Oligarchy

A Butterfly Flaps Its Wings: From the Powell Memo to the Eastman Memo and January 6th

Published on by Brynne VanHettinga

Part 5 of a 10-part Series:

Big Money and the Corporatocracy Captures the Media

Indeed, whether such extreme inequality is or is not sustainable depends not only on the effectiveness of the repressive apparatus but also, and perhaps primarily, on the apparatus of justification.”

Thomas Piketty, Capital in the Twenty-First Century, (2014)

Gaining a stranglehold on elected representatives, the legislative process, and appointed officials and judges was still not enough. In a democratic system, there is always the danger that the people will tire of working harder for less year after year or otherwise rebel against obscene levels of inequality. Therefore, the elites had to capture the apparatus of intellectual discourse and cultural transmission; i.e., educational institutions and popular media. 

The war on American workers has been going on since the middle 1800s. In the early days, striking workers would sometimes receive sympathetic attention in the press.  The machinery of the U.S. Congress finally responded to the plight of workers when it passed the National Labor Relations Act in 1935. What followed was growth in the American middle class that made it the envy of the world. Although nearly undiscernible at the time, this phenomenon was already starting to wane—guess when?—the middle to late 1970s—as the Powell memo was put into operation.

The full operation of the Powell memo did not become readily measurable until the Reagan Presidency. Reagan launched the first major salvo against labor when he broke the PATCO strike in August 1981. Throughout the 1980s, media coverage of unions grew increasingly negative. The 1980s were also a period where the media and popular culture was promoting a “greed is good” ethos. But, ironically, it was auto workers and teachers—who only wanted to have enough resources to do their jobs and be paid enough to support their families–who were portrayed as greedy (in the bad sense).

Although it had been noted in obscure academic publications and occasional news articles, only around the turn of the 21st century did serious and sustained media attention become focused on the yawning gap of income and wealth inequality. Mainstream economists began to challenge the prevailing “trickle-down” theory of supply side economists, or the notion that allowing a few fat cats to become obscenely wealthy would somehow (??) inure to the benefit of the rest of us. In 1996, the economist Ravi Batra accused his mainstream colleagues of “napping in their ivory towers” for totally missing the “wage blight” that had been afflicting American workers since 1982. Others finally began making a connection between the decline of labor rights and power and increasing inequality.

In 2017, a pair of researchers at the Vienna University School of Economics and Business analyzed how the media framed issues of economic and social inequality “after decades of benign neglect.” How inequality is presented is “not discussed in economics at all, and hardly mentioned in communication studies.” The authors suggest that economic inequality has only recently been “rediscovered,” likely because it has become so extreme—especially in the U.S. They allege that the “interdependencies between economics and the media” exert an important influence over “the contested sphere of preference shaping,” including political opinions.

The scholarship that has examined this issue has found that business and financial news “tends to be framed by pro-market explanations” and rarely, if ever, “question the overarching economic philosophy of free-market capitalism.” Any one of us can conduct our own informal review and easily discern that most stories are framed around the interests of corporations and employer groups. This bias is “further intensified by the growth of public relations, sponsorship, and other subsidized information flows favoring wealth and powerful interests.” 

  • Coverage of poverty is portrayed as a threat to the community, linking the poor to crime, drug and alcohol addiction, reinforcing the trope that the causes of poverty are due to individual faults rather than structural deficiencies.

  • Welfare “reform” is portrayed as something that reduces dependency and fosters self-reliance. Stories seldom cover the “working poor”—the folks who work sometimes two and three jobs and are still unable to make ends meet—because this would not be consistent with the mythology that the poor are lazy and lacking in work ethic.

  • Taxes on wealth—most of which fall on a very small portion of the population—are portrayed as an issue of general concern affecting all Americans. This is tied into meritocratic notions of “deserts,” that individuals should keep what they earn. The stories hardly ever delve into the fact that the very wealthy “earn” most of their income from things like stock options, carried interest, and capital gains rather than the kinds of “work” that most of the rest of us do.

