Sunday Book Excerpt From "The Hidden History of American Oligarchy"
If you were looking for a date when our modern American oligarchy started, it would be January 30, 1976. It was a clear day in Washington, DC, the temperature well above freezing with a light wind
America has had several brushes with oligarchy, the first being when the South shifted from democracy to oligarchy early in the 1800s, leading us directly to the Civil War, a war that partially restoree democracy to that part of America. In the 20th and 21st centuries, the oligarchic era began with two Supreme Court decisions in the 1970s and really got underway with the election of Ronald Reagan, then exploded after the 2010 Citizens United decision. The biggest problem with oligarchy, as I lay out in detail in the book, is that it’s among the most unstable forms of government: it rarely lasts more than a generation or two before either reverting back to democracy or transitioning into full-blown tyranny. That theme and warning runs through The Hidden History of American Oligarchy: Reclaiming Our Democracy from the Ruling Class. This excerpt starts from page 99 of the book:
The Supreme Court Sets Up American Oligarchy
If you were looking for a date when our modern American oligarchy started, it would be January 30, 1976. It was a clear day in Washington, DC, the temperature well above freezing with a light wind.
When the Supreme Court handed down their decision in the case of Buckley v. Valeo, the New York Times noted in a front page article, “Campaign finance law in New York, New Jersey, Connecticut and 32 other states will require drastic revision in the wake of yesterday's Supreme Court decision that struck down nearly all limits on campaign spending by candidates for Federal office.”[i]
It was the first of a cascade of decisions that reached their peak in 2010 with Citizens United v. FEC.
From 1789, when the Constitution was ratified and we officially became a republic, until 1976, when the Supreme Court decided to strike down thousands of state and federal laws put in place over a century or more to hold back oligarchy, the federal government had never before interfered in the right of states to regulate money in their elections. In 1907, in fact, the federal government itself had made it a felony for any corporation to give money to candidates for federal office with the Tillman Act.
Buckley struck down most of those laws in 1976, despite the objections of Justice Byron White, who said that money in politics posed “a mortal danger against which effective preventive and curative steps must be taken.”
Two years later, in a decision authored in part by Lewis Powell, the justices extended the “you may spend whatever you want to influence elections” logic to corporations, citing the 1886 Santa Clara headnote in their First National Bank of Boston v. Bellotti decision.
Prior to Buckley, candidates for office had a huge incentive to do at least the bare minimum necessary to meet the needs of their voters; elections turned on performance as much as ideology. But by Reagan’s 1980 election, all that was necessary was that candidates and incumbents say they were doing what voters wanted, because big donors and campaigns themselves could simply amplify the candidates’ words ad infinitum via purchased media.
Politics turned from “the art of the possible” to “the art of the con,” at least for those politicians and parties willing to sell themselves to the highest bidder. Probably the best examples of this were Reagan’s twin assertions that ridding workers of the right to unionize would lead to better wages and benefits, and that if taxes on the very wealthy and big corporations were radically reduced, it would make working class people wealthier.
Both were demonstrable lies, with centuries of evidence proving them false. George H. W. Bush, in the 1980 Republican primary, even called Reagan’s claims “voodoo economics,” saying, “It just isn’t gonna work,” although after Reagan picked him as VP, he was reduced to stammering on national TV that he’d never said such a thing.[ii]
Union leaders, meanwhile, warned their workers that once the unions were reduced in power, wages would begin to fall and Republican “free trade” agreements would ship millions of unionized jobs overseas. Nixon had opened the door to China, and the G. H. W. Bush administration negotiated the NAFTA deal with Mexico. Think tanks getting massive infusions from the scions of banking and oil fortunes poured out the propaganda, though, and it took 30 years or more before most working-class Americans figured out that they’d been screwed back in 1981.
In 1992, Bill Clinton assured Americans that deregulating banks would make people’s savings safer, that gutting the social safety net and “ending welfare as we know it” would benefit poor people in depressed parts of the country, and that NAFTA would open the door to millions of new tech jobs to replace all those dirty factory jobs that would go to Mexico and, later, to China.
