Chapter Nine:
Same Game,
Different Names

A. The System

The creation of poverty is only one manifestation of a "system" that operates to preserve the political power of wealthy elites. This system is fueled by greed and the drive to maximize profits. But it is also driven by the lust for the power to dominate others, whether in the bedroom or the boardroom. Understanding how this system operates is critical to changing it.

Just as mainstream media reports analyzing other countries are often more accurate than are reports analyzing this country, the following description of politics in Arkansas (a virtual third-world country from the perspective of New York) published in The New York Times Magazine presents what is also a description of politics in the United States:

Power in Arkansas rests upon two enduring conditions.... The first condition is that most people in Arkansas have very little money while a few people have a great deal. The second condition is that Arkansas is not really a democracy. It has been ruled for almost all of its existence, and is largely ruled still, by a thin upper crust of Democratic Party officials and Democratic legislative leaders and important landholders and businessmen. This elite, bound together not by party or even ideology but by mutually advantageous relationships, holds sway over a small and politically disorganized middle class and a largely well-beaten population of the poor.
Arkansas is a microcosm of the entire country. Various commentators, political scientists, and sociologists have defined what C. Wright Mills called "the power elite" in various ways, using phrases such as the "upper class," "ruling class," "overclass," "governing elite", "governing class," "ruling elite," and "Establishment." In this regard, the following self-description supplied by Forbes FYI is revealing, even as it aims for a humorous irony:
Yeah, yeah, we know it's a democracy, and men are born equal, and it's a land of opportunity - but someone's got to be in charge. Call it whatever you want: the ruling class, the best and the brightest, the Beltway insiders. Our rule is, if it walks like a duck, and quacks like a duck, it's - the Establishment.

And we all know who they are. You'll find them scarfin smoked salmon and sipping Pouilly Fumé at seminars, conferences, retreats, confabs, and gabfests sponsored by the Council on Foreign Relations, the Trilateral Commission, the Aspen Institute, the Bohemian Club and now the "Renaissance" (oh, puh-leeze) Weekend at Hilton Head. Some of the names have changed, but the game goes on, and the fix is still in.

As we have seen in our analysis of the Federal Reserve, however, important splits among the elites do occur. For example, "Wall Street," or the creditor class, seems to hold more power on key economic policy issues than does "Main Street," or the nonfinancial business sector. For this reason, it seems misleading to refer only to the "elite" in the singular; there are many elites, and they are often at each others' throats.

Various efforts to identify the "ruling class" are not convincing. Gore Vidal said, "The country has always been an oligarchy of money.... They don't have to conspire because they all think alike." According to Webster's New Collegiate Dictionary, an oligarchy is "a government in which a small group exercises control, especially for corrupt and selfish purposes." But no one has been able to identify the "oligarchy" with any precision, for there are many groups that exercise control.

On this point, Robert Scheer, formerly editor of Ramparts and currently an editor at The Los Angeles Times, wrote in The Nation about his own effort to describe one grouping that was widely considered the embodiment of the ruling elite, the Trilateral Commission:

I paid the rent with a few articles on the ambitions of the Trilateral Commission before I was forced to admit that there was no there there.... [I]n the end the effort to create a new world order came to naught since the money boys, Rockefellers included, who run the multinational corporations have only one common interest, and that's maximizing their profits, which inevitably leads to disorder for others. Any kid who grew up on the game of Monopoly could have predicted that outcome. You can pretend it's a nice family game, but don't take your eyes off the kid playing banker.
For these reasons, it seems more accurate to refer to a self-perpetuat-ing system that is dominated by overlapping, sometimes conflicting elites. The Republican Party, for example, reflects a particular division among the elites: the conflict between large corporations and small businesses. One indication of this cleavage is the effort undertaken by Republican House freshmen elected in 1994 to dismantle the Commerce Department, a strong advocate for multinational corporations. Another indication is the small-business community's strong opposition to Clinton's 1994 health care plan; in contrast, corporate America, which already pays dearly for health-care benefits, was neutral. And the hostility to "free trade" within the Republican party reflects the need for tariff protections felt by many smaller businesses. Even House Speaker Newt Gingrich's threat to force a default on government debt obligations in September, 1995 during a battle over the budget - which caused anxiety on the bond market - demonstrates a lack of typical subservience to Wall Street.