  • In stories about shareholders challenging executive pay, the shareholders are portrayed as “rebels,” although sometimes the executives are shown dining and drinking in luxury. The authors suggest that this “strong conflict frame” ignores wider themes around capitalist structures, austerity, shareholder agency and inequality.

The authors next examine the causes of this bias/neglect. First is the “hegemonic structure” of media ownership, which has become increasingly concentrated (as have many other industries). This concentration has affected both the elite (mainstream) traditional media like newspapers as well as newer online social media platforms.  Added to this are increasing “commercial pressures,” which result in fewer investments in investigative reporting and more sensationalized stories. The authors suggest that information should be “reconceptualized as a public good and not a commodity.”

The authors then address a more controversial issue, which they term “manufacturing consent.” They cite at least one study of stories about tax reform, which found a definite “pro-rich (or pro-corporate) bias” being promoted by “the propaganda function of institutions such as the mass media and advertising industry.” The authors conclude,

“The one-sidedness of sources already came clear in the studies we analyzed….For our topic of economic inequality and redistributional policies, this would presumptively mean that certain ways of talking about economic inequality… [and efforts to remedy it] are disregarded. Marked as unrealistic or utopian, leaving it—once again—to the market, in its wonderful magic, to do the trick, seeing growing inequality only to be explained by meritocracy…”

On one front, the strategy was to simply keep most people’s noses to the grindstone—where they have neither the inclination nor the energy to look up and ask WHY things are the way they are. On a second front was a complete lack of discourse or public consciousness of what was happening to work, wages, tax loopholes for billionaires, corporate welfare, and connection to political power. The third front involved demonizing government—or any form of collective action where working people could assert themselves. The teaching of civics in American classrooms (especially working class and minority classrooms) has been all but abandoned.

The right-wing media ecosystem was more than a platform for the propaganda of billionaires, but fomented divisiveness and distrust that has destroyed any sense of community or solidarity. The very notion of “we the people” was rebranded as “socialism.”  The system is deliberately designed to keep people tired, irritable, broke, and desperate to find a scapegoat. With the help of psychological and social sciences, messages are tailored to induce ever-increasing wants. Other messages are directed at the survival responses of the limbic system, designed to induce fear and rage.  

A Butterfly Flaps Its Wings: From the Powell Memo to the Eastman Memo and January 6th

Published on by Brynne VanHettinga

Part 3 of a 10-part Series:

The Powell Memo Let Loose

“All for ourselves, and nothing for other people, seems in every age of the world, to have been the vile maxim of the masters of mankind.”

Adam Smith, 1776

The wealthy, business elites and the corporatocracy took the advice from Powell’s memo and ran with it. The most obvious strategy was to exert influence in the places of power—where decisions that affect all of us are made. One way was through direct contributions to political candidates. Here in the United States, campaign finance reform (i.e., getting “big money” out of politics) has undergone a cycle of incremental improvements followed by regression. This is due to both the practical need for large amounts of money in order to run for office as well as limits imposed by Constitutional free speech jurisprudence.  Since the disastrous Supreme Court decision in Citizens United v FEC (2010), the amount of money already pouring into political campaigns has grown ever larger. Political committees may now accept unlimited contributions, so long as they do not “coordinate” with a candidate or a party. Although many of the fat cat donors have a political party preference, many of the special interest groups donate large sums to both parties—insuring access and influence regardless of what the people decide about who is elected.

 

Even prior to Citizens United, the Supreme Court eliminated the Millionaires Amendment in the 2008 Davis v FEC decision. The Millionaires amendment had allowed candidates running against an über-wealthy, self-funded opponent to bypass campaign contribution limits. Although the Millionaires Amendment imposed no limit on a wealthy candidate’s ability to spend funds on his own campaign, the Court’s rationale was that the Millionaires Amendment unconstitutionally “penalized” wealthy candidates; that such burden was not justified by any governmental interest in preventing corruption or the appearance of corruption; and that equalizing electoral opportunities for candidates of different personal wealth was not a permissible Congressional purpose. 

