Of the rich, by the rich, for the rich

February 1, 2012

No one rises to the top of the U.S. political system without the support of business.

CALL IT the 1 percent election.

They may feign interest in the lives of ordinary people in their drive to win votes--visiting small-town diners and hobnobbing with the "common man"--but the leading contenders for the Republican nomination rake in enough money every year to rank at the very top of the U.S. income ladder.

And it's not just the Republicans--top Democrats, including Barack Obama, may talk more often about economic fairness, but they certainly don't deny themselves the kind of wealth that the vast majority of Americans won't see in a lifetime.

That's because from top to bottom, both parties in Washington are committed to protecting the wealth and power of America's elite few. And why not? The vast majority of them are a part of it.

REPUBLICAN MITT Romney--who took a commanding lead in the Republican presidential primaries with his big win in Florida--can't pretend to have any sense of what ordinary U.S. workers live on. His fortune is somewhere in the range of $250 million.

Romney's household income was $21.7 million in 2010 and $20.9 million in 2011--the overwhelming majority of it not from any actual "work," but from stock dividends and returns on investments. Romney's actual tax rate was just 13.9 percent--thanks to the sweet deal for the super-rich who pay taxes at a much lower rate on income from financial wheeling and dealing. Romney also benefited from squirreling away wealth in a Swiss bank account and millions more in "partnerships" in Cayman Islands tax havens.

Mitt Romney, Newt Gingrich and Barack Obama

In all, Mitt and Ann Romney "earned" over $42 million in the last two years from investments--including thousands of shares of Goldman Sachs, which were sold just before election season began, at a return of more than $1 million.

The banking giant came through for Romney in other ways. According to the New York Times, Goldman employees "have contributed at least $367,000 to his campaign, making the firm Mr. Romney's largest single source of campaign money through the end of September."

In all, Romney made the average U.S. annual income of $42,000 every four hours. After just one week of "work"--if it can be called that--Romney's earnings placed him firmly in the ranks of the 1 percent. No wonder he had the gall to call the $362,000 he earned in speaking fees last year as "not very much."

Desperate to find a way to attack Romney, opponents Newt Gingrich and Rick Perry took shots at Romney for his time as a "corporate buyout specialist" at the financial firm he founded, Bain Capital. Bain is known as a venture capital firm, but the better term is "vulture capital"--such firms specialize in buying out struggling companies, cutting costs with layoffs and plant closures, breaking them up, and selling off the parts at a huge profit.

Such is the insanity of a presidential election season--where what passes for normal business practice any other day can be opportunistically seized upon by Republicans whose entire political ethos revolves around letting capitalism rip, whatever the cost to human beings.

But don't try telling Romney that someone as rich as him can't claim to be in touch with ordinary people.

When confronted outside his campaign headquarters in Charleston, S.C., and asked, "What would you do to support the 99 percent, seeing as how you're part of the 1 percent?" Romney dismissed the questioner as--yes, that's right--un-American. "If you've got a better model, if you think China's better, or Russia's better, or Cuba's better, or North Korea's better, I'm glad to hear all about it, but you know what, America's right, and you are wrong," Romney sneered.

So how did one man get so fabulously wealthy?

We can thank both the Republicans and Democrats, and the bipartisan drive to lower taxes on the rich. Taxes on capital gains from investments and dividends were dramatically lowered during the Clinton administration--thanks to a deal struck between Bill Clinton and then-Speaker of the House Newt Gingrich. Tax breaks for the rich accelerated under George W. Bush--and the Obama administration has failed to roll them back.

Of course, it's not as though any of Romney's competitors for the White House genuinely understand the scramble that ordinary working families go through to make ends meet.

Despite his attacks on Romney for his Swiss bank accounts, Gingrich is also one of the 1 percent. According to Roll Call, the former Speaker of the House has assets worth $7.3 million--not including homes or other non-income-producing property. He receives millions more in income, including $2.5 million from "Gingrich Productions" during 2010, and another $72,000 from his family-run "talent agency."

As Roll Call put it, the former speaker has built a very profitable right-wing empire: "Gingrich's web of enterprises ranging from a health care think tank to a documentary production company generated close to $100 million in revenue over the past decade."

Then, of course, there's the matter of Gingrich's lobbying--or "consulting," as he calls it--for mortgage giant Freddie Mac, for which he was paid $1.8 million over a period of several years.

In Washington, such arrangements are common. Go through the ranks of defeated/retired senators and representatives--from both parties--and it becomes clear that a large number find a "second" career as paid influence peddlers, hired by corporations and business groups precisely because of the special access they can provide for corporations.

This provides a stark lesson about capitalism: An entire class of people does no actual work, but still makes fortunes--and it can buy an entire political class to protect and expand its wealth at the expense of workers and the poor.

DESPITE THEIR claims that they are fighting for working families, top Democrats are firmly entrenched within the 1 percent as well.

Barack and Michelle Obama reported income of $1.73 million in 2010, down from $5.5 million in 2009. The Obamas actually paid taxes of $453,770 on their 2010 income, but that still left them with what can charitably be termed a "comfortable" income of more than $1 million for the year.

Despite the wild claims that Obama is engaged in "class war," big business is still greasing the wheels of Obama's re-election machine. As of September, Obama had raised more than $86 million for his re-election campaign. Top contributors include Microsoft ($171,573) and Comcast ($113,800). Even Goldman Sachs made the list, with donations from Goldman employees and their families totaling more than $50,000.

Obama may have taken a populist stance against income inequality in his State of the Union address, but the truth is that the president stands firmly among the 1 percent as well--and they expect plenty in return for their donations.

As Bill Moyers and Michael Winship wrote in Salon.com:

President Obama may call bankers "fat cats" and stir the rabble against them with populist rhetoric when it serves his interest, but after the fiscal fiasco, he allowed the culprits to escape virtually scot-free. When he's in New York, he dines with them frequently and eagerly accepts their big contributions. Like his predecessors, his administration also has provided them with billions of taxpayer dollars--low-cost money that they used for high-yielding investments to make big profits.

Obama and the Democrats are talking about pushing for the "Buffett Rule"--the idea, named after billionaire Warren Buffett, that those making over $1 million a year should pay at least the tax rate of working people. But don't count on Democrats to press the fight--they've already signaled the issue will be put off until after the election.

The truth is that every presidential election is a "1 percent" election--because the only way to rise that high in the U.S. political ranks is by making sure business backs you. That's why change won't come by voting for this or that candidate, but by embracing the kind of struggle that the Occupy movement has helped galvanize across the U.S.: the fight to end foreclosures, to stop budget cuts, and to demand economic and social justice--and ultimately, the fight for a different society, based not on profit, but on human need.

As socialist leader Eugene Debs said in a speech to the court after being convicted of sedition for opposing the First World War:

I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence.

This order of things cannot always endure. I have registered my protest against it. I recognize the feebleness of my effort, but, fortunately, I am not alone. There are multiplied thousands of others who, like myself, have come to realize that before we may truly enjoy the blessings of civilized life, we must reorganize society upon a mutual and cooperative basis.

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