By 2008, voters were starting to get wise to the game and rejected Senator John McCain’s argument that more tax cuts and fewer unions would revive the economy; voters went instead for “hope and change.” After Barack Obama took office, he had only 74 working days during his entire presidency with a filibuster-proof Senate through which he could pass legislation.
Nonetheless, he got through the Affordable Care Act and dozens of less notable but important pieces of legislation, particularly the creation of the Consumer Financial Protection Bureau, which, to date, has recovered over $12 billion stolen from average Americans by big banks.[iii]
Donald Trump, riding a long-shot candidacy, apparently got the memo. He’d been a Democrat his entire life, because that party largely controlled New York. As such, he knew that most Americans were sick of the trade deals that were sending jobs overseas, and that some of the loss of unionized factory and construction jobs could be blamed as much on brown-skinned people coming illegally from south of the border as on China.
Combining the two topics, along with a good dose of white supremacist rhetoric to reach out to Reagan’s original coalition, and throwing a bone to the religious right that he’d protect their tax-exempt status even if they broke the law (which he vowed to change) by politicking from the pulpit, he picked up enough votes in Midwestern states ravaged by NAFTA to help him beat Hillary Clinton, whose husband had signed that despised trade deal.[iv]
The argument for oligarchic control is the same argument that’s been made by conservatives throughout history, from Thomas Hobbes to Sir Edmund Burke to Warren Harding and Donald Trump:
With us in charge, we will keep you safe and happy, and you really don’t need to concern yourself with the complicated work of governance. You don’t want to tear down or shake up the system: having very wealthy people control the government has always led to the greatest level of stability and peace—look how stable Europe was for a thousand years when royal families and their landed gentry ruled. We’re the ones chosen by God or a brilliant DNA lineage to lead. Just go shopping and leave things to us.
This led us from the oligarch-friendly President Reagan to the conversion, in 1992, of the Democratic Party via the Democratic Leadership Council to become oligarch friendly itself (a legacy it’s today struggling to undo). In 2016, such oligarchs as Robert Mercer and Charles Koch finally, directly and indirectly, put an oligarch, Donald Trump, in the White House.
“Starve the Beast” and Gut the Republic
One of the most successful ways in which the oligarchs, using their think tanks and media, have convinced Americans that government is bad and government functions should be privatized and run by oligarchs is through a strategy that the Reagan administration first articulated and was described in the Wall Street Journal in 1985.[v] It was called “starve the beast,” and essentially it follows a simple three-step process.
First, Republicans promote the idea that taxes are too high and are strangling the ability of rich people and their companies to stimulate the economy, which, they say, would raise every working person’s pay and benefits. On this promise, they pass massive corporate, individual, and capital gains tax cuts.
Second, they point out that there’s now a huge deficit (because of the tax cut) and declare that it’s vital to “cut waste, fraud, and abuse” out of the system—and so they cut staffing to agencies like the EPA, IRS, and Social Security Administration.
When Trump came into the White House, Social Security Administration staffing was already 10 percent below what it had been in 2011, and because of previous staffing cuts, the agency had a backlog of more than 1.1 million disability claims. Wait times were running over two years.
So, of course, the good Republicans in the Trump administration proposed that as many as 15,000 of the Social Security Administration’s 62,000 employees now qualified for early retirement and could leave work with a nice parachute anytime they wanted to.
As Government Executive magazine reported in August 2017, “About 15,000 of SSA’s 62,000 employees meet” the criteria for early retirement. “President Trump through executive order and the Office of Management and Budget through subsequent guidance directed agencies to develop plans to trim their workforces. . . . SSA joins the Environmental Protection Agency and the Interior Department in offering separation incentives this year.”[vi]
The predictable result of this chipping away at the federal workforce was a collapse in customer service and regulatory oversight. As wait times for meetings with Social Security and Medicare workers lengthened, the third part of the plan kicked in: Once the government agency is successfully hobbled—the beast is starved—roll out an alternative where some crony friend of the politicians can make money off of what was previously a government-only service.