According to the FEC, the largest individual donors to Republicans in the 2020 election were Sheldon Adelson ($225 million), Richard Uhlein ($75 million), Kenneth Griffin ($70 million), Timothy Mellon ($60 million) and Dustin Moskovitz ($50 million). The two largest donors to Democrats—Michael Bloomberg ($150 million) and Thomas Steyer ($80 million)—were running for President themselves, so a large part of their donations was likely made to their own campaigns. The Adelson-backed super-PAC decided to support Trump late in the campaign, which likely contributed to Trump’s upset victory.  Thus illustrating yet more evidence of a “pay-to-play” political system.

Interest groups as well as wealthy individuals donate to political campaigns. One might think that these interest groups—who operate from individual donations and pooled funds—would likely be more representative of “the people.”  Yet, here again, we see that many of these groups either represent business interests (e.g., the Chamber of Commerce), or are “astroturf” organizations which appear to be supported by grass roots small donations, but are actually funded by wealthy (and often anonymous) donors:

  1. U.S. Chamber of Commerce   $130 million
  2. Crossroads GPS     $110 million
  3. Americans for  Prosperity    $59 million
  4. National Rifle Association    $58 million
  5. American Future Fund    $51 million

In 1971, only 175 firms had registered lobbyists in the nation’s capital. By 1982, some 2,500 firms had registered lobbyists. The number of Political Action Committees (PACs) increased from less than 300 to over 1,200 between 1976 and 1980, and their expenditures on congressional races increased nearly 500%.  In 1975, total revenue of Washington lobbyists was less than $100 million. By 2006, it was over $2.5 billion.  Although the number of lobbyists and the amount of money spent on lobbying proliferated during the 1980s and 1990s, the number of active lobbyists peaked at 14,837 in 2007.  In terms of both number of lobbyists and money, lobbying has been on the decrease following restrictions and reporting requirements passed by the Obama administration in 2008.

The Federal Election Commission (FEC) is itself a rather toothless organization. It is governed by six Commissioners, three from each of the major political parties. This (unsurprisingly) often results in deadlock. However, Commissioners must be confirmed by the Senate, and so the FEC frequently operates without a full Commission, which hinders its ability to issue rules, conduct investigations and approve enforcement actions. Shortly after the Citizens United decision, the FEC allowed the creation of independent expenditure-only committees, now known as super-PACS. Unlike political candidates, who must build their campaign coffers with legally limited smaller donations, super-PACs can collect six and seven figure donations. This “outside” (i.e., not under the control of a party or candidate) spending has amounted to $4.5 billion since 2010, outpacing “regular” candidate spending and contributing to record-breaking expensive campaigns. Billions of super-PAC dollars can flow instantly into ads and other communications—and they are often hard to distinguish from the ads produced by the candidates themselves.

Capturing the policy agenda with money may have been the primary agenda. But, in order to survive public scrutiny (and perhaps opposition), the oligarch agenda had to be supported with “scientific” sounding logic and argument. Money that wasn’t directly used to influence legislators and legislation was directed into academic-style “think tanks” that provided an intellectual foundation for oligarch ideology. This strategy is termed “preference-shaping,” a technique generally associated with advertising and marketing. When applied to the electorate, preference shaping is designed to insure that—during those few times when ordinary people (i.e., voters) are in a position to make a decision—that they are imbued with the world view, frameworks, and preferences of the plutocrats.

