Classic Economics doesn’t work anymore because a few big
players are on the verge of taking control of the markets. Now, they are planning to take over your
government.
The theory of classic economics is that markets work best
when they work on their own without influence from the government. As something goes askew in the market, they
correct themselves. As an example, if
too much consolidation of capital takes place, small independent startup
companies move in and either take a share of the market or create their own.
This is the natural way of redistributing income and
assets, keeping everything in balance.
That assumes a set of conditions that allow the markets to
respond fluidly and make adjustments necessary to keep things in balance. One of the conditions is that there are many
small players in the market all acting independently. With many small independent players, no one
player can control the entire market.
Now three things are happening.
Monopolistic size players, the top 1% of the United States
population, are holding a larger share of the private assets and taking a
greater share of earnings since the country was created. (2) In 2007 they held about 35% of the nation’s
private assets. (3) Some sources say the
percent held by the top 1% is even greater. (4)
At the current course, the top 1% will own about half of all private
assets in just a few years. (3) Additionally,
the top 1% are banking about 25% of all earnings in American, compared to only
9% 25 years ago. (3) As model of good
capitalism, taking 9% of the total earnings doesn’t place the wealthiest people
in a controlling position. At 35%, they
are now closing in on controlling the market.
The natural balancing force for the market is showing
signs of failure due to the controlling factors of the top 1%. As stated before, new business startups help
keep the accumulation of wealth in check.
As markets grow, new businesses develop.
They begin to pull some of the share of the market away from the larger
business. This creates a natural sharing and redistribution of the wealth.
But, if startup growth slows, the large players will
continue to grow because of the lack of balance. To illustrate this point, there has been a
thirty-year decline of startup growth.
(This has been happening through Republican and Democrat
administrations.) In 2010 there were
about 2.3 million jobs created in the U.S. by startup companies. For a population of about 308 million, that
is about 7.4 jobs per thousand people. That
sounds good until you compared to 1986 when 3 million jobs were created for a
population of 240 million. That equates
to 12.5 jobs per thousand people. That
is a drop of about 60% of jobs per thousand people over the decades.
Less startups are creating less jobs for more people. That is not enough to balance the markets and
keep wealth evenly divided.
Finally, the top 1% have created their own “Collective Defense
Monopoly” [author’s term] and are now “investing” in the political process to
preserve their position. Jane Mayer,
author of Dark Money, states that many of the wealthiest individuals in America
are working directly with the Koch brothers and many of their lobby groups to
pressure congress and now President Trump to develop legislation that will
preserve their wealth and power. The “investors”
have a war chest of approaching $1 billion dollars (or more) to help their
cause. (3) The New York Times reports
that Koch spent over $800 million on this last election alone.
Is it getting a return on investment? It put Trump in the White House and took
control of both the House and the Senate.
Additionally, of President Trump’s advisors and cabinet positions are filled
with people working closely with the Koch brothers and their many
organizations. (A follow up blog that is being researched right now will detail
the people working with Trump originate from the Koch brothers and the
organizations they support.)
To fight this there are some practical things that can be
done. We as consumers must seek out
small businesses in every corner of the market and purchase products and
services created locally by small businesses. This will begin to build the
assets of small businesses, encourage startups to entire the market and keep
dollars in communities that are now being decimated by large corporations.
But, on the government level, we must also develop business
policies and systems that create a balance of power in the markets just like
America has in government. We praise at
every turn the American system of government that have three branches. Each branch checks the power of the others and
prevents one from dominating. Then why
do we decry the creation of the same kind of controlling forces in
business? We need checks and balances that
prevent one business, or in this case, a collective, from dominating the market.
The Dodd Frank act was one way of adding
some checks and balances. But, it is
being cancelled by Trump’s executive orders.
Finally, there needs to be a way to prevent money from
dominating politics. The Koch brothers
and their friends through their “Collective Defense Monopoly” raised more than
a billion dollars to influence the outcome of the last election. (3) (7) This
group of investors only has about 300 members. (7) That means that each member invested over
$3,000,000 each.
The total money raised for the election for 2016 is
estimated to have been about 6.9 billion. (7)
The billion dollars the Collective Defense raised represents 16% of the
total money spent on the election. In perspective,
the total population of the United States is about 323,000,000. That means on average each person in the
country spent only $21.
The Supreme Court has ruled that money is speech. But speech, in elections, is not free. It costs money to get the attention of candidates.
How much attention can $21 get compared to
$3,000,000? That isn’t one person, one
vote.
(1) Population
growth in the United States last 100 years - http://www.multpl.com/united-states-population/table
(2) U.S.
Income Inequality: It’s Worse Today Than It Was In 1774 - https://www.google.com/amp/s/www.theatlantic.com/amp/article/262537/?client=ms-android-hms-tmobile-us
(3) Dark
Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right – Jane Mayer,
(4) How Unequal We Are: The Top 5 Facts You Should
Know About The Wealthiest One Percent Of Americans - https://www.google.com/amp/s/thinkprogress.org/amp/p/a1d36a0f10f6?client=ms-android-hms-tmobile-us
(5) The 30-Year Decline of American
Entrepreneurship - The Atlantic - https://www.theatlantic.com/business/archive/2012/09/the-30-year-decline-of-american-entrepreneurship/262831/
How much did Koch
spend on 2016 elections - https://www.nytimes.com/2015/01/27/us/politics/kochs-plan-to-spend-900-million-on-2016-campaign.html?_r=0
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