How the Rich Stole Our Money - and Made Us Think They Were Doing Us a Favor

By David Atkins, Salon

04 May 14

 

Pushing people toward stocks, real estate and credit cards have all come at a cost -- and with one goal in mind

f you’ve paid attention to the economy over the last few years, you’ve doubtless seen the charts and figures showing the decline of the American middle class in concert with the explosion of wealth for the super-rich. Wages have stagnated over the last 40 years even as productivity has increased, which is another way of saying that Americans are working harder but getting paid less. Unemployment remains stubbornly high even though corporate profits and the stock market are at or near record highs. Passive assets in the form of stocks and real estate, in other words, are doing very well. Wages for working people are not. Unfortunately for the middle class, however, the top 1 percent of incomes own almost 50 percent of asset wealth, and the top 10 percent own over 85 percent of it. When assets do well but wages don’t, the middle class suffers.

This ominous trend is particularly prominent in the United States. That shouldn’t surprise us: study after study shows that American policymakers operate almost purely on behalf of wealthy interests. Recent polling also proves that the American rich want policies that encourage the growth of asset values while lowering their own tax rates, and are especially keen on outcomes that favor themselves at the expense of the poor and middle class.

So why isn’t the 99 percent in open revolt? The answer lies in part because the top 1 percent have done an excellent job disguising the upward transfer of wealth by making the rest of us feel better off than we actually are while enriching themselves in the process.

To understand how they accomplished this, we have to realize that the peculiarities of American politics and culture do not tell the whole story. The trend toward greater hoarding of wealth by economic elites and shrinking middle-class incomes is not limited to the United States. It is present to one degree or another throughout the industrialized world. The self-interested preferences and self-serving ideology of the super-rich surely have influence, of course, but it also seems clear that a broader range of factors and economic policy decisions come into play. And indeed they do. The current inequality crisis has its roots in a series of decisions made in response to the inflation shocks of the 1970s and to the growing threat of globalization and workforce mechanization.

Simply put, starting in the 1980s policymaking elites in the Western world were scared to death of oil shortages, inflationary spirals and the impact of jobs being shipped to lower-wage nations or made obsolete by increasingly powerful machines and computers. Something had to be done. Even as foreign policy became explicitly focused on securing access to oil, domestic policy became focused on quashing inflation while disguising wage stagnation. Either countries needed to move sharply to the left through increased worker protections and redistribution of incomes, or to the right by substituting an asset-based economy for the old wage-based economy. Most chose to go right — an understandable move at the time given that state Communism was still a threat to capitalist economies, but also a spent and discredited ideology. Ronald Reagan best made the case for the new economic model in a speech from 1975:

Roughly 94 percent of the people in capitalist America make their living from wage or salary. Only 6 percent are true capitalists in the sense of deriving income from ownership of the means of production …We can win the argument once and for all by simply making more of our people Capitalists.

One of the chief ways that American and British policymakers put this vision into reality was by crippling organized labor. But while that certainly placed downward pressure on wages in the U.S. and Britain, labor was not so similarly affected in most of the rest of the developed world. Organized labor remains a powerful force throughout most of Europe, yet growing wealth inequality and a declining middle class are present trends there as well. The health of organized labor abroad has helped stem the tide, but has not managed to stop it. The less noticed but potentially more consequential way that policymakers across the industrialized world set about accomplishing this goal was to push their middle classes to invest their wealth into assets, especially stocks and real estate, then use the levers of public policy to inflate the values of those assets in order to disguise the inevitable declines in wages. There was also a concerted effort to hide wage losses by lowering the prices of non-perishable goods — even if doing so meant domestic job losses. These goals were accomplished in several ways:

1) Push people away from defined-benefit pensions and into stocks and 401(k)s. Believe it or not, there used to be a time when the Dow Jones and S&P 500 indices were little-noticed figures in the business section of the newspaper. That’s because most people’s retirements weren’t tied to the stock market. The switch from pensions to market-based 401(k)s helped change all that. Moving employees into 401(k)s did more than just reduce the obligated burden on corporate bottom lines. It also helped goose the growth of the financial sector upon which the ultra-wealthy depend for their passive incomes. This was not an accident. Combined with the Reagan-era excesses and the explosion of the tech bubble, suddenly Wall Street was hot popular culture, and the nation watched breathlessly as the health of the Dow Jones was commonly equated with the health of the overall economy. The share of GDP taken by the financial sector grew from 2.8 percent in 1950 to 8.4 percent and rising as of 2006, and financial sector profits account for nearly a third of all corporate profits in America. As a broader sector of Americans watched their meager stock portfolios rise, they weren’t as concerned with the slow growth of their regular wages. Only lately has the damage done to retirement security by moving from defined benefits to uncertain stock markets started to become more widely known.

2) Push more people into buying real estate, and increase home prices by all means possible. Rates of homeownership increased most dramatically in the 1940s to 1960s, creating the first major bump in housing prices. However, the period between 1960 and 1975 saw home prices decline slightly when adjusted for inflation. The government used the levers of public policy to encourage greater homeownership and reduce interest rates. Big business and wealthy interests pushed through Wall Street deregulation during the Reagan and Clinton eras, which not only boosted the stock market but also allowed large banks to make unprecedented money off of home loans. The end result was that wealthy landlords and asset owners got much richer while rents increased and wages declined, but most Americans didn’t feel the pinch because rising home values made them feel rich on paper until the Great Recession. After the financial crisis, policymakers have done everything in their power to boost both stock and home prices through quantitative easing, 0 percent interest rates, and increased homeowner incentive programs.

3) Democratize consumer debt, especially through credit cards. Americans born after 1975 don’t remember a world before the widespread use of credit cards. But it used to be that if a regular member of the public couldn’t pay his or her bills, debt wasn’t usually an option. But that wasn’t usually a huge problem, either: Because jobs were plentiful and wages had more buying power against the cost of living, most Americans didn’t need credit cards. Revolving credit used to be the province of capitalists, not of wage earners.

Though Diner’s Club cards originated in the 1950s, the charge cards as we know them today were truly born and popularized in the mid-1970s and early 1980s – not coincidentally the same time as Wall Street deregulation, 401(k) transitions and the birth pangs of the real estate boom. The boom in popular credit had two major effects: to enrich the same financial services companies whose success disproportionately benefits the wealthy, and to disguise and soften the effects of stagnant wages.

4) Reduce the cost of goods through free trade policies. The same decades that produced the previous trends also saw the implementation of free trade agreements like NAFTA. It is commonly understood today that these treaties benefit wealthy stockholders while reducing jobs in developed nations. But their less-discussed effect was also to reduce the price of many consumer goods made overseas, which in turn helped to disguise wage stagnation.

All of these moves toward increasing the value of assets do directly benefit the wealthy. But more important, they have served to create a more purely capitalist society, hide the decline of the middle class and mitigate public discontent over stagnant wages. There are many problems with this, of course. The first is that the vast preponderance of wealth will accrue to the very top incomes in an economy where assets inflate while wages deflate. The second is that a purely asset-based economy is bubble-prone, deeply unstable and given to sharp and painful boom-bust cycles. The story of the last half-decade is in part the removal of the blindfold that has been hiding wage losses over the last half-century. Housing prices have skyrocketed beyond the ability of most people under 40 to afford, even as household debt nears record highs. Nearly half of Americans have no retirement savings at all, while much of the rest of the developed world faces a pension obligation crisis.

The tools policymakers have used to distract the public from the raw deal of low wages are no longer working. And that may more than anything else help usher in a new era of populist progressivism in the U.S. — if, that is, the Democratic Party can shift itself away from reinforcing the asset-based economy toward rebuilding a sustainable model that encourages wage growth and a strong labor market.

Oklahoma Torture Death Is Only Part of What's Wrong

By William Boardman, Reader Supported News

04 May 14

 

Oklahoma “justice” is lawless – is there a name for that condition?

irst, let us stipulate that the horrendous death of Clayton Lockett at the hands of Oklahoma state authorities on April 29, 2014, was an unconstitutional state murder of a murderer that should not have happened.