The Heritage Foundation was established in 1973 among a list of conservative notables. The Heritage Foundation receives an average annual revenue of $112.7 million. The Libertarian CATO institute was founded in 1974 and relocated to Washington in 1981. The older American Enterprise Institute—with an average annual revenue of $64 million—has been around since 1938. The AEI provided many of the personnel to staff the George W. Bush Administration. The Claremont Institute, founded in 1979, has become more recently infamous for its former senior fellow John Eastman, a figure (with another memo) who is nearly inextricable with January 6th. These are the sources of foundational ideologies that preach the gospel that allowing a few folks to become obscenely wealthy is good for all of us. This includes the “greed is good” ethos that emerged in the 1980s as well as “trickle-down” (aka supply side) economics—which has actually been disproven by real economists. But you would never know this from the continued promotion of it among economic and political elites.

Campaign finance ethics tends to focus on individual candidates—who is giving to whom in exchange for what favors. But the huge sums of money in our political system have a more insidious (and harder to discern) effect on both democracy and the welfare of the rest of us. It creates a system that is wealth-biased, or based on the presumption that everyone is equally free to accumulate as much as they are logistically able—and indeed are even expected to do so. Those whose only objective is the increase of their own wealth and power are easily able to create a unified and coherent value system.

All the rest of us, however, have a much wider universe of needs and interests: some folks struggle to keep a roof over their head or have enough to feed their families; others are worried about the quality of K-12 education for their children today and the cost of higher education for their children tomorrow. Others have more existential concerns about climate change, globalism, or war. If we can find time, energy, and resources which are not consumed with daily survival, we may be able to help toward one of these causes in some small way. But we will never have the unified clout of plutocrats and the corporatocracy. Indeed, a 2014 study by political science academics concluded that, “When the preferences of economic elites and the stands of organized  interest groups are controlled for, the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”

 

A Butterfly Flaps Its Wings: From the Powell Memo to the Eastman Memo and January 6th

Published on by Brynne VanHettinga

Part 2 of a 10-part Series:

The Origins of Anti-Democratic Sentiment in America

“The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable.”

                                                                                              Adam Smith, 1776

An event does not occur in a vacuum, and the Powell Memo was preceded by the unique history that shaped the United States. We will first look at some of this history before turning to the subsequent critical junctures that led to January 6th.  We will also delve into an analysis of the dark side of human nature—the one thing that seems to be constant throughout historical idiosyncrasies.

Although we here trace the roots of the January 6th insurrection to the 1971 Powell memo,  tension between anti-democratic and anti-elitist urges has been present since the founding of America. Paradoxically also in 1971, a political scientist by the name of Thomas Dye proposed an alternative political model he called “elite theory.” The elements of elite theory are that (1) society is divided into the few who have power and the many who do not, (2) the few who govern are not typical of the masses who are governed, (3) elites share consensus on the basic values of the social system and the preservation thereof, (4) public policy is set by, and reflects the demands of, prevailing elites and is imposed downward on the masses, and (5) the masses are relatively apathetic and exert little direct influence on elites and their policies.  At the time, elite theory was just another model for political scientists, along with more familiar models like interest group pluralism.

As time went on (and particularly as the Powell Memo became operationalized), Dye realized that his elite theory was probably a more accurate description of American politics than the other models. Dye began publishing a book—which he updated every year or two—called The Irony of Democracy. Here, he exposes the elitism that accompanied America’s founding, and how elites have affected our political system throughout history. However, Dye’s own analysis contains elements of elitism: He suggests that a certain amount of elite control was necessary because if you allowed the uneducated masses to govern themselves, you would no longer have a democracy (what the Federalist writers called “tyranny of the majority”). The “irony of democracy” is that it contains the seeds of its own destruction.

The United States consolidated during a period of colonialism—a system where European nation states were driven by expansionist rivalry.  Territorial expansion translated to an increase in both national wealth and global power, and this expansion was often accompanied by expropriation of the land (e.g., Native Americans) and labor (slave trade) of others. Because colonial expansionism also occurred during the period of the Enlightenment—a philosophy that emphasized scientific inquiry and individual rights—it had to develop a logic and discourse to justify itself. Thus was born a theory of racial superiority, or the justification of subjugation based on superior rights (logical hierarchy) and inferior race. In America, later justifications of slavery were based on arguments of divine ordination.

