The One Percent

The One Percent

Yesterday, I watched a documentary called "The One percent" by Jamie Jonson", it opened my eyes on the reality of the one percent. I knew about the .01%, but I had no idea how many super wealthy individuals there were in the USA until I listened to that documentary, released in 2006, but evidently filmed over a period of time starting sometime in the 1990's.

https://www.youtube.com/watch?feature=player_detailpage&v=9Av_GHJIqWQ

Around the same time I found this study:
"Democracy and the Policy Preferences of wealthy Americans":
http://faculty.wcas.northwestern.edu/~jnd260/cab/CAB2012%20-%20Page1.pdf

I was struck by the dissonance between national politics and the desires of ordinary Americans until I saw these both in tandem. I'd always figured when they were talking about the "One Percent" they were talking in code and really talking about the .1% or maybe the .001%, but the study and the documentary together made me realize there is really a "one percent" as a class of people, who have legacy wealth from having had wealthy parents, grandparents, or great-grandparents (or further back) and who have inherited wealth. These people won't show up on income tax as wealthy because much of their wealth is hidden, in trusts, and in the form of capital investments. I knew the wealthy paid capital gains, and I knew there were a lot of them. I didn't realize there were so many. One percent may not be a lot of people, but when one considers income distribution and the fact that So Much! wealth is concentrated with them, a lot of things become clearer once one understands that they exist. The intro notes on page 5:

"Data from our recently completed SESA pilot study indicate that the top 1% or so of U.S. wealth - holders differ rather sharply from the American public over a number of important policies concerning taxation, economic regulation, and especially social welfare programs. The more rarified, top 1/10th of 1% or so of wealth-holders (people with $40 million or more in net worth) appear on the average to hold still more conservative views – views that are even more distinct from those of the general public."

But it gets more interesting as one examines those views.

The author notes:

"It is extremely difficult to interview a representative sample of wealthy Americans. (For more detail on the inherent difficulties and on our efforts to solve them, see Page, Bartels and Seawright 2011.) The hardest problem involves identifying the wealthy....

This directly parrallels the experience of Jamie Jonson, who regularly faced opposition just in getting his family members and fellow wealthy friends to even talk to him. It is pretty obvious that the wealthy in the USA lay low and don't want to be identified as a class, or for people to know what they are up to or that they have so much unearned wealth.

Thus we don't even see their imprint on our politics, and I certainly missed it. But then reading this document a lot became clear. On page 4 the author notes:

"Gilens (2012) has found that relatively affluent Americans tend to be more liberal than others on religious and moral issues, including abortion, gay rights, and prayer in school, but much more conservative than the non-affluent on issues of taxes, economic regulation, and social welfare."

And since we find the one percent in politics donating on both sides of the aisle, we can see why we seem to make more progress in subjects such as gay rights and such, but make less progress on bread and butter issues such as workplace democracy, minimum wage, getting unemployment down, etc.... Considering the massive clout of the wealthy, it becomes pretty obvious why "liberals" nowadays aren't reliable for labor. But the wealthy are one thing, the super wealthy tend to be more conservative than the wealthy; on all issues. And they are very wealthy:

"Most of our respondents fall into or near the top 1% of U.S. wealth-holders.11 Their average (mean) wealth is $14,006,338; the median is $7,500,000. (For the distribution of respondents by wealth category, see Table A.) To give a further idea of their economic standing: respondents’ average income is $1,040,140. About one third of them (32.4%) report incomes of $1,000,000 or more."[page 7]

But it is obvious from the study that their agenda drives the Tea Party, and is also why the Democrats go along with it:

"As Table 1 indicates, fully 87% of our wealthy respondents said that budget deficits are a “very important” problem facing the United States. Only 10% said “somewhat important,” and a bare 4% said “not very important at all.”

So while workers and the unemployed may see unemployment and poverty as an issue, these mokes see "deficits." And while the more liberal ones might agree with the general public on their importance to the country, their relative importance is graded much differently from the rest of us:

"Nearly as many of our respondents (84% and 79%, respectively) called unemployment and education “very important” problems. However, each of these problems was mentioned as the most important by only 11%, making them a distant second to budget deficits among the concerns of wealthy Americans."[Page 9]

So they sound like the Democrats, who claim to care about unemployment or infrastructure improvements, but seem to always cave to Republicans on the subject. Once one understands that many democrats are either part of the one percent themselves (Nancy Pelosi is a nice lady, but she's a member of a wealthy family), or they are under the influence of their donors, who often control Democrats using the same kind of financial dog leashes that control the Republicans.

"Our wealthy respondents’ focus on deficits, then, is not widely shared by the general American public. As we will see, there are also major disagreements between the wealthy and other Americans about how to address this and other problems. To deal with deficits, the wealthy tend to favor spending cuts rather than tax increases, to a greater extent than the public does. To deal with unemployment and economic stagnation, the wealthy – much more than the public – tend to rely on private enterprise and oppose governmental jobs or income maintenance programs. To deal with education problems, the wealthy are somewhat more favorable toward market-based reforms and less supportive of spending on public schools."

And so, we can see the tremendous influence that even "liberal" rich from the one percent exercise on our politics, and how it is at variance with the needs and priorities of 99% of us. Recently even Ralph Nader seemed to give up on fighting entrenched powers and instead appealed to them for succor. We seem to be losing the war against poverty while following the other road to Serfdom that Hayek outlined as economic policy [While posing as arguing that government would make people serfs through central planning].

Next Blog on this subject: http://holtesthoughts.blogspot.com/2013/04/the-massive-corruption-behind-our.html talks about recent revelations of it's scale and depravity

References:

http://faculty.wcas.northwestern.edu/~jnd260/cab/CAB2012%20-%20Page1.pdf

https://www.youtube.com/watch?feature=player_detailpage&v=9Av_GHJIqWQ

http://en.wikipedia.org/wiki/The_Road_to_Serfdom

Earlier article on same subject more than 50 years ago by Ferdinand Lundberg:

http://www.amazon.com/Americas-60-Families-Ferdinand-Lundberg/dp/1406751464