We Welcome Our New Plutocratic Overlords

Meet the new global elite. They’re pretty much the same as the old global elite, only richer and more smug.

Laura Flanders of GritTV interviews business reporter Chrystia Freeland about her cover story in the latest issue of the Atlantic Monthly on the new ruling class. She says that today’s ultra-rich are more likely to have earned their fortunes in Silicon Valley or on Wall Street than previous generations of plutocrats, who were more likely to have inherited money or established companies.

As a result, she argues, today’s global aristocracy believes itself to be the product of a meritocracy. The old sense of noblesse oblige among the ultra-rich is giving way to the attitude that if the ultra-rich could do it, everyone else should pull themselves up by their bootstraps.

Ironically, Freeland points out that many of the new elite got rich from government bailouts of their failed banks. It’s unclear why this counts as earning one’s fortune, or what kind of meritocracy reserves its most lavish rewards for its most spectacular failures.

Class warfare on public sector pensions

In The Nation, Eric Alterman assails the Republican-controlled Congress’s decision to scrap the popular and effective Build America Bonds program as an act of little-noticed class warfare:

These bonds, which make up roughly 20 percent of all new debt sold by states and local governments because of a federal subsidy equivalent to some 35 percent of interest costs, ended on December 31, as Republicans proved unwilling even to consider renewing them. The death of the program could prove devastating to states’ future borrowing.

Alterman notes that the states could face up to $130 billion shortfall next year. States can’t deficit spend like the federal government, which made the Build America Bonds program a lifeline to the states.

According to Alterman, Republicans want the states to run out of money so that they will be unable to pay the pensions of public sector workers. He notes that Reps. Devin Nunes (R-CA), Darrell Issa (R-CA) and Paul Ryan (R-WI) are also co-sponsoring a bill to force state and local governments to “recalculate” their pension obligations to public sector workers.

Divide and conquer

Kari Lydersen of Working In These Times explains how conservatives use misleading statistics to pit private sector workers against their brothers and sisters in the public sector. If the public believes that teachers, firefighters, meter readers and snowplow drivers are parasites, they’ll feel more comfortable yanking their pensions out from under them.

Hence the misleading statistic that public sector workers earn $11.90 more per hour than “comparable” private sector workers. However, when you take education and work experience into account, employees of state and local governments typically earn 11% to 12% less than private sector workers with comparable qualifications.

Public sector workers have better benefits plans, but only for as long as governments can afford to keep their contractual obligations.

Who’s screwing whom?

Former Secretary of Labor Robert Reich is calling for a sense of perspective on public sector wages and benefits. In AlterNet he argues that the people who are really making a killing in this economy are the ultra-rich, not school teachers and garbage collectors:

Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.

Signs of hope?

The economic future looks pretty bleak these days. Yes, the unemployment rate dropped to 9.4% from 9.8% in December, but the economy added only 103,000, a far cry from the 300,000 jobs economists say the economy really needs to add to pull the country out its economic doldrums.

Andy Kroll points out in Mother Jones that it will take 20 years to replace the jobs lost in this recession, if current trends continue.

Worse yet, what looks like job growth could actually be chronic unemployment in disguise. The unemployment rate is calculated based on the number of people who are actively looking for work. Kroll worries that the apparent drop in the unemployment rate could simply reflect more people giving up their job searches.

For a counterweight to the doom and gloom, check out Tim Fernholtz’s new piece in The American Prospect. He argues that the new unemployment numbers are among several hopeful signs for economic recovery in 2011. However, he stresses that his self-proclaimed rosy forecast is contingent upon avoiding several huge pitfalls, including drastic cuts in public spending.

With the GOP in Congress seemingly determined to starve the states for cash, the future might not be so rosy after all.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. 