Further, let us stipulate that widespread outrage at the barbarity of this particular state murder is fully justified (even if such outrage may be an evasion of outrage at state murders that go smoothly).

With those stipulations in mind, let us consider the possibility that personal outrage at the vicious killing of Clayton Lockett, in all its emotional purity, tends to deflect, or even substitute for, equally appropriate outrage at the less personal but hardly less important self-evisceration of Oklahoma government.

There’s nothing more to be done to or for Clayton Lockett. Focusing on him and how he died, while proper enough, may well serve to distract people from looking at the massive state failure that produced an execution so monstrous that its perpetrators quickly felt the need to hide it from the witnesses whose right and duty was to see what was done in their and all Oklahomans’ names.

There should be a word or phrase for that kind of public policy disaster, where virtually no Oklahoma institution or authority performed with democratic or human decency. Although hardly unknown elsewhere, the Oklahoma outbreak is a particularly virulent, almost clinical example of what might be called “state sponsored anarchy.”

As a concept, state sponsored anarchy is an oxymoron. A state is, by definition, supposed to be the opposite of anarchy. But in Oklahoma it was the state, through almost all its agents, that perpetrated anarchy of which the state murder was the climax, but far from the final act. This reality is oxymoronic in itself and is aptly described as state sponsored anarchy.

To be fair, Oklahoma’s state sponsored anarchy didn’t come easy

After 23-year-old Clayton Lockett murdered 19-year-old Stephanie Neiman on June 3, 1999, Oklahoma’s initial, official response was to go through the predictable and appropriate steps of arrest, jury conviction, sentence, and a judicial appeals process that included the U.S. Supreme Court's declining to hear the case in 2003 (and again in 2014). The facts of the case appeared so indisputable that, even though a federal court acknowledged that “Lockett’s trial counsel did not present a defense” and Lockett said he was not allowed to participate in his own defense, this was not sufficient to persuade any court to overturn the verdict. What seems to have been reasonable state and federal due process appeared to come to a logical end on January 13, 2014, when the Oklahoma Court of Criminal Appeals set an execution date of March 20 and left a guilty man on death row with no apparent options but executive clemency from the governor.

Recommending against clemency, Oklahoma attorney general E. Scott Pruitt filed a 33-page case summary, saying among other things that: Clayton Lockett’s guilt was never in doubt. He confessed and expressed no remorse. The case included evidence of Lockett characterizing himself as “the most dangerous type of criminal” and “an assassin.” Mitigating evidence included testimony from five family members that Lockett’s mother abandoned him at age three, that his father was a drug user who abused his son, that his father taught him to steal and punished him if he got caught, and more details of a horrific childhood. The medical assessment of Lockett included post traumatic stress disorder, but no finding that he was insane at the time of the murder.

Oklahoma later postponed Lockett’s March 20 execution date, not for any reason of law or clemency, but because Oklahoma was having difficulty acquiring the drugs it wanted to use to kill him. The issue – whether using the drugs caused “cruel and unusual punishment” prohibited by the Constitution – gained urgency in Oklahoma after a prolonged execution in January 2014 during which Michael Wilson writhed and said, “I feel my whole body burning.”

During the years that Clayton Lockett’s case was running its futile appeals course, death penalty states like Oklahoma were facing increasing difficulty getting the drugs that comprised their method-of-choice for state killing. As more civilized parts of the world came to view the death penalty as a primitive barbarity, nations and companies made these medically useful drugs increasingly unavailable for American executions. This began to make states like Oklahoma act like addicts, so desperate for their next death fix that they became willing to try anything to keep it secret.

In Oklahoma, as controversy had grown over what the state was injecting into people to kill them, the legislature didn’t react by requiring that execution drugs be regulated, tested, identifiable, reliable, or otherwise used with transparency and efficacy. The legislature had passed a law in 2011 allowing the state to keep the identities of drug providers secret, thereby effectively keeping elements of its lethal drug cocktails secret from victims and their attorneys, from the courts, and from the public. The legislature, in other words, had enacted state sponsored anarchy.