To their credit, the American founding fathers anticipated the dark side of human nature and attempted to design a governing structure that would thwart it. As with all other human endeavors, it was, of course, imperfect. Like the fish who does not see the water that surrounds it, the original writers of the Constitution were oblivious of the unequal structures of slavery/racism and patriarchy because they were both embedded within these systems and beneficiaries of them. Yet we have to give them credit for introducing the (at that time radical) ideals of equality and individual rights, as well as their awareness of the need to design systems of governance that restricted dominator-type personalities.

The American founders had logical concerns about the concentration of power, along with its corrupting propensity. Hence, the national government was divided into three branches and Congress divided into two houses, each with the ability to “check” or override the actions of another under specified circumstances. There was also concern about the irrational “passion” of the masses overcoming deliberative logic. After January 6th, we can understand concern about an irrational mob being whipped into a violent frenzy and threatening lawful governing processes. This concern for the “passions of the mob” was based on a streak of elitism in America’s founders.

The Constitutional Convention was motivated at least in part by Shays Rebellion—an armed uprising of farmers in western Massachusetts during the period 1786-1787. The farmers, who were facing foreclosure on their farms due to high levels of debt, attacked the courthouses where banks had instituted proceedings to foreclose on their farms.  American founding fathers themselves were holders of vast tracks of land (and in some cases, slaves), and so feared challenges to property “rights” and inherited wealth. The Constitutional Convention itself was fraught with conflict around its fundamental  contradiction: the right of “the people” to rule themselves (democracy) constrained by the obligation of government to protect the sanctity of “property” (i.e., elitism).  

Americans like to view their nation’s history as one of progress and the expansion of individual rights: Slavery was abolished in 1865; the 14th Amendment, which gave freed slaves the same rights as all American citizens, was passed in 1868; women were granted the right to vote in 1920 with the passage of the 19th Amendment. None of these events were without conflict; indeed, the country nearly split apart over the issue of slavery. Because some of the former Confederate states found ways to abridge the rights of Black Americans, the Civil Rights Act was passed in 1964. Throughout the 1960s, we see much turmoil and domestic violence, but also a slow expansion of rights and recognition to previously subordinated peoples—Blacks, women, immigrants, LGBTQ, and the disabled.

While we might have heard about various protests and acts of violence during the civil rights era, what history books and classes often leave out is the violence associated with the expansion of workplace rights. In early America, most American citizens (all White men) worked their own family farms or small shops. Working for someone else was usually temporary—to pay off a debt (indenture) or learn a trade (apprenticeship). As industrialization took root, more men were forced to sell their labor to earn a living. So, the next battleground involved rights and voice in the workplace, particularly the right to unionize. In the late nineteenth and early twentieth centuries, state national guard and federal troops were frequently called on to break worker strikes. These actions often involved killing workers and citizens as well as generalized terrorization: The Bayview (WI) Massacre, the burning of workers homes in the Ludlow (CO) Massacre, and the Bisbee (AZ) Deportation. Apparently, rights such as free speech—let alone life, liberty, and the pursuit of happiness–did not apply to people who had to work for a living.

Although the right to unionize and other workplace rights were codified in the National Labor Relations Act of 1935, these rights have gradually—and relentlessly—been eroded by well-funded PR campaigns and lobbying by business elites and the corporatocracy. At the Poor Peoples Campaign rally in Washington, D.C. this June 18th (2022), someone carried a sign that said, “Slavery didn’t end…it just evolved.” Although no one today is a “slave” in the traditional sense, the system is designed so that a wealthy few can demand that all the rest of us work harder for less. And working harder for less is now more or less an equal opportunity, not necessarily dependent on race or gender.