always has—as an instrument of capital.)

There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich.

(A point of clarification: Income taxes theoretically harm the wealthy more than the rest of us as they have higher incomes and more money to lose. However, relative to overall wealth, they can also afford to lose much more and still come out on top. Furthermore, the marginal tax rate is at its lowest level in decades, with the result that the wealthy get to keep much more of their bloated incomes than they have in the past. In the 1930s, the marginal rate was 64%. From 1940 until 1963 it ranged from 80-92% and never dropped below 50% until 1986, during Reagan’s second term. Nevertheless, the wealthy believe they shouldn’t have to pay any taxes. Emboldened by Reagan and then George W. Bush, they have been screaming and hollering for greater and greater tax cuts. And they have received these cuts in numerous forms, including cuts to the other taxes that primarily affect the rich (e.g., corporate taxes, capital gains taxes and inheritance taxes). The corporate taxe rate, for example, has declined from 52%, in 1952, to 35% today, and most companies pay much less after taking advantage of loopholes. GE, for example, only paid 7.4% last year. Capital gains and inheritance tax rates are also at historical lows.)

(Government spending benefits the rich and the poor. Spending on the military and on subsidies to oil companies, Big Pharma and Big Ag all benefit the wealthy and amount to transfers of wealth from the working and middle classes to CEOs. The rich by and large support this kind of spending and never refer to it with disparaging terms like “entitlements,” which is reserved for spending that has little or no benefit to them at all (e.g., education, Medicare, social security).)

TO read the entire article and commentary, please go to http://modeducation.blogspot.com/2011/08/americas-billionaires-coup-part-ii.html