Most wealthy people, however, quickly unite when they see their common interests challenged - as, for example, when confronted with proposals for major increases in taxes on the wealthy. Most business executives, motivated in large part by appreciation for the Republican commitment to lower taxes on the wealthy, remain solidly Republican in their political affiliations. A Clinton adviser in 1995 commented:

It's incredible. They all tell us we've done a great job, understood their problems in a way Bush and Reagan never did. Any yet the money goes to Newt, and when you look at the polls of business executives, maybe 5 percent or so express real support.
The loyalty to the Republicans on the part of the wealthy may weaken as Republicans become more radical in their positions and Clinton and the "New Democrats" reject historic Democratic principles. In 1995, presidential historian Michael R. Bechloss observed that already "the pragmatic, moderate executives of big firms are not sure where to go." The Republican and Democratic parties are thus maneuvering for support from different elements among the wealthy. Exactly how the pieces will coalesce remain to be seen.

But we can still speak of "wealthy elites" as a cohesive force. Erwin Knoll, editor of The Progressive, described this unity of purpose in this way:

[T]hose elites, which control both major parties, are in full agreement on the basic principle that nothing should be done unless it further enhances the wealth and power of those who are already wealthy and powerful.
From a similar perspective, Christopher Lasch has offered the following description of what he simply called "the elites":
...those at the top of the social hierarchy, the elites who control the international flow of money and information, preside over philanthropic foundations and institutions of higher learning, manage the instruments of cultural production, and thus set the terms of public debate.
Americans appear to be keenly aware of these realities. A recent New York Times Poll found that 79 percent of the public "say the Government is run by a few big interests looking out for themselves."

The influence of the wealthy flows in large part from the fact that they provide major financing for the cost of political campaigns. In early 1995, as the Presidential campaign was just beginning, populist columnist Jim Hightower said:

the conventional media are ignoring what could be called the first and maybe most significant primary election, which is under way right now: the Wall Street primary. The winner here is not chosen by voters - one person, one vote - but by dollars.
Hightower reported that Republican candidate Phil Gramm collected half a million dollars at one Wall Street party hosted by several financial houses, while Bob Dole raised one million dollars at another. By March 31, 1995, more than nine months prior to the first Presidential primary, the three top Republican candidates had already spent $9.1 million, three times the previous record for that early in the campaign. Hightower's conclusion: "Washington serves Big Money because Big Money gets to vote earlier than you do."

In August, 1995, the pro-business Investor's Business Daily reinforced this point with a banner-headline story titled "Winning the Invisible Primary," with a prominent table titled "Money Talks." The article reported, "Candidates who have raised the most money early [prior to the first primary] usually win." Since 1980, only one candidate who had raised the most money prior to election year, John Connally in 1980, failed to win his party's nomination for President once the electorate began voting.

In addition, wealthy elites provide elected officials with financial assistance of all sorts. Hillary Clinton, for example, received valuable assistance on the commodities market from wealthy supporters and attracted business for her law firm from people who benefited from actions taken by her husband, who at the time was the Governor of Arkansas.

But the Clintons are hardly alone. In one sting operation in the late 1980s, when an FBI agent posing as a steel-products salesman offered 106 bribes to public officials, 105 of the bribes were accepted. The only one who refused did so because he consider the amount offered to be insufficient. "It used to be that influence-peddling was hidden because people thought it was unacceptable," commented Fred Wertheimer, head of Common Cause. "Now it's a formal part of the system." The 19th century maxim coined by Pennsylvania Senator Simon Cameron still holds true: "An honest politician is one who when he is bought will stay bought." President Harry Truman, however, reminded us not to scapegoat politicians: "Whenever you find a crooked politician, you'll find a crooked businessman behind him."

Elected officials are also influenced by knowing that when they leave government service, people in high places will offer them high-paying positions in the private sector if their public service has been beneficial to the wealthy.

Wealthy elites also wield power through their ability to finance lobbying campaigns, both on legislation and on citizen-initiated referendum. Increasingly, wealthy individuals and corporations are funding grassroots organizing efforts to help shape public policy.

In addition, members of Congress themselves tend to be wealthy, which encourages them to advance the interests of the wealthy in general. Millionaires are thirty times more likely to found in Congress than among the general public. In 1994, there were at least twenty-eight Senators and fifty Representatives who were worth a million dollars.

The wealthy also benefit from owning most of the media which supplies economic information and analysis to the American people. As the ownership of the nation's newspapers, magazines, book publishing companies, and electronic media becomes increasingly concentrated in the hands of fewer people, the likelihood increases that supposedly "objective" reporting will be slanted to favor policies that benefit wealthy elites.

