The Powerful make rules that benifit themselves, by John Havelock of the Anchorage Daily News

Well written editorial by local writer.   Very pertinent in relation to the Gospel and Amos texts for this Sunday. John Havelock is a former Alaska attorney general and UAA (University of Alaska, Anchorage) professor of justice and always a excellent source of well written and well thought out articles.

We achieve wealth not only out of effort and personal virtue, but from holding, by luck or inheritance and sometimes skill, key positions that engage the cooperation of other people in the context of the legal system for creating and distributing wealth. This system has swung seriously out of kilter in the last dozen years. This rearrangement in the distribution of American national income is contributing to the recession and is having profound effects on the nature of our society.

In 2009, the average annual income of each of the top 10 hedge fund traders was in excess of a billion dollars. That's just the hedge fund traders. Other people made comparable sums from some aspect of our economy.

This maldistribution of income is going on year after year. Between 2002 and 2007, the top 1 percent of income earners saw their income double. The top 10 percent within that 1 percent saw their incomes triple. If you were wondering where your income went, well, it went to the creation of two whole new classes, the superrich and the unbelievably rich. At the same time, the middle class has seen wages falter or fall and the class of those categorized as poor has expanded dramatically. The impact of this new stratification is changing the nature of our society and, even if adjustments are made, will last for generations.

While some of the expanded wealth of the wealthiest is used in the economy with resulting trickle-down in jobs, etc. (yeah, sure), most of it has gone to consolidating power -- buying up competition, enlarging the share of the already wealthy in the property of the country.

Shares of the nation's wealth are distributed, in profits to owners, in wages and bonuses to employees, through the use of product and through taxes to cover social purposes defined by legislation and appropriation.

Asking those who have benefited the most to pay the most for the common good is surely only reasonable.

We tend to assume that our economic system operates as a free market -- that is, one operating subject only to rules of supply and demand. We conclude accordingly that supply and demand require the existing distribution of wealth. This is far from the case. Markets themselves work within guidelines and structures that are politically determined and enacted into law, often distributing benefits with little reference to supply and demand. There are also gaps in this system.

In the gaps in the law, the powerful create new rules that benefit power. Among the worst of the most recent rules is the rule that corporations can now buy political power through election contributions without limit. This just makes a very bad situation worse. As the Anchorage Daily News has reported, most of Sen. Lisa Murkowski's campaign funds come from corporate interests that have a stake in her congressional committee work The financial support for Joe Miller's tea party, tracked to its roots, is also coming from the rich, particularly the billionaire Koch brothers.

In the midst of war, President G.W. Bush enacted a big tax cut, benefiting especially the rich. It expires with the end of the year. In the context of our wealth distribution system, the idea that tax cuts for those making more than a quarter-million a year should continue so the billionaires can keep more of their money is, well -- nuts.

In the first decade or two after World War II, tax rates went up the more you made. You could still make a billion a year but you only got to keep a few hundred million, still enough to fly around in private planes among your mansions, yacht etc. ... The graduated income tax kept incomes from going crazy at the top. No longer.

As long as enough money is spent to bamboozle a majority of the public to vote against its interest, it seems this system must continue, a class war by the rich against everyone else. Maybe, contrary to Lincoln's famous quote, you can fool most of the people all the time.

But let's hope Lincoln was right.


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