Photo credit: HikingArtist.com via flickr
By Lindsay Beyerstein, Media Consortium blogger


Helen Delahunt-Avila
Helen Avila6 years ago

Individuals need to contact John Boehner and express your distress at the way the GOP is heading. Instead of Jobs they are attacking women's health issues, the unions and protecting the wealthy. Write your grievances to AskTheLeader@mail.house.gov
Please spread this email address to your friends, ask them to write a polite but pointed letter to this guy. He won't care but he won't like emails pointing out the stupidity of their stance on everything and failure to act like responsible citizens and public employees. (we do pay their big fat wages, cadillac healthcare and bloated pensions)

Michael Cunningham

"Martha left a comment
My sympathies lie with labor."

Yes back at the turn of the last century! What have they done in the last decade?
You make it sound like the workers look around for someone to help THEM build a business. I think you have this backwards. Business preceeds the workers not the other way 'round. Jobs leaving are more a matter of Government intrusion and costs levied by it. Institute the FairTax & they would all come back plus a buch of foreign companies. What would that do for employment?
Sorry but unions do not have a true purpose anymore. In fact in most cases they only have membership due to closed shop rules!
So everyone is supposed to be dependent on the Government for their existance? Then they will also control IF you should continue to exist.

Martha Eberle
Martha Eberle6 years ago

My sympathies lie with labor. Unions have done more to help build the middle class than any other entity, except the federal government of long ago. The Right always focuses on higher pay and medical and retirement benefits -- WHICH ARE GOOD FOR PEOPLE. But unions have also done more to increase safety and protections for workers than anyone else.

WORKERS ARE THE BACKBONE OF CAPITALISM. DON'T FORGET THAT! Without their workers, owners have no product to sell -- that's why it just blows my mind at the short-sightedness of owners, when they continue to ship jobs overseas, because their profit does not raise up American workers, who have to buy their products, for them and the American economy to succeed. It just blows my mind. The ship is going down -- so happy to see workers, both public and private, stand together in Wisconsin. Hopefully, we can get a labor movement going again. Good for them, good for our economy, good for retirees, who depend on continued tax input into our government, for benefits to keep flowing.

Michael Cunningham

"There must be an effective government to provide security in law, transportation..."
--How does one determine an effective Government. What we have now can hardly be classed as effective.

"and strong middle class to purchase their goods and services."
--Who is to say that the middle class is not strong?

"And in order for their to be a strong middle class you need good education and well paying jobs,"
--Good education, yes! But we have had decades of no improvement in education in spite of that agency having been increased by two to three times in expenditures. Money is not the problem!

"and all these things must be paid for."
--This implies that some how the Government must pay for everything. The people and business do not need the Government for them to succeed. There is a study that identifies the cost to business of Government regulation ($1.75 trillion per year). What could the country do in investment with that kind of money?

Michael Cunningham

Interesting that under the name of Duncan, but under the name Michael you have me blocked. Yet we are the very same person. I lost control of Michael for about a month. Just found my way back!

Original Message:

Tori INACTIVE left a comment on the following article:

Michael Cunningham

"History holds a fine example of today's class war, and, in all likelihood, the ONLY solution to it: France 1789Ð1799"

Not even close! Besides there is a revolution underway. Called the Tea Party!

Michael Cunningham

"The new plutocrats will not be happy until there are only the rich and the poor left and the middle class has been completely eliminated."

And how is this to be managed?
One thinks the rich, if they desired this would have been working on it already. And successful if they had a chance!

Nancy C.
Nancy C6 years ago

More to the story than meets the mind and eye. Still, the hoarders have no conscience.

Ann P.
A P6 years ago

No one is blaming all the rich. Some of the rich recognize their wealth was not built in a vacuum. There must be an effective government to provide security in law, transportation... and strong middle class to purchase their goods and services. And in order for their to be a strong middle class you need good education and well paying jobs, and all these things must be paid for. Any rich person who does not understand this deserves all the disdain being expressed.

Past Member 7 years ago

and arrogance isn't the answer for these new super rich...they really should have studied some history...remember marie antoinette?? i'm afraid that the ruled class doesn't take kindly to an arrogant ruling class...not the best choice...