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The mainstream German Magazine Spiegel asks, has the US mixed Economy turned into an Oligarchy?

by Democrats Ramshield
Thu May 10th, 2012 at 05:26:11 PM EST

Author's preface:
Written by an American expat living in the E.U. (who holds an M.B.A. degree). This diary is a review of the Spiegel article entitled "Has America Become an Oligarchy?" written from the perspective of a business librarian.  
 My email is: democratsramshield@yahoo.com

------------------------

Spiegel quote: 2002 and 2007, 65 percent of the income gains went to the top 1%

"Spiegel quote: Indeed, if you look at the reports it compiles on every country in the world, even the CIA has concluded that wealth disparity is greater in the US than in Tunisia or Egypt."

Late last year this mainstream German news outlet asked, has America become an Oligarchy?Has America stopped being a mixed economy?

Spiegel quote: "A generation ago, the United States was a recognizable, if somewhat more unequal, member of the cluster of affluent democracies known as mixed economies, where fast growth was widely shared. No more. Since around 1980, we have drifted away from that mixed-economy cluster, and traveled a considerable distance toward another: the capitalist oligarchies, like Brazil, Mexico...

 Clearly, the subject matter presented by the article asking if America has turned into a Oligarchy is not news to American elites, who in fact not only know all about it already, but the truth be known simply put they like it that way. The Spiegel article which may be shocking to the sensibilities of the American plutocrat owned media correctly portrays an American society which has become essentially speaking depoliticized, wherein elections have become by way of sophistry a meaningless public relations extravaganza that has been bought by private capital in support of a legalized robber baron system of theft.  


Spiegel quote:"Experts now say the US has entered a second Gilded Age, but one in which hedge fund managers have replaced oil barons -- and are killing the American dream.....

As such the American working class voters have become frustrated and atomized in their anger, wherein millions don't know the way out and no longer know how to react. We see the American Occupy movement is referred to in the Spiegel article as a real grassroots effort by the American working class in a first real attempt to organize to resist the assault on the American working class, which is something that hasn't happened in America since the 1970s. Clearly the Occupy movement has a long way to go, yet the Occupy movement offers real hope for peaceful, non-violent change in the American body politic. Clearly the so-called "flexible American labor force" is considered by my fellow MBAs and by economists to be a wonderful thing, clearly they consider the modus operandi of a flexible labor force to be a marvelous way to control and crush labor while concurrently increasing the power and wealth of the American ruling class in what must be seen as a pure act of economic aggression in the GOP-led class warfare against the American working class.

By way of history though it is not mentioned in the Spiegel article, this reviewer offers the history of the temple's former high priest, Mr Alan Greenspan who as 'Saint Alan' was worshiped by my fellow MBAs and economists alike, wherein Saint Alan testified to Congress of his outstanding success in managing and growing worker insecurity, so as it keep people afraid and complacent  to the point where in America (as demonstrated by the OECD chart below), we see that America is rated dead last in the world compared to other major industrialized nations and it is this international badge of shame that must be hung around the neck of Saint Alan and his worshipers, all of whom prostrate themselves in front of the idol at the altar of unbridled avarice, who wear said idol as the mark of an American pariah state, who have legalized a system of theft and oppression, whose wealth is built on worker insecurity, exploitation and whose youth after graduating from college are forced to live back home in the basements of their parents underwater mortgages, where they themselves are left to drown in student loan debt.

 

For example, the average income for securities traders has steadily climbed to $360,000 a year.......

Still, that's nothing compared to the trend in executives' salaries. In 1980, American CEOs earned 42 times more than the average employee. Today, that figure has skyrocketed to more than 300 times. Last year, 25 of the country's highest-paid CEOs earned more than their companies paid in taxes........

By way of comparison, top executives at the 30 blue-chip companies making up Germany's DAX stock market index rarely earn over 100 times the salaries of their low-level employees, and that figure is often around 30 or 40 times."

It is from this reality that the mainstream European media as demonstrated by the Spiegel with righteous indignation launches its diatribe asking, has America become an Oligarchy? Though not stated in the article its clear to its European readers that this article is written from a perspective where unlike in America, everyone has medical coverage whereas in America there are 59 million medically uninsured Americans, 132 million Americans who don't have dental insurance, 45 million Americans who are left on food stamps.

