January 17, 2023

By Thom Hartmann

The Hartmann Report

“We must make our choice. We may have democracy, or we may have
wealth concentrated in the hands of a few, but we can’t have both.”
— Former US Supreme Court Justice Louis Brandeis

We’re told by the Declaration of Independence that our nation was formed to provide every citizen with the basics of what government can and should provide:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”

The “governed” in today’s America, however, aren’t getting the “happiness” they want or even, frankly, that they need:

— Poverty and homelessness stalk our land: more than one-in-seven Americans live in poverty today
— Millions have no access to affordable healthcare and families suffer over 500,000 medical bankruptcies every year
— Higher education is increasingly just for the well-born and well-off
— Most non-unionized workers have few rights and little say in the workplace: only 10.8 percent of non-government American workers have a union
— Cynicism about politicians is so widespread that only 62 percent of Americans eligible to register to vote have even bothered to do so
— Our wealthiest pay virtually no taxes: For example, America’s richest man, Jeff Bezos, paid less than 1 percent and NBC reports “The 25 richest Americans paid little to no federal income taxes…”

To contrast, citizens of other wealthy democracies generally have:

— Lower rates of poverty (Finland 5.7%, Denmark 6.5%, Ireland 7.4%, Belgium 8.1%, Netherlands 8.3%, France 8.4%, Norway 8.4%, Canada 8.5%, Sweden 8.8%, etc.),
— A national health care system, so nobody goes bankrupt because somebody in the family got sick (51 countries have national systems)
— College at little to no cost (Denmark, Norway, Finland, and Sweden pay their young people to go to college: the monthly stipend paid to students in Denmark, for example, is $1,078/month; over 10,000 US students are currently attending college in Germany for free, and Americans can also attend college for free along with locals in France, Iceland, Norway, Finland, Sweden, Slovenia, and the Czech Republic)
— Widespread unionization (Iceland 89.1%, Sweden 81%, Denmark 74.5%, Finland 74.2%, Belgium 56.6%, Norway 53%, Slovenia 44.2%, Israel 37.7%, Austria 36.9% etc. [2000 stats])
— More eligible citizens registered to vote (Sweden 80.3%; Belgium, New Zealand, South Korea, Denmark, Australia, Iceland, Netherlands and Taiwan all in the mid-70% range, etc. [2022 stats])
— Rich people who pay their taxes (very top income tax brackets [federal, state, and local] are over 50% in Japan, Denmark, France, Austria, Canada, Portugal, Belgium, Sweden, Finland, Israel and Slovenia and above 45% in Netherlands, Korea, Ireland, Germany, Italy, Australia, Iceland, Luxembourg, and Spain according to the OECD)

So, how did America become the outlier? Why do other countries have extensive and functioning social safety nets and wealthy people who pay their taxes, and we have neither?

In a nutshell, it goes back to Republicans on the US Supreme Court legalizing political bribery — by both the morbidly rich and corporations — in the 1970s and doubling-down on it with Citizens United in 2010, as I lay out in The Hidden History of the Supreme Court and the Betrayal of America.

Rich people and corporations, with the Court’s blessing, pay politicians to drill so many holes in our tax code that it resembles Swiss cheese. They then use the money they save in taxes to further corrupt those same politicians to gut the social safety net.

Every Republican in the Senate, for example, wanted to maintain a multi-billion-dollar-a-year tax loophole for hedge fund and private equity executives. The US Senate would have ended it last year with a provision in the Inflation Reduction Act, until Wall Street showered over $2 million, according to CNBC, on Senator Kyrsten Sinema — who then went to the mat for the industry and blocked that part of the tax reform.

Sinema’s sellout was reported in the media, but America basically shrugged: when everybody’s a crook, nobody’s a crook. This sort of corruption has serious consequences, however: among other things, it produces massive and conspicuous income and wealth inequality.

