The Concentration of Political and Economic Power by Illegitimate Means;
The Beginnings of Elite Rule

In the United States, the twentieth century culminated with a concentration of political and economic power in the hands of political and financial elites.

Political Power

After the Civil War the concentration of political power in the federal government began in earnest in the 1930s under a Supreme Court appointed by Franklin Delano Roosevelt. That court held that the Article 1, Section 8 of the Constitution, which gave Congress a "power to regulate Commerce among the several States" was in fact a grant of unlimited power for Congress to regulate anything, anywhere. See, e.g. Wickard v. Filburn, 317 U.S. 111 (1942). [1] [Congressional power to control wheat grown on private citizen's land for his own consumption].

The centralization and expansion of federal judicial power came later. Starting in the 1960s, the Supreme Court held that the First Amendment's prohibition of Congress from establishing a particular religion meant that State and local governments could not allow expressions of Christian belief in any public setting, e.g. Abingdon School District v. Schempff 384 U.S. 486 (1966) (prohibiting prayer in public schools). Carried to its logical extreme, which it was, this counterfeit constitutional principal required the deChristianization of the United States and effectively led to the establishment of atheism as our national religion.

The Court also claimed that the Bill of Rights projected certain "emanations" and "penumbras" that created a "right to privacy." The Court used the "right to privacy" to revolutionize State and local laws pertaining to contraception, marriage and abortion. [Griswold v. Connecticut, 381 U.S. 479 (1965); Roe v. Wade, 410 U.S. 133 (1973)

Despite powerful institutional support and early momentum, voters ultimately rejected the feminist "Equal Rights Amendment" to the Constitution. Not to be deterred, the Court interpreted the Constitution's equal protection clause to require all governments to adopt the feminist agenda anyway. [Craig v. Boren, 429 U.S. 190 (1976)]

In the 1990s, the Court opined that the Constitution's Equal Protection Clause prevented a State's Constitution from prohibiting preferential treatment for homosexuals. [Romer v. Evans, 517 U.S. 620 (1996)].

In short, the Court has asserted the power to legislate social policy, no matter what the Constitution happens to say.

The intellectual corruption of the Supreme Court was soon matched by the financial corruption of a near omnipotent Congress, whose only remaining check on its power was that same Supreme Court.

Plenipotentiary power meant that every economic issue was "fair game" for congressional legislation. Congress could now solicit bribes from almost every special interest group, and threaten those who refused to contribute. Various moneyed interest groups accepted this invitation, Among these was Red China, which received U.S. military secrets in exchange for cash contributions to both Democrats and Republicans. [2]

As the bribery process has usurped the democratic process, an already weakened Congressional responsiveness to citizens' concerns has faded away to nothing. The theoretical "two party system" is now a "one party system" in which Democrats and Republicans agree on major political and economic issues, and pretend to disagree on the remainder. For example, both parties agree on "free trade," massive immigration, Federal Reserve control of salaries and wages, no enforcement of anti-trust laws, favorable tax treatment for investment income and gift/inheritance income compared to income from labor, interventionist military policy, even welfare reform. The parties pretend to disagree about labor interests and "social issues," i.e. issues removed from the political process, like abortion.

Economic Power

The extensive bribery of Congress has also removed the last, substantial barrier to the concentration of economic power, to wit, antitrust laws and their enforcement. The 1990s was the decade of the "megamerger," with $1.6 trillion in mergers in 1997 alone. [3] Almost all mergers managed to survive the supposedly tough scrutiny of the "Justice Department," whether in Democratic or Republican administrations. Wayward attempts to enforce antitrust laws were crushed. When New York State Attorney General Dennis Vacco opposed the NYNEX and Bell Atlantic merger in 1997, the feds stepped in, overruled Vacco and approved the merger.