And the governor had signed off on state sponsored anarchy.

State sponsored anarchy doesn’t always pass constitutional muster

Oklahoma County district judge Patricia Parrish wasn’t buying the state’s arguments. On March 26, 2014, ruling on a challenge to the law by death row inmates Clayton Lockett and Charles Warner, she found the 2011 state law unconstitutional. In her view, the state’s legislative and executive branches were deliberately violating the U.S. Constitution, in particular the constitutional right to due process of law, which a “veil of secrecy” makes impossible, or as she put it: “I think that the secrecy statute is a violation of due process because access to the courts has been denied.” The judge, who said, “I do not think this is even a close call,” was defending state sponsored accountability.

During the hearing before Judge Parrish, Assistant Attorney General Seth Branham said, "This is all just speculation piled upon hyperbole. What is the point of having the information if there's nothing you can do with it?" He warned the judge that she was "treading into some deep water,” apparently implying that there was no stopping this state sponsored anarchy.

[Judge Parrish is an elected judge who may or may not find state sponsored anarchists coming after her at the polls. She is up for re-election in 2014, but as matters now stand, because no opponent met the filing deadline, under Oklahoma law she is an unopposed incumbent who will be automatically re-elected without appearing on the ballot.]

The Oklahoma attorney general promptly appealed Judge Parrish’s ruling to the Oklahoma Supreme Court, which had already, on March 13, referred a motion for stay of execution to the Oklahoma Court of Criminal Appeals [Oklahoma has, in effect, two supreme courts, one for criminal, the other for civil matters, at least in theory].

On April 1, the state revealed the ingredients of their lethal cocktail, but refused to disclose the source of those ingredients, precluding any meaningful assurance that the drugs would meet proper Federal Drug Administration (FDA) standards for pharmaceutical quality. Currently that assurance is impossible in Oklahoma, since one or more of the Oklahoma drugs is being provided by a compounding pharmacy, an entity that is not as effectively federally regulated as a drug manufacturer. And FDA regulation had already been found wanting by the U.S. Court of Appeals for the D.C. circuit in July 2013, when a three-judge panel found unanimously that the FDA “acted in derogation” of its duty under law to assure the quality of drugs imported from abroad for use in lethal injections for state killings in Arizona, California, and Tennessee. So here was Oklahoma struggling to maintain its state sponsored anarchy through a bogus argument that had already been found wanting by a federal court ruling against the FDA’s own state sponsored anarchy on the very same issue.

Oklahoma fell apart with unusual and speedy spectacularity

Following the Oklahoma Supreme Court’s direction, the inmates’ attorneys asked the other supreme court, the Oklahoma Court of Criminal Appeals, to issue a stay of execution until the first supreme court could rule on the state’s appeal of Judge Parrish’s finding that the Oklahoma law on lethal injections was unconstitutional. On April 9, the criminal appeals court refused to issue a stay, saying in effect that it had no authority to issue a stay, since the relevant case was before the other supreme court, not the criminal appeals court. That appears to reflect Oklahoma’s longstanding, structural form of state sponsored anarchy.

On April 17, the Supreme Court of Oklahoma reiterated its initial position, by a 7-2 vote, that issuing a stay was up to the other supreme court. The majority emphasized “the gravity of the first impression constitutional issues” inherent in the appeal of Judge Parrish’s decision; one of the dissenters wrote, “I find absolutely no ‘gravity’ in the Appellant’s claims.” The next day, the other supreme court, the Oklahoma Court of Criminal Appeals, voted 3-2 to reiterate its position that there was nothing it could do to halt the execution of Clayton Lockett (which was then scheduled for April 22). In the dissent joined by a second judge, Vice Presiding Judge Clancy Smith wrote, in part:

“I would grant a stay to avoid irreparable harm as the appellants face imminent execution. I would do so in consideration of the appellants’ right, to avoid the possibility of a miscarriage of justice, and in comity with the Supreme Court’s request for time to resolve the issues pending before it.”

