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OpEdNews Op Eds    H2'ed 11/19/16

Will the United States become a "managed democracy"?

By       (Page 1 of 2 pages)   7 comments
Message Jean-Luc Basle

Democracy is the government of the people, by the people, for the people. Inequality is the confiscation of people's wealth by the elite. The two are incompatible. In this face-off between the many and the few, one of the two has to give. Will it be the people or the oligarchy? Democracy or an "illusion", a "managed democracy"? This is the juncture the United States is at.

A threatened democracy

The United States is a democracy. Its constitution is the embodiment of the Enlightenment principles: habeas corpus, the rule of law, the balance of powers, etc. Americans are bound together by it as much as they are by their history and dreams. The constitution stood the test of time, including the Civil War and the 1929 Great Depression. Lately, however, executive, congressional and judicial dispositions are chipping away at it.

For all intents and purposes, Congress relinquished its constitutional right to declare war to the president. The Patriot Act is an attack on civil liberties, so are the National Defense Organization Act, the Amendments to the Foreign Intelligence Surveillance Act and the Stop Online Piracy Act. The Supreme Court's decision -- Citizens United vs. Federal Election Commission -- considerably reinforced the power of the lobbies. In Utah, the National Security Agency built a gigantic data center whose purpose is to have every American under surveillance. These laws and decisions were enacted in the name of the "Global War On Terrorism". Yet, the terrorists this war is supposed to fight are creatures of the American government, dating back to the Soviet invasion of Afghanistan.

In "Testing theories of American politics", Martin Gilens and Benjamin Page observe that "economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence". American medias are controlled by six major corporations. This presidential campaign has been financed by 158 wealthy families. These developments and others threaten the American democracy.

Growing inequality

A large middle class is the bedrock of democracy. The American middle class has been shrinking for several decades. The United States is the third most unequal country in the world in terms of income distribution, behind Chili and Mexico, according to the OECD. Today, the pay of an American CEO is over 260 times that of a worker while it was only 24 times in 1965. The top 1% earns 19% of total income -- a figure two and a half times larger than that of 1970. The 2015 median family income is inferior to its 1999 level. The 20% richest own 90% of the country's wealth while 13.5% of the Americans live below the poverty line. More than half the population is likely to experience poverty in their lifetime. Middle class revenues are lower and more volatile than ever before. This together with a lack of suitable jobs explain much of the anxiety the middle class feels today. Adding discouraged workers and long-term unemployment to the Bureau of Labor's statistics, the rate of non-working people is twice as large as the official figure, exceeding 10%. Higher education to prestigious colleges which was the embodiment of the American dream, the way out of poverty, is now the preserve of the wealthier classes. People are trapped.

Donald Trump's message: "Make America great again" is aimed at this anxiety and helplessness Americans feel. Will it meet their expectations? Unlikely. Offshored jobs will not come back. Migrants will not be sent back home. Peoples' best hope for jobs is his $1.000 billion infrastructure project. In its 2013 Report card, the American Society of Civil Engineers estimated the United States must invest $3.600 billion in the next seven years to repair and upgrade the country's infrastructures. Trump's objective is quite realistic, even modest. Over a seven year period, it amounts to less than 1% of GDP per year. Will it be enough? Unlikely. Will its effect be felt by the mid-term election? Certainly not. By the end of his first mandate? Yes, but insufficiently to ensure his re-election.

An old unresolved tax issue may be a godsend. For many years, American corporations have accumulated untaxed income abroad in an amount estimated at $2.600 billion. Congress has been quarreling over this for years. It is now prepared to compromise. If so, Trump could offer a one-time tax break to corporations willing to repatriate the money. This would comfort financial markets' positive reaction to his election and give a welcome boost to the economy. What other levers does his have?

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Former Vice President Citigroup New York (retired) Columbia University -- Business School Princeton University -- Woodrow Wilson School

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