Is social/economic mobility in America dead?

Spiegel quote: But studies show that increasing inequality and political control concentrated in the hands of the wealthy elite have drastically reduced economic mobility and that the US has long since fallen far behind Europe on this issue. Indeed, only 4 percent of less-well-off Americans ever successfully make the leap into the upper-middle class.

Unlike in the United States, university education in continental Europe is almost completely free of charge, wherein most American students pay more in textbooks per year than continental Europeans pay in tuition. Workers are required by law in the European Union to receive 4 weeks of paid vacation and are entitled to paid sick leave and paid maternity leave, whereas in America the labor laws for employers are not required to provide any paid sick leave or paid maternity leave.

Is 2012 America's New Gilded Age?

Spiegel quote:Economists and political scientists believe the US has entered a new Gilded Age, a period of systematic inequality dominated by a new class of super-rich. The only difference is that, this time around, the super-rich are hedge fund managers and financial magnates instead of oil and rail barons."

In the United States, American workers find themselves unable, indeed too afraid to use their meager 10 day (or 2 weeks) of paid annual leave. Their worker insecurity is such they feel to do so would risk losing their jobs and cause them to fall in the unemployment line in a clear posture, where US unemployed workers usually lose their medical insurance. Unlike their counterparts in Europe everyone is medically insured (from cradle-to-grave) even the unemployed and their families as a basic human right. But then nobody is accusing the European Union of being an Oligarchy and during this 2012 election it's worth remembering: Europe is still moving further to the left as we see in the expression of the French election which has just elected a Socialist government so as to provide even greater protection for working class people.  

Spiegel quote:"Writer Mark Twain coined the phrase "the Gilded Age" to describe that period of rapid growth, a time when the dazzling exterior of American life actually concealed mass unemployment, poverty and a society ripped in two .............

Considering the plight of America's nouveau poor, please feel invited to give a close read to the graph below.

Spiegel quote:"This is part of a development, they argue, that has been under way for years but remained largely hidden in the years of cheap credit, rising real estate prices and excessive consumption -- when it seemed everyone was on the way up. And the problems only came to light with the arrival of the financial crisis."

"Inequality in America is greater than it has been in almost a century. Those fortunate enough to belong to the 1 percent, made up of the super-rich, stand on one side of the divide; the remaining 99 percent on the other. Even for a country that has always accepted opposite extremes as part of its identity, the chasm has simply grown too vast.""Still, statistics indicate that the growing disparity is genuinely overwhelming.

In fact, the 400 wealthiest Americans now own more than the "lower" 150 million Americans put together."

Spiegel quote:....today's financial and economic system makes it impossible for individuals' self-serving behavior to ultimately contribute to the prosperity of society as a whole, as Smith had envisioned it. Instead, it leads to an economy in which only the fittest survive -- and the general public is left behind.

To read the full Spiegel article please click on the link below! Thanks.
http://www.spiegel.de/international/spiegel/0,1518,793896,00.html
--------------------------------

THIS MARKS THE END OF THE REVIEW AND THE BEGINNING OF THE AUTHOR'S CONCLUDING COMMENTS.

In terms of social mobility did you know that 96 percent of working class Americans
fail to make it in to the upper middle class? Doesn't that give new meaning to the words only in America? As American social mobility has long since fallen behind Europe!!
Is this why there are over 5 million American expats in the world today, whereupon Michele Bachmann former GOP Presidential candidate wants to be one of them to flee the sinking ship! As such the American economy has taken on a Kafkaesque flair.


If European socialism is such a bad thing, why did former GOP presidential candidate Michele Bachmann just become a Swiss citizen in March 2012?

If you have any doubt as to the hypocrisy involved in the GOP led class warfare, please read the quote below where former Presidential candidate Michele Bachmann is reported by Politico as having taken on dual citizenship, in that she has become a Swiss national. To be clear Switzerland historically has been one of the leading nations in the great social democracies of Western Europe, whereupon it becomes clear that Michele Bachmann is quite happy to garner for herself security of being a Swiss citizen in one of Europe's oldest social democracies, while concurrently in her platform as a  Presidential candidate was quite happy to deny Americans the very benefits that Michele Bachmann has now secured for herself and her family, having acquired Swiss citizenship. At which point we must quite honestly conclude that there is no end to the hypocrisy in the GOP led class warfare against the great American working class.    