Trump did this with Obamacare during the sign-up period in late 2018, cutting access to the website, dialing back promotion of the program, and adding complexities and hoops that would discourage people from signing up for government-subsidized health insurance. And, sure enough, enrollment dropped.
Another area where “starve the beast” has successfully been used is the IRS, which is now so severely understaffed that they’ve largely stopped auditing rich people’s returns, realizing Leona Helmsley’s declaration that “only the little people pay taxes.”[vii] They’ve also starved the Veterans Administration, where a new privatization scheme is further cutting VA funds by redistributing them to for-profit health care institutions owned by American oligarchs.[viii]
Billionaire oligarch Betsy DeVos, the US secretary of education, and other oligarchs in the so-called school choice movement have been promoting private, for-profit schools for decades as a way to “reinvent” public education. After all, if you’re going to enforce oligarchy, you really need to do what they did in the Old South: not have any functional public schools, and have private schools that cater to the wealthy.
While most studies show that when a for-profit entity is skimming money off the top of a school, it doesn’t work as well as when all the funds go to teaching students, DeVos and her acolytes continued with the work of taking down our public school system and replacing it with another profit center for her billionaire peers.
Most important for the oligarchy, though, it pushes poorly performing students into the remnants of public schools, ghettoizing them, while providing a good education to children of privilege.
President George W. Bush went after the US Postal Service in a similar manner with the Postal Accountability and Enhancement Act of 2006. The Postal Service had been accumulating surpluses and proposed to use some of that money to convert its fleet of postal carrier vehicles—the largest vehicle fleet in the United States—from gas to electric and hydrogen-powered. This was intolerable to the fossil fuel billionaires who largely owned the GOP.
So oil company CEO Bush’s 2006 law required the Postal Service—and the Postal Service alone—to set aside $5 billion every year to keep in a trust fund to pay for the health care expenses of people who would retire in 75 years. No other company or government agency had ever been required to set aside monies to pay for people who, in most cases, weren’t even born yet; it was a naked attempt to drain cash from the Postal Service to stop the modernization of its fleet and to starve the postal beast to set it up for privatization.[ix]
Had the Postal Service not publicly announced its goals in 2006, it would have revolutionized transportation in the United States, setting a standard for moving the entire country’s fleet of cars away from gas and diesel.
According to the April 12, 2007, Postal Bulletin:
USPS participated in a White House event promoting alternate-fuel technology, demonstrating the technology behind two zero-emissions mail-delivery vehicles—a hydrogen fuel-cell minivan and an electric two-ton truck. The Postal Service has been collecting and analyzing data from a General Motors HydroGen3 hydrogen fuel-cell minivan delivering mail in the Washington, DC, area since 2005 and one delivering in Irvine, CA, since. Hydrogen fuel-cell vehicles emit just pure water and are twice as energy efficient as internal combustion engine vehicles.[x]
With the Postal Service being thrown from profitability into a decade of beast-starving “losses” (if it could use its $5 billion a year, it would still be profitable), the plan to move away from fossil fuels was put on hold.
And in 2020, with the coronavirus leading to more deliveries of all sorts, and with states opening up absentee and mail-in voting, Donald Trump tried refusing to “bail out” the starved USPS, likely in an effort to reduce voter turnout in November 2020.[xi]
Privatization of prisons, schools, Medicare (via Medicare Advantage, which is privatized Medicare), and student loans has wreaked damage in all of those areas . . . and in every case has followed the Reagan line of “starve the beast,” vastly enriching America’s oligarchs while weakening our democratic system.
Holding Power: Buying Friends on Both Sides of the Aisle
In 1911, Italian sociologist Robert Michels, who originated what’s known as “the iron law of oligarchy,” wrote that any organization—including every political party—would devolve into oligarchy when it reached a size large enough to both maintain and require a permanent managerial class.
Those who ran the organization would, over time, shift their loyalties from the needs