This media bias is often difficult to detect, as when disputed issues are reported as unquestioned fact. The uncritical reporting of poverty statistics and the acceptance of statements by the Federal Reserve concerning why they keep interest rates high are two examples already cited. Another example is the following. On April 29, 1995, The New York Times reported that in the first quarter of that year, "the economy slowed to a 2.8 percent rate of growth," which the Times then described as "about twice as fast as could be sustained without causing inflation to heat up." This statement thus legitimized a highly controversial rationale for suppressing the economy with high interest rates. Reporting theories as fact in this way is a common way to sanction established policies.

These political resources give wealthy elites the ability to shape policy whenever they share a consensus concerning the desired course of action, which they usually do.

It is important not to scapegoat individual rich people, however. The real problem is not "the rich"; it's "the system," which is self-perpetuating. Webster's Collegiate Dictionary defines "system" as: "a regularly interacting or interdependent group of items forming a unified whole." Applied to human societies, "the system" can be defined as the major set of regularly interacting and interdependent social institutions - including government, private business, the media, schools, and religious institutions - working together for a common aim. The principal purpose ofthe system of institutions in the United States, as in most societies, is to preserve the wealth and power of the wealthy and powerful.

The regulated form of free-market capitalism operating today not only serves to preserve existing wealth and power; it also enables wealthy elites to expand their wealth. The capitalist drive to maximize profits leads inevitably toward an increasing concentration of wealth in the hands of fewer and fewer people - unless the government intervenes.

This interlocking system of domination is self-perpetuating. So no individual or set of individuals, including the members of the Federal Reserve Board, can be blamed for the injustice that results. As discussed in the previous chapter, former Fed Chairman Paul Volker acknowledged that the Fed adheres to the consensus "of what's acceptable and unacceptable in terms of at least informed opinion." In large part, the "informed opinion" to which he refers is found in the bond market, where bonds are sold and re-sold. When bond buyers anticipate a general increase in inflation, they are willing to pay less for bonds, which forces down bond prices and pushes up the interest that they pay. The Fed responds to such increases in interest rates by solidifying this trend by boosting the interest that banks must pay to borrow money. According to Doug Henwood, editor of Left Business Observer:

This should send populists who think the Fed controls everything back to their spreadsheets; it follows almost as much as it leads. Central banks are embedded in a private financial system, a system that serves the interests of private holders of capital. Their sensitivity to the bond market is proof of this.
The financial system Henwood describes is intertwined with and drives the larger social and political system that carefully selects individuals who are allowed to rise to the top and quickly replaces anyone who "bucks the system." This system relies primarily on carefully selecting those who are allowed to exercise the reins of power. As Arkansas power broker Don Tyson, owner of Tyson Foods and old friend of President Clinton, admitted:
The Arkansas system had always been to find some good young people and encourage them on the local level. The system kind of weeds them out, and out of that comes a United States Senator or a Governor.... It's like a horse race. You back three or four, so you always get a winner.
And then you get a President. It is almost impossible for anyone without major backing from wealthy elites to make a serious run for state-wide or national office.

The same dynamic operates throughout society. Those in positions of power select subordinates based on a whole set of subtle characteristics that are difficult to define and often semi-conscious. These characteristics include appearance, clothing, manner of speaking, accent, language, educational and family background, and "proper" manners. Many of these arbitrary characteristics are inherited biologically and others are inherited socially, learned over many years of childhood conditioning in a way that is difficult for an adult who has been raised differently to mimic.

In The Nation, a former Marine Corps office, C.J. Chivers described this process vividly:

[I]n the military a pure merit system never really existed. One officer is granted a career-enhancing transfer because he attended the right college, say West Point. Another receives a top performance evaluation because he golfs with the colonel. A third is awarded an accelerated promotion because he once worked for a senior officer who now pulls weight in Washington. This aptly named old-boy network has long made the top ranks a clubby place.
In these ways, low- and middle-income people, women, and people of color are screened out of the upper echelons. The white, male children of the elite rise to the top and pre-existing patterns of stratification are reproduced. As the aristocracies under the monarchs of Europe inherited economic and political power, so do the elites of today.

B. The Will to Power

Making money is more than an end in itself; it is also a means to status and power. Only those who seem to enjoy the trappings of affluence are admitted to the elite circles. As the famous exponent of capitalism from the 1700s, Adam Smith, observed:

With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in their eye is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess by themselves.
The ongoing process of selection and de-selection constantly rewards (or insults) the egos of those who engage in the competition for recognition and admiration. Promotions are more than a matter of increased salaries; they are a measure of self-worth. Awards ceremonies are a common way the system fuels the enthusiasm of its supporters. Power brokers and hangers-on relish belonging to an informal private club of "movers and shakers." They derive immense satisfaction from rubbing shoulders and being photographed with Presidents and Governors. "He gets his kicks from winning," commented a colleague of Dick Morris, trying to explain why the Republican strategist was willing to become one of Democratic President Clinton's top advisors. This dynamic operates across the board among the wealthy, many of whom strive more for their egos than anything else. Media mogul David Geffen once told former Governor Jerry Brown, "I don't care about the money. It's the way I keep score."