On April 21, opting to preserve the constitutional question before it was made moot by the state’s rush to kill, the Oklahoma Supreme Court voted 5-4 to stay Lockett’s execution, issuing its order at 5:30 p.m. Within hours, Oklahoma governor Mary Fallin, a Republican, denounced the justices for acting “outside the constitutional authority” of the court and stated: “I cannot give effect to the order by that honorable court."

On April 22, Attorney General Pruitt filed a motion asking the Supreme Court to remove the stay. The attorney general’s office said in a statement: “We hope the Supreme Court will recognize the gravity of the constitutional crisis created by their actions and resolve the jurisdictional battle by denying the request for stays of execution.” The court voted 6-3 to leave the stay in place.

Executive defiance of judicial orders generally bodes no good

Then the governor issued an executive order that allowed for a one-week stay, but also set April 29 as the new date for killing Clayton Lockett, thereby partially affirming and essentially overruling the Supreme Court. Fallin’s order raised stark separation of powers issues by asserting executive authority over the judiciary. Disturbing the traditional balance of power this way, even in a state with two supreme courts, surely is an exercise of state sponsored anarchy.

A former legal counsel to two Republican governors in Oklahoma, Stephen Jones, told The New York Times “that both the attorney general and the governor were wrong about the Supreme Court’s authority and that they might be opening themselves to contempt charges.” Jones said: “The Supreme Court is the highest judicial authority of this state. This is political exploitation of unfortunate murder cases, and the governor is inviting a confrontation that, in the end, she will lose.”

Lawyers for the condemned inmates told the Times “that it would be a travesty to carry out the executions before the challenge on lethal drugs was resolved.” They were right, and it was a travesty.

Justifying her action, Fallin’s executive order implied that the governor was the final authority on the meaning of Oklahoma’s constitution, saying in part:

“While I have great respect for the honorable men and women of the Supreme Court, this attempted stay of execution is outside the constitutional authority of that body. I cannot give effect to the Order by that Honorable Court and remain consistent with my oath of office to uphold the Constitution. However, out of extreme deference to the Supreme Court, I will hereby exercise my constitutional authority….”

And then impeachment came before the Oklahoma Legislature

One might expect such an assertion of executive authority over a supposedly independent judiciary to be challenged, perhaps by impeachment. And in fact, a legislator did initiate an impeachment proceeding – against the five Supreme Court justices who had voted to stay the execution long enough to settle the constitutional question raised by Judge Parrish less than a month earlier.

On April 22, Rep. Mike Christian introduced a three-page resolution of impeachment against the five justices, calling their vote to stay the executions “a violation of the oath of office because it constitutes a willful neglect of duty and incompetence within the meaning” of the Oklahoma Constitution. He also said: “This is a case of our state’s judges inserting their personal biases and political opinions into the equation.”

Christian is a Republican and former Oklahoma Highway Patrol trooper. In 2010, Christian was one of many subjects of a criminal investigation into political corruption. The investigation progressed for about six months until Oklahoma attorney general Drew Edmundson, a Democrat who served 16 years in the office, convened a grand jury in August 2010. Term limits forced Edmundson out of office and the investigation appears to have ended inconclusively under his Republican successor, E. Scott Pruitt. Rep. Christian is on record as wanting to deny birth certificates to children born in the United States if their parents are “illegal aliens” (which would likely be unconstitutional under the 14th Amendment), so this impeachment bid is not Christian’s first effort to promote state sponsored anarchy.

Faced with an intransigent governor and a potential legislative lynch mob, the Supreme Court’s five principled members utterly collapsed. On April 23, the court issued a 9-0 decision that lifted the stay it had granted just two days earlier and, without addressing the most fundamental factual or legal issues, took 10 pages of empty legalese to decree that Judge Parrish was wrong and the state’s lethal drug secrecy was constitutional, giving no coherent reason for reaching their conclusions. Under obvious, public duress, the Oklahoma Supreme Court abandoned any pretense of principle and rendered a decision satisfactory to mob rule and state sponsored anarchy.

