Look at these two graphs. They illustrate the two Americas.
The first shows the ratio between employee compensation to gross domestic product in the United States. It is at its lowest point in history.
The second shows corporate profits. They are at an all time high.
These graphs mark the end of America's social contract, according to economist Steen Jakobsen. The agreement between the ruled and the rulers is broken and marks the rise of heretofore "fringe" candidates like populist Donald Trump and socialist Bernie Sanders.
This may be why new polling shows little taste for such measures as increasing the charitable deduction on taxes paid by wealthy individuals and corporations. In a time when clearly the rich keep getting richer, voters have become skeptical of letting those rich direct how their potential tax dollars are spent instead of leaving it up to "democratically" elected legislative bodies. New research by writers such as Jeremy Beer and others suggests why this is so -- and we will be examining Beer's findings in depth next week -- but for now, just consider this passage:
"Even though it sits on $42 billion in resources, and despite the fact that homelessness is one of its strategic areas of concern, the Gates Foundation will not provide direct assistance to any of the displaced people sleeping outside its $500 million Seattle headquarters... modern philanthropy is more concerned with problem solving than with people, more invested in 'high modernist ideology' than in particular human beings... contemporary philanthropy seems more enamored of generic anthropos than of the flesh-and-blood poor we encounter face-to-face. Indeed, twenty-first century philanthropy seems allergic to charity."
Many have noticed the deeply undemocratic, narcissistic nature of the twenty-first century rich. They worship at the altar of a high church peculiar to themselves. Charity becomes a form of self-worship.
The celebrity Bono, reportedly worth $600 million, is a world-class tax avoidance artist who off-shores his business enterprises to avoid paying taxes while he operates a charity, called the One Campaign, that lobbies governments to use the tax money of working people to do what Bono wants done. Meanwhile Bono links his for-profit musical tours with One Campaign initiatives and derives free positive publicity that translates into increased sales. The One Campaign has been criticized for "using only 1.2% of their funds for charitable causes." in response, the One Campaign admitted that it "does not provide programs on the ground but instead is an advocacy campaign for their funding."
They left out that they also make Washington, DC insiders rich with consulting fees. One such insider is Sue McCue, the Rutgers University Governor who runs the Democrat Party SuperPAC that is responsible for collecting the heads of GOP Assemblywomen Donna Simons, Caroline Casagrande, and Mary Pat Angelini; and Assemblyman Sam Fiocchi.
The One Campaign's latest initiative was the Electrify Africa Act, signed into law by President Obama on February 8, 2016. Money from the One Campaign created an Astroturf campaign that collected 360,000 names in support of the Act and a twitter-based lobbying effort aimed at Congress. One Republican opponent of the legislation noted: "American taxpayers spend more than $40 billion per year on foreign aid... Given America's out-of-control deficits and accumulated debt that threatened our economic future, I cannot justify American taxpayers building power plants and transmission lines in Africa with money we do not have, will have to borrow to get, and cannot afford to pay back."
It was also attacked from the Left, with one prominent critic writing in the Huffington Post that "the Electrify Africa Act has merely demonstrated that Congressmen neither know much about nor have a plan for Africa's energy industries."
Increasingly, average Americans are noticing how rich corporations devalue the democratic process and how their corporate charitable arms are just an extension of their public relations lobbying. For example, the elected Legislature of the State of Georgia recently passed legislation designed to protect "religious freedom." In response, some unelected but very rich Hollywood types protested what the elected Legislature had done. Hollywood was joined by Big Business, in what has become an almost annual ritual (Arizona, Indiana...) to threaten and bully a Governor and convince average Americans that corporate money is more powerful than citizens' votes. Reporting on the Georgia Governor's veto of a bill he had formerly supported, the Associated Press wrote:
"Within days of its passage, Coca-Cola and other big-name Georgia companies joined prominent Hollywood figures urging Deal to reject the proposal. The Walt Disney Co., Marvel Studios and Salesforce.com threatened to take their business elsewhere. The NFL said it would be a factor in choosing whether Atlanta hosts the 2019 or 2020 Super Bowl."
Until last year, this same NFL called itself a tax-exempt non-profit organization and used its charity status as an excuse to get taxpayers to build its stadiums. If anyone wants to know why people give up and quit voting, this sorry episode is it.
But something has happened and it shows itself in more ways than just Donald Trump and Bernie Sanders. People are done putting up with it. As Mike Griffin of the Georgia Baptist Mission Board said, "We're not going to quit. We definitely don't want to have Gov. Deal listening to Wall Street and Hollywood over the citizens of the state of Georgia who expect him to support religious liberty."
A conservative Baptist attacking Wall Street? Looks like the old Republican coalition is starting to break up. When it does, we can't imagine who is going to support all those business tax breaks.