The research on the relationship between inequality and criminal activity is pretty exhaustive, albeit poorly publicized, and the simplest explanation is among the most easily understood: we humans are wired to rebel against unfairness.

Unfairness thus destroys social trust, and a lack of social trust opens the door to crimes against society ranging from burglars stealing things from your home to politicians taking campaign contributions bribes in exchange for legislation.

At some level, we all know this. Walk into a preschool class and give one child a pile of cookies while giving everybody else only one each and see what happens. In fact, it’s not just humans; this holds true across all social mammalian species from rats to dogs to apes. 

As research across 33 nations published in Oxford’s European Journal of Public Health found, inequality devastates social trust among people, opening the door to everything from more street crime to the corruption of political parties and systems.

Political corruption isn’t sweeping other advanced democracies the way it is America because in those countries political bribery is still illegal. None have a Supreme Court filled with Republicans as corrupt as ours.

Thus, the very wealthy families and giant corporations are appropriately taxed and those nations’ social safety nets are intact.

Research published in the Oxford Economic Papers in 2014 found that not only does inequality cause increases in crime (I’d argue including political corruption), but the main variable is people’s perception of inequality: When the morbidly rich are conspicuous in their consumption, crime explodes faster than when they’re discreet.

“Using variation within US states over time, we document a robust association between the distribution of conspicuous consumption and violent crime,” authors Daniel and Joan Hicks noted.

A 2000 study published in The Review of Economics and Statistics (Harvard/MIT) came to the same conclusion: inequality causes criminal activity, not just poverty.

The World Economic Forum published a paper in 2014 looked at the relationship between inequality and crime in Mexico:  

“Our key finding is that, in fact, municipalities with lower inequality saw lower rates of crime,” the authors write. “In other words, while the overall national data reveals an apparent paradox; broken down by smaller geographical regions, the paradox does not hold — less economic disparity does lead to less crime.”

A study of 148,000 people across 142 countries found a similar association all over the world.  The Economist magazine titled their review of it: 

“The stark relationship between income inequality and crime.”

Research published by the Equality Trust in the UK, which studies the impacts of economic and social inequality, found: 

“Small permanent decreases in inequality — such as reducing inequality from the level found in Spain to that in Canada — would reduce homicides by 20% and lead to a 23% long-term reduction in robberies.”

Inequality produces crime — from burglaries to corrupt politicians — because it destroys social trust, the core fabric of any society. It essentially makes us crazy.

And ever since Republicans on the Supreme Court legalized political bribery in 1976/1978, setting the stage for the Reagan Revolution, our social trust — our social fabric — has been rapidly unraveling.

Without social trust, empathy and shared values weaken and culture begins to disintegrate. Conspiracy theories abound as people desperately try to make sense of a world that seems so terribly unfair. Qanon, for example, becomes the new normal.

It wasn’t always this way in America. Following the Nixon bribery scandals of the early 1970s, for example, Congress passed strong campaign finance laws, reducing the power of big money in politics.

Those were some of the very laws the Court struck down in 1976, 1978, and 2010. But our efforts to stop political corruption started way before Nixon.

Back in 1910, former President Teddy Roosevelt gave a speech in Osawatomie, Kansas telling Americans that if we didn’t take on the morbidly rich, they’d bring democracy to its knees.

“The Constitution guarantees protections to property, and we must make that promise good,” Roosevelt told the crowd. “But it does not give the right of suffrage [voting] to any corporation.”

Corporations, in other words, are not people, Roosevelt said. It was common sense back then, although, as Mitt Romney famously pointed out, the Supreme Court fully turned that on its head in 1978 with their Bellotti decision.

As long as corporations and the morbidly rich were able to interfere in elections and throw massive amounts of money at candidates, Roosevelt told his crowd, America would remain locked in a crisis of plutocracy.

The only answer, he said, is to “prohibit the use of corporate funds directly or indirectly for political purposes,” and hold wealthy CEOs and corporate officers “personally responsible when any corporation breaks the law.”