Despite the court’s complete collapse on the issue of their “impeachable” votes to stay an execution, Rep. Christian continued to push for impeachment of the five justices whose votes displeased him. On April 24, he also said: “I realize this may sound harsh, but as a father and former lawman, I really don't care if it's by lethal injection, by the electric chair, firing squad, hanging, guillotine, or being fed to the lions…. I look forward to justice being served.” On April 28, Christian was on Fox News still pushing impeachment and looking forward to the next day’s execution, and everyone now knows how well that went. It was a triumph of state sponsored anarchy.

Will the means of killing a murderer obscure the means of killing justice?

Who knows, maybe this will all result in serious, actually humane reform, but what are the odds? Here are a few somewhat random straws in the wind:

• The reason Oklahoma used an unusually small amount of the first execution drug was that the state’s supply is limited and officials wanted to be sure to have enough of the drug for all the other state killings they want to carry out.

• Governor Mary Fallin appeared to have a come-to-Jesus moment after the fact, when she said, “I also believe the state needs to be certain of its protocols and its procedures for executions and that they work.” If she’d believed that any earlier, maybe the state would have exercised due diligence in sorting through the issues, or the state might even have used enough of their drugs to kill Lockett “humanely.” But that goes against state sponsored anarchy.

• In the early morning of the day of his death, prison guards tasered Clayton Lockett for resisting medical protocol, according to Oklahoma’s official timeline. Subdued by force and taken to the medical unit, Lockett was then found to have “a self-inflicted laceration to his right arm” that didn’t need stitches but was otherwise unexplained. Mid-morning, Lockett refused food. Late afternoon, Lockett “visits with mental health personnel.” Then a doctor looked for somewhere to stick an intravenous line into Lockett, “No viable point of entry was located” for half an hour or more, “then went to the groin area,” and after 51 minutes, “insertion process is complete.” At 6:23, “Shades in execution chamber are raised.” “Midazolam is administered … offender was still conscious … Vercuronium bromide is administered … Potassium chloride is administered …” At 6:42, “Shades lowered …” Officials learn that not enough drugs were administered to cause death, not enough drugs remained to cause death, Locket was alive and unconscious. At 6:56 “Director calls off the execution.” Ten minutes later, “Doctor pronounced Offender Lockett deceased,” no further detail. The Director recommended “an external investigation” as “more credible.”

• Governor Fallin initiated “an independent investigation,” without appointing any independent investigators.

• Rep. Mike Christian, continuing to exemplify the opposite of his namesake, issued an unintentionally self-contradictory and darkly comic statement in which he said in part: “The botched execution of Lockett last night was unfortunate, but… He’s an absolute monster. Did Lockett’s execution go as planned? No. Did it inflict unnecessary pain on the prisoner? That’s debatable…. I believe – above all else – that the rule of law must be followed and that the punishment fit the crime. We are a nation of laws. When those laws are violated, swift and just punishment should be the end result.” If he actually believed that, he could not have behaved as he has.

• The mother of the victim said on MSNBC after Lockett died that she had opposed his killing and opposed the death penalty. Lockett’s aunt and foster mother quietly said she was all right with it.

• The day after Lockett died, President Obama’s press secretary said that the president “has long said that while the evidence suggests that the death penalty does little to deter crime, he believes there are some crimes that are so heinous that the death penalty is merited. In this case, these cases, the crimes are indisputably horrific and heinous. But it’s also the case that we have a fundamental standard in this country that even when the death penalty is justified, it must be carried out humanely.” As if that’s possible, as if the death penalty isn’t the antithesis of “humane.” It’s not the drugs, it’s the death penalty – and the death penalty, especially as administered in the United States, is quintessentially state sponsored anarchy.

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William M. Boardman has over 40 years experience in theatre, radio, TV, print journalism, and non-fiction, including 20 years in the Vermont judiciary. He has received honors from Writers Guild of America, Corporation for Public Broadcasting, Vermont Life magazine, and an Emmy Award nomination from the Academy of Television Arts and Sciences.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.