America’s emerging oligarchs are poised to grab wealth that may dwarf that which their Russian pals grabbed during the 1990s. In a Russia that was re-emerging from the breakup of the Soviet Union, well-connected businessmen told lies to dupe the public as they made deals with unscrupulous politicians to grab state assets, such as oil fields and mines, at a tiny fraction of their market value. They followed this up with access to confidential information to accumulate more wealth and then used this wealth to re-elect their benefactors, Boris Yeltsin and his cronies. This was a monumental grab of wealth and power that has thoroughly compromised the wellbeing of the average Russian and undermined all prospects for democratic governance. Are there now U.S. parallels?
Wealth and income inequality in the U.S. has increased to an unprecedented level. We refrain from repeating well-known figures that are readily available from the heralded work of Professor Emmanuel Saez at Berkeley. Since 1980, nearly all the gain in our GDP, or national output, has benefitted the top 10 percent of our population, with the lion’s share accruing to the top one percent and a disproportionate share of this going to the top 0.1 percent, those with annual incomes above $1.5 million and wealth of over $30 million. How have they done so well since 1980? Under the guise of tax reform and beneficial financial deregulation, Congress changed laws to benefit its financial backers, who in turn continue to increase their financial support of politicians to reap ever-increasing benefits. While Russian oligarchs have been justly labeled corrupt, their American counterparts have achieved their wealth “legally” by supporting lawmakers and promoting their own faction into senior government positions to do their bidding.
In 2017, the United States stands to “legally” do what was illegally done in Russia. The proposed tax reform will transfer unprecedented wealth to those few who have “invested” in lawmakers to do their bidding at the expense of 90 percent of Americans—this “so-called” reform would be the vehicle to firmly enrich American oligarchs even further than their Russian counterparts over the next four to eight years (if the Republicans continue to control Congress and the White House) and at the expense of all Americans. After American oligarchs have grabbed this unprecedented wealth on top of their existing wealth, the average American will never see it again. It cannot be clawed back unless we then adopt a wealth tax ― a highly unlikely development. The time to act is now.
How will this tax break for the super rich be financed? It will be through a repeal of the Affordable Care Act, limiting Medicare and Medicaid benefits, and a further ballooning of the U.S. national debt. The proposed repeal of the ACA will deprive millions of Americans of healthcare and saddle those with pre-existing health conditions with unaffordable premiums. What the repeal of the ACA and reduced benefits from Medicare and Medicaid does not finance will be transferred to our national debt.
Numerous Congressmen and government officials stand in front of cameras and utter bold-faced lies to the American people to advance their agendas. Clearly, the limited funds available for those with pre-existing conditions are insufficient. Clearly, millions will lose their healthcare (we await the Congressional Budget Office’s scoring) but the U.S. House apparently cares little for the sick and deprived and would pass a bill without the benefit of numbers and a true national debate. In the case of Medicare, this is a contract that the U.S. government would breach. Americans have paid into this program with the expectation of assured benefits. Now, as they approach the age of 65, they are faced with reduced benefits. If the government can abrogate such a contract in order to give tax breaks to the rich, what does this say about the sanctity of contracts in a country that prides itself on its observance of the rule of law?
One does not need a Ph.D. in economics to understand the fallout of the proposed healthcare bill and the vast transfer of wealth embodied in the proposed tax reform. It will drive inequality to the zenith. It will deprive millions of Americans of access to affordable healthcare. It will quickly divide the country as never before. And it will undermine democracy in the United States, with the rich firmly in control of Congress, of the White House and, in turn, of the judiciary.
We desperately need a committee of respected men and women who care for the greater good and the survival of the American Experiment to come to the fore, to expose the lies and double talk that Americans encounter at every turn, and to explain the fallouts of these (and other) crucial proposals on healthcare and tax reform.
The great man, Adam Smith, must be turning in his grave as he sees what politicians and selfish businessmen attribute to him—America’s broken capitalist system. He would be shocked at how his thinking has been twisted and corrupted to serve a few. Yes, Adam Smith proposed a market-based system where individuals would benefit society at large by pursuing their own self-interest. But he emphasized that the market system required market participants to have sympathy for others in their dealings in the market, a market with sound regulations and enforcement without which the system would become a jungle. He further saw the importance of equal opportunities for all to develop; and to emphasize this point he saw himself as no more deserving than a man from an underdeveloped country. He was simply lucky to have had better opportunities. Thus he championed the importance of equal opportunities as the indispensable input for human and societal development and progress. All this and much more were stated in what was his preferred book, The Theory of Moral Sentiments, a book that politicians and businessmen have conveniently set aside.
We face unprecedented challenges as a nation—a vast national debt, continuing budget deficits, inadequate health care and educational opportunities, decaying infrastructure, and unprecedented inequalities of wealth and income with millions living in poverty ― coupled with a partisan and paralyzed political system that is unresponsive to national needs and the greater good. We need true public servants to come to the fore ― isolate fact from fiction, explain the backroom dealings of our politicians and their proposals, and propose viable options ― to help unite our divided land and move us forward all together. It’s time to do to others as we would have done to us.