The system dispenses similar psychic rewards to grassroots activists. A new Clinton-era lobbyist, for example, once said, "I can't tell you how wonderful it is to walk down the hall in the White House of a government agency and be greeted by your first name." It is easy to imagine how likely this lobbyist will be to publicly confront those whose recognition he so craves.

Another example is that well-heeled private foundations often hold elaborate dinners to give awards to community volunteers and poorly-paid social workers who fail to directly challenge the concentration of wealth and power. They rarely do the same for political activists who do. Stroking egos is a way to feed the lust for power. It serves as an alternative way to seduce non-materialistic, compassionate people away from political action. Different strokes for different folks; whatever works.

The irony, however, is that the emperor is naked. The corridors of power are filled with smoke and mirrors. The sense of personal power is an illusion. Each individual serves at the pleasure of the system, which relentlessly operates to implement the consensus of what is "acceptable." Even the President of the United States is largely a puppet, severely limited in the options available to him. He can easily be replaced (as was Richard Nixon) if he acts unilaterally for his own agenda (as Nixon did). But people with hungry egos will forever sacrifice their integrity if the right people tell them they are powerful. In this way, they perpetuate the system and protect the concentration of wealth and power.

C. Depoliticize the People

In countless ways, the system operates to depoliticize the general public. Virtually every aspect of the dominant culture, as perpetrated by the corporate media, serve this function. For example:

The writer, Michael Lind, argues that the "overclass" in the United States, unlike fascists, wants to "de-mobilize" people. This point is well taken, and should be borne in mind by those who loosely throw around the word "fascist." The fascists of Germany and Italy rallied the masses into political action. The elites in this country implement a much different strategy: they perpetuate a culture that does everything possible to discourage political action, except going to the voting booth occasionally to choose between the lesser of two evils.

Institutions that address poverty have their own ways of demobilizing their clients. As the sociologist Todd Gitlin wrote:

The special powerlessness of the poor derives from the same welfare state that was intended to remedy the excesses of unbridled capitalism. While the poor have been kept alive, they have been subjected to a new set of institutions that extort elementary freedoms as the price of sustenance.
When conservatives attack the welfare system for supposedly creating "dependency," they seldom comment on the fact that the system breeds passivity and undermines political action. Not only does the threat of terminating benefits serve to intimidate clients; the entire process of applying for benefits tends to be humiliating. This humiliation reinforces the lack of self-worth felt by many if not most of those who are labeled "losers" by the dominant culture. Consequently, the potential of political protest is minimized.

Among the general population, the creation of widespread economic insecurity promotes anxious self-centeredness as people constantly worry about mere survival. If there were no poverty, the political power of wealthy elites would be threatened. The middle-class would more likely join forces with lower-income people if economic insecurity did not foster selfishness. And the poor, who are relatively inactive politically, would be more active once they were no longer poor. Poverty thus serves to demobilize and "divide and conquer." Without poverty, the people-at-large could better able implement true democracy in this country and take power away from the wealthy elites who dominate politics. The fact that poverty helps the wealthy to hold on to social status and political power is a major reason we have poverty in the first place.

D. Current Conditions

The American people are well aware that wealthy elites mold public policy in their own interest. From 1966 to 1986, the percentage of people who agreed with the following statements increased as indicated:

The rich get richer and the poor get poorer6281
What you think doesn't count much anymore4460
The people running the countery don't really care what happens to you4155
You are left out of things going on around you2037

This dramatic increase in disenchantment and alienation, which has grown steadily for more than 25 years, is astounding. It reflects a pervasive sense of powerlessness. In late 1994, 68 percent of respondents told the Times/CBS Poll that people like themselves had not much "say ... about what the government does." In mid-1995, 79 percent said "the Government is run by a few big interests looking out for themselves."

Yet no broad-based popular movement is emerging to demand more political power and more economic opportunity for ordinary citizens. One reason is that the post-war boom, through the 1960s, gave many people a sense of optimism and a basic trust in the system. But our economy, as it continues to undergo basic transformation, is eroding security and fomenting cynicism. This economic dislocation could well open the door for a new surge of populist protest. Current anxieties about these developments among the middle-class provide an opportunity for a new alliance among people of all income groups. The broad resistance to cuts in assistance to the poor bodes well for this possibility. Clearly there is a strong base of support for a new movement to demand economic security for all.