Arthur Honegger, a reporter for public broadcaster Schweizer Fernsehen, told POLITICO the Swiss consulate in Chicago has confirmed that the former Republican presidential candidate became a citizen March 19.
http://www.politico.com/news/stories/0512/76072.html

Franz Kafka was a Austro-Hungarian author whose name transcends literature.  The term Kafkaesque has come to be known (in the context of the above quote) as being incomprehensibly bizarre. The tattered American social safety net is seen as a crime of moral turpitude against vulnerable working class families being thrown to the wolves in the GOP-led class warfare against the American working class. As this Kafkaesque odyssey continues, the numbers of the Nouveau poor are being swelled by working Americans many of whom have advanced degrees, many of whom have come to rely on food stamps in order to keep food on the table.

Working class Americans from every background are made to feel the pain inflicted on us by the plutocracy. No one is safe anymore.

To win in America all we have to do is to care about each other and stick together!
If we are looking for change we must look to the Occupy movement to provide that peaceful nonviolent approach to change in helping to elect better progressive politicians to public office. The Occupy movement and the American unions are the last great hope of the American working class dream!!

(Cross-posted by author from the Daily Kos.)

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... you might discover that the "assault gun of democracy" is in quite low regard around here.

As, for that matter, is saying modestly nice things about Germany and its political system.

by cris0 on Thu May 10th, 2012 at 07:51:30 PM EST
Oh, the proportional electtoral system and the federalism are excellent.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2012 at 04:58:27 AM EST
[ Parent ]
I live in a very poor region of a wealthy state in the USA. For every $2 dollars in federal taxes we pay in this poor region, only $1 dollar returns to us in funding. The money goes to states in the south who receive $2 for every $1 in taxes they pay. This is as it should be, but before we hear of cultural unity and the nation, realize that the populace of this poor region has a lot more in common with, say, Canadians and Canadian culture than it does with the people and the culture that live 1,600 kilometers to the south, the very people who receive our taxes. No one bats an eyelash or complains at this. I haven't heard or read of a single complaint.
by Upstate NY on Fri May 11th, 2012 at 11:41:30 AM EST
[ Parent ]
I wonder if the average citizen is even actually aware of that fact.


'tis strange I should be old and neither wise nor valiant. From "The Maid's Tragedy" by Beaumont & Fletcher
by Wife of Bath (kareninaustin at g mail dot com) on Fri May 11th, 2012 at 02:02:51 PM EST
[ Parent ]
I believe a great many are. It is brought up when we mention red states versus blue states. The blue states are the ones with higher social spending and they vote Democratic. They are the surplus states. The low tax states receive more government funding and they vote Republican. It's a similar dynamic to Europe. Low investment, low taxes, more imports, are more conservative than states with high taxes, high investment and social services, which are also the richer states.
by Upstate NY on Sat May 12th, 2012 at 12:05:58 AM EST
[ Parent ]
Why is this so?

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Sat May 12th, 2012 at 02:29:52 PM EST
[ Parent ]
Part of it has to do with demographics and settlement patterns: The poorer states are less urbanized, and therefore their economies are less efficient.

Another part has to do with the fact that high taxes discourages looting, and high social and economic safety nets encourage investment (which increases productivity) by reducing uncertainty.

Or, bluntly put, left-wing economics works, when it is put to the test. Right-wing economics fails, when it is put to the test. Every. Single. Time.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 12th, 2012 at 04:52:09 PM EST
[ Parent ]
It's also easy to see this dynamic in action. North Carolina was a solid red state for a generations, a bit poor, but they had several top notch universities clustered near one another. Those schools spawned small tech startups. The state began to invest more. Soon, it became more urbanized and started attracting people from the blue northeastern states. Businesses began flocking there. It became one of the big economic engines of the south.

