The System

1. The American system has been rigged by an oligarchy

Oligarchy is good only for oligarchs.

Concentration of wealth and power. Over the past four decades, a small group of wealthy individuals and corporations have gained unprecedented influence over American politics and the economy. This oligarchy has used its growing power to shape laws, regulations, and policies in ways that further increase its wealth and influence.

Consequences for average Americans:

• Stagnant wages for most workers
• Erosion of labor protections and unions
• Reduced social mobility
• Increased economic insecurity
• Weakened democracy as policy reflects elite preferences

Key players: Wall Street banks, large corporations, billionaires, and their political allies have worked together to tilt the system in their favor, often at the expense of the broader public interest.

2. Wealth concentration has led to a power shift in politics

As income and wealth concentrate at the top, so does political leverage.

Money in politics. The increasing concentration of wealth has allowed the ultra-rich to exert outsized influence on the political process through campaign contributions, lobbying, and control of media narratives.

Impacts on democracy:

• Politicians increasingly responsive to wealthy donors
• Public policy skewed towards elite interests
• Erosion of faith in democratic institutions
• Reduced political power for average citizens

Evidence: Studies show that the preferences of average Americans have little to no impact on policy outcomes, while those of economic elites are strongly correlated with policy changes.

3. Corporate focus on shareholder value has harmed workers and communities

The job of management is to maintain an equitable and working balance among the claims of the various directly affected interest groups...stockholders, employees, customers, and the public at large.

Shift from stakeholder to shareholder capitalism. Starting in the 1980s, corporations moved away from balancing the interests of all stakeholders (workers, communities, customers) to focus almost exclusively on maximizing shareholder returns.

Consequences:

• Mass layoffs and plant closures
• Wage stagnation and benefit cuts
• Abandonment of local communities
• Short-term thinking at the expense of long-term investment
• Increased inequality as gains flow to shareholders and executives

Example: General Electric under Jack Welch epitomized this shift, slashing its American workforce while boosting stock prices and executive compensation.

4. Wall Street deregulation exacerbated economic inequality

The repeal of Glass-Steagall transformed the American system, turning Wall Street into a giant and unfettered betting parlor.

Financial deregulation. The dismantling of Depression-era financial regulations, culminating in the repeal of the Glass-Steagall Act in 1999, allowed Wall Street to engage in increasingly risky and speculative activities.

Consequences:

• 2008 financial crisis and Great Recession
• Taxpayer-funded bank bailouts
• Millions of Americans lost jobs, homes, and savings
• Further concentration of wealth as banks emerged larger and more powerful

Revolving door: The close relationship between Wall Street and government regulators contributed to lax oversight and a system that privatized gains while socializing losses.

5. The working class feels betrayed by both political parties

Democrats don't have a 'white working-class' problem. They have a 'working class problem' which progressives have been reluctant to address honestly or boldly.

Bipartisan neglect. Both Democrats and Republicans have failed to address the core economic concerns of working-class Americans, focusing instead on cultural issues or the interests of their wealthy donors.

Working class grievances:

• Stagnant wages and reduced benefits
• Job insecurity due to globalization and automation
• Declining social mobility
• Feeling culturally and economically left behind

Political consequences: This disillusionment has fueled the rise of populist movements on both the left (Bernie Sanders) and right (Donald Trump), as voters seek alternatives to the establishment.

6. Racism and xenophobia are symptoms of economic frustration

Racism was not, and is not, the underlying cause. However much the oligarchy may want Americans to believe that racism was responsible for Trump, in fact it was anti-establishment fury.

Economic roots of social division. While racism and xenophobia are real problems, their recent resurgence is largely driven by economic insecurity and a sense that the system is rigged against ordinary people.

Scapegoating: Politicians and media figures have exploited these economic anxieties by directing anger towards immigrants, minorities, and other marginalized groups rather than addressing the underlying systemic issues.

Importance of economic justice: Addressing wealth inequality and restoring faith in economic opportunity is crucial for reducing social tensions and countering the appeal of divisive rhetoric.

7. Oligarchies maintain power through ideology, bribery, and division

The three most common are: (1) systems of belief—religions, dogmas, and ideologies—intended to convince most people of the righteousness of the oligarchy's claim to power; (2) bribes to the most influential people to gain their support and thereby legitimize the oligarchy; and (3) manufactured threats—supposed foreign enemies or "enemies within," as well as immigrants and minority populations—to divert attention from the oligarchy so the diverse elements within the majority won't join together against it.

Ideological control. The oligarchy promotes beliefs like "market fundamentalism" to justify extreme wealth concentration and oppose government intervention.

Co-opting elites: Well-paid professionals in law, finance, and academia are incentivized to defend the status quo rather than challenge it.

Divide and conquer: By stoking cultural and racial divisions, the oligarchy prevents the formation of a unified movement for economic justice.

8. Democratic reform is needed to overcome oligarchy

The way to overcome oligarchy is for the rest of us to join together and win America back.

Systemic change required. Addressing inequality and restoring democracy will require fundamental reforms to reduce the influence of money in politics and rebalance power between corporations, workers, and communities.

Key areas for reform:

• Campaign finance reform
• Stricter antitrust enforcement
• Strengthening labor rights and unions
• Progressive taxation to reduce wealth concentration
• Improved public education and social services

Building a coalition: Success depends on uniting diverse groups around a common agenda of democratic and economic reform.

9. Young, diverse Americans offer hope for positive change

I've been teaching for almost forty years, and I've never taught a generation of students as dedicated to public service, as committed to improving the nation and the world, as is the generation I'm now teaching.

Demographic shifts. The increasing diversity of younger generations and their commitment to social justice provide a counterweight to entrenched power structures.

Signs of progress:

• Record numbers of women and minorities elected to office
• Growing support for progressive policies among young voters
• Increased activism and civic engagement
• Shifting cultural attitudes on issues of equality and inclusion

Long-term optimism: While current challenges are significant, the arc of American history shows a pattern of progressive reform following periods of inequality and social tension.

Last updated: November 14, 2024