The federal government was neither taxing giant corporations, massive inheritances, nor any other aspect of the lives of the morbidly rich, and that failure, Roosevelt said: 

“[H]as tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.”

The crowd roared with approval, and word traveled across the country. Within a decade the Constitution was amended — Congress could pull it off because political bribery was still illegal — so we got a federal income tax on the morbidly rich, a corporate income tax, and an inheritance tax all within a few years.

Roosevelt also got the Tillman act passed in 1907, which made it a federal crime for any corporation to give any money or support of any kind to any candidate for federal office. Penalties included prison time for corporate CEOs, senior executives, lawyers, and lobbyists.

The result was the birth of the largest and fastest growing middle-class in the history of the world.

Americans not only knew that Teddy Roosevelt was right; they saw the evidence of growing oligarchy all around them and rejected it. Both parties had become populist when it came to protecting democracy from political bribery.

America chose democracy, and soon elected FDR to the White House four times, then followed that with Harry Truman, Dwight Eisenhower, and John F. Kennedy: all maintained a top 91% personal and 48% corporate income tax rate.  

Throughout those years — before the US Supreme Court legalized political bribery in 1976/1978 — Congress passed laws that reflected what the average working people of our nation wanted, and paid for it all, in part, with those taxes on the morbidly rich:

— Social Security 
— the minimum wage
— unemployment insurance
— world class public schools
— nonprofit requirements for hospitals and health insurance companies
— free to very inexpensive state colleges
— the right to unionize
— civil rights and voting rights legislation
— publicly-owned utilities
— new highways and airports
— quality mass transit
— anti-trust laws to maintain competition and protect small businesses
— Medicare
— The EPA
— Medicaid
— school lunch programs and “food stamps” 
— workplace nondiscrimination for women and racial minorities
— tax-deductibility for interest payments on car loans and credit cards
— federal deposit insurance to protect people from bank failures
— Head Start
— literally hundreds of laws that protected consumers and the environment from corporate predation and dangerous products.

As Michael Hiltzik notes in his book The New Deal: A Modern History, just one of FDR’s programs, the Works Progress Administration (WPA), used that top 91% personal and 48% corporate income tax bracket to rebuild America from top to bottom:

“The WPA produced, among many other projects, 1,000 miles of new and rebuilt airport runways, 651,000 miles of highway, 124,000 bridges, 8,000 parks, and 18,000 playgrounds and athletic fields; some 84,000 miles of drainage pipes, 69,000 highway light standards, and 125,000 public buildings built, rebuilt, or expanded. Among the latter were 41,300 schools.”

Republicans, representing the interests of the morbidly rich, opposed all of it. As did the Republicans on the Supreme Court who began unraveling the New Deal as early as the 1970s.

The Court formally struck down the Tillman Act in 2010 with their Citizens United decision. Since then, CEOs and executives no longer fear jail when they bribe politicians.

But an even worse side-effect of the Supreme Court legalizing political bribery has been the explosion of great wealth at the top — inequality — that has directly pushed the collapse of the American middle class and the weakening of American democracy.

The middle class has fallen from about two-thirds of us to fewer than half of us, and even at that it takes two incomes to maintain a lifestyle a single income could support before Reagan. 

As the headline at TIME Magazine reads about the period from the beginning of the Reagan Revolution to today: 

“The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%—And That’s Made the U.S. Less Secure”

Inequality has exploded: the morbidly rich now have so much cash slopping around that they’re using their pocket change to shoot themselves into outer space on giant penis-shaped rockets, and build luxury survivalist bunkers that resemble small underground cities.

And most all of it tracks back to five corrupt Republicans on the US Supreme Court saying there’s nothing wrong with billionaires and giant corporations handing wads of cash to legislators and elected judges — local, state, and federal — in exchange for the laws, rulings, regulations, and tax rates they want.