Then, to everyone's shock, it broke with the south and voted for Obama.

by Upstate NY on Sat May 12th, 2012 at 06:15:31 PM EST
[ Parent ]
And then last week, to everyone's shock, it broke with Obama and approved a constitutional amendment banning gay marriage.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Sat May 12th, 2012 at 06:32:21 PM EST
[ Parent ]
That's the old North Carolina for ya.
by Upstate NY on Sat May 12th, 2012 at 11:14:15 PM EST
[ Parent ]
Just following California's lead there.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Sun May 13th, 2012 at 03:56:36 AM EST
[ Parent ]
California confuses itself with the number of voices in its head.  Call it Legion.
by rifek on Tue May 15th, 2012 at 05:50:03 PM EST
[ Parent ]
Interesting comments/reasoning.  I'll have to think about this. I was initially considering the deeper historical reasons behind this phenomenon particularly as it pertains to the South.  Jakes's "demographics and settlement patterns" I believe point in the right direction as well of course as tax rates and social safety nets.  The comparisons with NC and also California are also pertinent. I've never seen California as firmly committed to progressive policies. Money or the lack thereof seems to be an ever important factor.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Mon May 14th, 2012 at 10:44:23 AM EST
[ Parent ]
the Germania of Tacitus is here relevant. He used a somewhat idealized picture of the nobel savages in the north to critize the roman society:

http://en.wikipedia.org/wiki/Germania_(book)

The work can appear moralizing at points, perhaps implicitly comparing the values of Germanic tribes and those of his Roman contemporaries, although any direct comparison between Rome and Germania is not explicitly presented in the text. In writing the work, Tacitus might have wanted to stress the dangers that the Germanic tribes posed to the Empire.

>Tacitus' descriptions of the Germanic character are at times favorable in contrast to the opinions of the Romans of his day. He holds the strict monogamy and chastity of Germanic marriage customs worthy of the highest praise, in contrast to what he saw as the vice and immorality rampant in Roman society of his day (ch. 18), and he admires their open hospitality, their simplicity, and their bravery in battle. All of these traits were highlighted perhaps because of their similarity to idealized Roman virtues. One should not, however, think that Tacitus' portrayal of Germanic customs is entirely favorable; he notes a tendency in the Germanic people for what he saw as their habitual drunkenness, laziness, and barbarism, among other traits.>

And likewisethe autor of this blog post uses a somewhat idealized description of modern Germany to preach virtues to the US. He has posted quite some of them over at Daily Kos.

by IM on Fri May 11th, 2012 at 05:11:00 AM EST
[ Parent ]
Cris, you should mention that "Sturmgeschütz der Demokratie" is a prehistoric moniker of the Former News Magazine. There are under 50 year olds around who wouldn't know that.
by Katrin on Fri May 11th, 2012 at 06:53:41 AM EST
[ Parent ]
And over 50 year olds too! thank you for the clarification.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri May 11th, 2012 at 07:53:35 AM EST
[ Parent ]
We're a kleptocratic oligopoly.  The financial lords don't really care who's in DC because whoever it is works for the financial lords.  They fain anger at "government intrusion" every now and then as part of the set of red herrings they feed the populist rage to keep it directed away from them, but it's just a show.
by rifek on Fri May 11th, 2012 at 01:39:24 PM EST
By the way, Kafka was neither Austrian nor Hungarian. He was a Czech Jew who spoke mainly German and Yiddish. Wrote in German. Also, Kafkaesque is not equivalent to incomprehensibly bizarre. Rather, it's about paranoia and absurdity.
by Upstate NY on Sat May 12th, 2012 at 12:11:24 AM EST
Kafka was as far as I can tell born in Prague, the main city in the predominantly Czech-speaking part of Austria in Austria-Hungary. Jews being emancipated in Austria, and the parents being German-speaking and living in the Austrian part, I would assume that Kafka was born an Austrian citizen.

The Czechoslovak republic he lived in the the last years of his life did not believe in the existence of Czechs, only Czechoslovaks. But he was probably considered a Jew and a citizen of Czechoslovakia by that government anyway.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Thu May 17th, 2012 at 10:11:13 AM EST
[ Parent ]
I'm confused by this diary.  Though I love the way this line evokes the horrors of Katrina,

whose youth after graduating from college are forced to live back home in the basements of their parents underwater mortgages, where they themselves are left to drown in student loan debt.

I'm just not sure who is writing this, who it's written for and what its purpose is.   Is the diary writer simply presenting a summary of a der speigel article for the benefit of eurotrib readers?  Or is there a bigger agenda?  Just not clear what that is.  