During the 1990s, the only entity known to encounter an antitrust "problem" was Microsoft Corporation. Microsoft had grown large by outperforming its competitors. Microsoft never had to ask the government's permission to merge with anyone, and therefore never had to "lobby" or buy "access" to any Washington politicians. As Microsoft grew more and more successful, many in Congress, the "Justice Department" and the federal courts decided that Microsoft was violating the antitrust laws, and an antitrust suit was brought. Mavericks like Bill Gates are often oblivious or naive to the real costs of doing business in a corrupt political environment. Then, the industry woke up. Starting in 1998, campaign contributions from Microsoft (and its competitors) swelled mightily, helping the computer/software industry to climb from nowhere to number 8 on the list of most campaign contributions by industry. [4] Microsoft's antitrust "problem" began to evanesce. Microsoft won its federal appeal in 2001 and appears to have bought peace with the Bush Justice Department.

Federal tax policies have also enhanced the concentration of economic power by taxing labor at higher rates than capital. During the 1990s, taxes on investment (capital gains tax) were reduced; taxes on wealth transfers (estate/gift) were abolished. During the same decade, taxes on wages and salaries (income from labor) increased. In 1996, federal income, payroll, state and local taxes reached 40% of the average family's income, a historical record.

Federal immigration policies further devalued labor, continually weakening its bargaining position relative to capital. Salaries and wages, adjusted for inflation, declined every year from 1976 to 1996. Studies attribute the decline to immigration and the loss of manufacturing jobs. [5] In 1998, while the stock markets were overheating, a record 677,795 layoffs were announced. Placement firms attributed the record layoffs to the recent wave of corporate mergers. [6]

Formation of Elites and Perpetuation of Power

The centralization of political power in the federal government has led to a perpetuation of that power in the hands of a particular group of persons, best described as "elites." The House of Representatives is but one example, where centralization of power enables 98.5% of incumbents to be re-elected. Perpetuation of power is even more obvious in the federal judiciary, where federal judges are openly said to be appointed for life, even though the Constitution says they shall "hold their Offices during good Behavior." [7] Less obvious examples are the executive agency bureaucrats, whose tenure in office is protected by civil service "career" status. In practice, this often leads to "lifetime" appointments. Another example is the unelected Federal Reserve Board of Governors, whose current chairman, Alan Greenspan, has held office for fourteen years.

When given more power, human beings quite naturally use it to secure and improve their own position - which is why Lord Acton did not say: "Power tends to purify." Thus the centralization of power in the hands of a few ineluctably enables those holding power to keep it.

The centralization and perpetuation of power in elites has allowed them to form an elite culture. For decades, elites have regularly congregated at Klaus Schwab's World Economic Forum and David Rockefeller's Bilderberg Conference. Elite culture is a belief system that justifies and perpetuates government by elites; it is quite naturally hostile to traditional, middle-class values. [8]

When power must be transferred, such as in the case of death or retirement, the existence of elite culture allows the transferor to select a recipient who has already been imbued with beliefs and values of the elite world-view. The transferor is thereby assured that the recipient will use the power to protect the transferor's belief system and social position. Because of elite culture, a seamless transition of elite power can be conducted as one generation gives way to the next.

[2] John Huang's cash contributions to the Clintons are well-documented. Another example is House Armed Services Chairman Curt Weldon, R-Pa., who received $170,000 from the same corporations indicted for contributing money to Clinton. "The Strange Bedfellows of China PNTR", Tom Flocco and WorldNetDaily, 5/19/2000.

[3] Bloomberg News, 1998, based on SEC data compiled by Bloomberg Analytics.

[4] Industries with the Largest Contributions, 1990-2000, http://www.opensecrets.org

[5] Economic Policy Institute press release, 1/18/2000

[6] Associate Press 12/26/2001, Report: Most U.S. Layoffs in Years, based on data from Challenger, Gray & Christmas

[7] United States Constitution, Article 3, Section 1.

[8] "The new elites, the professional classes in particular, regard the masses with mingled scorn and apprehension..." Middle America- a term that has both geographical and social implications, has come to symbolize everything that stands in the way of progress: "Family values", mindless patriotism, religious fundamentalism, racism, homophobia, retrograde views of women" - Christopher Lasch, Revolt of the Elites, p. 28-9, W.W. Norton & Company, 1995.