By uniting for everyone's benefit, we can achieve much more than we can if we remain as divided as we are today. President Clinton's strategy of appealing primarily to the middle-class is short-sighted. His rhetoric divides low- and middle-income people. And as Democratic campaign staffer Ben Sherwood argued, "Try as he might, Republicans will out-shout and outmaneuver him in the middle-class arena of 'us against them.'"

Promoting the basic human right to economic security bears potential as a way to build grassroots political power, especially in the long run. One way or the other, the federal government must guarantee everyone the right to a living-wage job and insure that retired persons and people with disabilities receive above-poverty incomes. Commenting on the possible loss of the entire fish stock off the North Atlantic coast, a guest interviewed on the McNeil/Lehrer Newshour commented, "What makes sense for the individual can mean disaster for the commons." It is time for individuals to realize their self-interest in the common good. When a broad coalition unites to demand economic security for all and develops a specific program for achieving this goal, it will be a force that could transform this country.

This country has available more than enough wealth to guarantee every adult a living wage job. And there is plenty of work that needs to be done: child care; in-home caregiving; health care; teacher's aides; recreation staff; arts programs; community center staff; peer counselors in drug and alcohol programs; mediation and conflict resolution; transportation; housing rehab; environmental cleanup; planting community gardens; etc.

For these reasons, we must develop a concrete program for establishing economic security behind which a broad coalition can unite. With the Republican Party in control of Congress and threatening to reverse the New Deal, the time has come to revive President Franklin Roosevelt's vision of economic security for all. With the New Deal, President Roosevelt affirmed federal responsibility for the economy and for individual victims of limited economic opportunity. By proposing major cuts in federal spending, the Republicans aim to overturn these policies. If this attack is met with a vigorous defense of Roosevelt's values, the result could reinforce his approach and achieve goals that he failed to realize.

The Republicans constantly echo President Reagan's principal theme, voiced in his first Inaugural Address: "Government is not the solution to our problem. Government is the problem." But this crusade to reject Roosevelt's philosophy is meeting stiff opposition. Although most voters endorse the abstract idea of a smaller government, support for specific federal programs remains strong. "They just don't like the idea of government," wrote San Francisco Examiner columnist Christopher Matthews, "[but don't] want to live without it."

Public opinion polls show that the Republicans are encountering a backlash as their anti-government platform is translated into legislation. Shortly before the election, a Times Mirror survey found that 88 percent of the public supported "new federal spending to provide education and job training for American workers whose jobs have been eliminated" and 59 percent agreed that "the federal government should guarantee every citizen enough to eat and a place to sleep."

Shortly after the election, The New York Times reported that among the general public 65 percent believed that "it is the responsibility of government to take care of people who can't take care of themselves" and 87 percent agreed that "the Government [should] create work programs for people on welfare." Only 24 percent thought that "after a year or two welfare recipients should stop receiving all benefits." And only 9 percent held that "government spending on programs for poor children should be [decreased]." Depending on how the question is phrased, half or more of the public already agree that the federal government should guarantee everyone the right to a job.

Moreover, the Republican agenda is unlikely to improve the living standards of most Americans. In response to this decline, pressure builds for major change in national economic policy. Without a foundation of economic security and the ability to make ends meet, most people have trouble finding satisfaction in their lives and hold the federal government accountable. In the 1994 election, angry "swing voters," dissatisfied with the economy, punished the party-in-power by electing a Republican Congress; they did not embrace the Republican agenda.

So long as the majority of Americans face falling living standards, the future is volatile and unpredictable. The electorate could easily reject the Republicans in 1996, especially if the Democratic Party or some third party promotes a clearly-defined program that effectively addresses underlying economic frustration. Without a strong popular movement pushing in that direction, however, no party is likely to forcefully defend New Deal ideals. The next chapter considers how we can begin move in this direction.

Sources for this chapter included the following, in order of appearance.
For more specific references, contact Wade Hudson at

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Philip Harvey, Securing the Right to Employment: Social Welfare Policy and the Unemployed in the United States, 4: In 968 and 1969, when asked, "Another proposal is to guarantee work so that each family that has en employable wage earner would be guaranteed enough work each week to give him a wage [equal to the poverty line]. Would you favor or oppose such a plan?", 78 and 79 percent favored it. Thomas B. Edsall and Richard Morin, "Delegates Views to Right of Constituents," The Washington Post, 17 August 1988, A1/A30: When asked, "The government in Washington should see to it that everyone who wants to work has a job," 44 percent agreed and 52 percent disagreed.

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