The last paragraph makes it seem that the point is to urge readers to support Occupy Wall Street and "American unions," but, I don't know what is meant by "the American working class dream."   I am an American and a member of a union, and I've never heard anyone talk about such a thing.

Nevertheless, I'm inclined to agree that we are living under a kind of "oligarchy," though I usually push my students to think a little harder when they say that.  I teach at a community college, and many of my students have no idea what is meant by "oligarchy"  unti they encounter the term it in my class.

I wonder what it means that at this moment, the German magazine and the writer of this diary want readers to consider that the US is perhaps turning into an oligarchy, and to wonder about how that is similar to the so-called Gilded Age days (of approximately 130 years ago) which in some sense sparked all kinds of Progressive reform efforts.  It seems to me that the Gilded Age reference makes more sense in a global context than it does in a US specific context, but things do seem to be changing and not for the better, so who knows.  The US may be heading in a direction that some call "third world" which implies a mass of really poor people and a small group of corrupt and extravagant people at the top, but I think the mass of really poor people who are supporting the richest in the US, are the same poor people who are supporting the richest in the rest of the world.   And I do think there is a sense that the workers here are being pushed to join the global poor, accept less in terms of wages and benefits, and quietly accept the situation and the shenanigans of a company like JP Morgan who can lose $2 billion, and the idea that such a loss is not really a big deal for them (!!?).  (See Washington Post front page today)

by jjellin on Sat May 12th, 2012 at 09:25:11 AM EST
I wonder what it means that at this moment, the German magazine and the writer of this diary want readers to consider that the US is perhaps turning into an oligarchy,

In the Spiggle's case, it's pretty blatantly an attempt to divert attention from the devastation caused in Europe by Germany's deeply dysfunctional economic policies, by pointing out the (true) fact that the US is worse.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 12th, 2012 at 05:20:52 PM EST
[ Parent ]
I'm a little confused by this:

"96 percent of working class Americans
fail to make it in to the upper middle class"

What percentage are presumed to be entitled that status?

How about a pie chart?

Align culture with our nature.

by ormondotvos (ormond no spam lmi net no spam) on Wed May 16th, 2012 at 09:19:52 PM EST
[ Parent ]
ormondotvos:
What percentage are presumed to be entitled that status?

100%, according to free-market social mobility mythology twinned with American "land of the free" exceptionalism.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu May 17th, 2012 at 03:04:56 AM EST
[ Parent ]
we could be seeing the beginning of speciation. In order to get sub-species forming you need to stop gene flow and I can imagine the ultrawealthy wanting their kids to mate only with those of their social class, regardless of ethnicity. That assumes that they have the resources and will to fend off the masses when the food/water runs out.

You don't get new species without cracking some eggs.

Define yourself. Prove yourself. Leave. No loitering.

by THE Twank (yatta blah blah @ blah.com) on Sat May 12th, 2012 at 06:57:33 PM EST
Same as it ever has been. The pharaos married their siblings to keep the blood (or whatever) pure.

Only visible result so far is a couple of lines leaving the gene-pool as a result of infertility from lots of inbreeding. Hasn't stopped the nobility from time and again claiming that their better looks (if the nobility looks different then the rest, the nobility per definition looks better) are a result of nature not nurture.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sun May 13th, 2012 at 04:43:37 PM EST
[ Parent ]
When speaking on the way the USA are going, I use to point at http://stateofworkingamerica.org/who-gains/#/?start=1971&end=2008 to visualize how the share is going there. (you can play with the sliders to see how it went in other time segments.)

res humą m'és alič
by Antoni Jaume on Sun May 13th, 2012 at 07:10:07 AM EST
The gist of the article in boringly correct. What's missing is the analysis of why the masses are accepting this split. I think it's because the middle classes are still moralistic about wages, and accept that "they've lived so well so long" and that they can survive on a lower income (which doesn't automatically mean a lower standard of living.)

The oligarchic ones have taken the evolutionary step of suppressing that work ethic (epigenetic comments, anyone?) and they live happy lives laying out the floor plans on their yachts.

The anger of the middle class is that the rich aren't donating their share to the common pool.

If you're going to mention Kafka, then get serious and ask "Why does all this matter anyway?"

But then you'd be admitting to mooting.

Align culture with our nature.

by ormondotvos (ormond no spam lmi net no spam) on Wed May 16th, 2012 at 09:26:19 PM EST


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