Let’s try to get more precise. America’s super rich aren’t ‘buying’ our elections. They’re making an ‘investment’ in prosperity. Their own.
And so what have Americans learned from the now-concluded 2010 mid-term election campaign, aside from the existence of an Aqua Buddha?
Not much. In fact, given the gap between the severity of our current national economic crisis and the substantive emptiness of this fall’s campaigning, we have may just experienced our most inane election season ever. The level of our political discourse has probably never, at least in modern times, been lower.
The level of cash spent on our electioneering, meanwhile, has never been higher. This year’s federal mid-term contests will likely eat up an all-time record $4 billion. That’s enough, says the watchdog Center for Responsive Politics, to “treat each and every American to a Big Mac and fries.”
This $4 billion, we ought to keep in mind, doesn’t include any of the cash spent on this year’s plentiful gubernatorial and state legislative races. The nation’s overall campaign expenditure total will likely top $5 billion. And even this figure understates the massive cash deluge cascading over the American body politic.
None of the campaign spending totals, for instance, include the $108 million spent by “independent groups” to advertise against the health care reform legislation — after that legislation’s passage last March.
Where’s all this cash coming from? Certainly not from average Americans. With unemployment still near double-digits and consumer confidence running at record lows, most Americans simply don’t have any cash to spare.
Some 53 percent of Americans, the Washington Post reported last week, say they now worry “about not having enough money” to pay their rent or mortgage. That shouldn’t be surprising. The middle fifth of American households, note Census data released in September, averaged only $49,534 last year, over $2,000 less than these households averaged in 2007, after adjusting for inflation.
Not all Americans, of course, are worrying about their wallets. America’s awesomely affluent have survived the Great Recession quite comfortably. But we didn’t know exactly how comfortably until midway through last month, when officials at the Social Security Administration released the first detailed official federal data on how the nation’s wealthy fared in 2009.
The nation’s wealthy, the new data show, fared just fine. And the wealthiest of the wealthy, the same data show, fared fantastically.
Americans who took home over $1 million in paycheck income in 2009 averaged over $2.3 million, the Social Security wage data indicate. Americans who made over $50 million in paycheck income in 2009 did spectacularly better. Even with the Great Recession, the 72 Americans who took home over $50 million worth of paycheck dollars last year ended up averaging over $84 million each. Together, these 72 enjoyed a $6.1 billion payday in 2009.
These super rich actually pocketed considerably more than $6.1 billion in personal income. The Social Security Administration data only cover income subject to Medicare payroll tax. Left uncounted in these data sets: income our rich make buying and selling stocks and bonds and other assets, as well as other flavors of investment income ranging from rent to dividends and interest.
In other words, the new Social Security wage data don’t tell us anything about the earnings of hedge fund managers and other Wall Street investment superstars who report the bulk of their income as capital gains. The top-earning 25 of these hedge fund managers, Alpha reported earlier this year, collected $25.3 billion from hedge fund operations in 2009, an average of over $1 billion each.
How much in total personal income did these 25 hedgies pull in last year? We won’t have any official data on the total 2009 incomes of the nation’s highest-earners until midway through next year. That data will come from the IRS.
But here’s what we do know about how much cash our super rich stashed away in 2009, America’s worst year economically since the 1930s: The 72 Americans who show up at the top of the new wage data list and the 25 other Americans who top the hedge fund list together took home $31.4 billion last year.
These 97 ultra rich could have footed the entire $5 billion 2010 election campaign bill, out of their 2009 earnings, and still have, on average, over $220 million each left over from all the loot they stuffed into their pockets last year.
How much did these 97 ultra rich actually plow into the 2010 mid-term elections? We don’t know — and likely never will. The Supreme Court’s Citizens United ruling last January, as public interest analyst Charlie Cray notes, has “opened the floodgates” for “front groups wishing to keep their funders anonymous.” In effect, says Cray, “a powerful ‘shadow party’ has emerged on the conservative right.”
This shadowy network has no trouble whatsoever raising millions from America’s wealthy. For these wealthy, political contributions offer a return few other investments can match.
Hedge fund kingpins, for instance, have so far whacked aside every legislative effort on Capitol Hill to end the “carried interest” loophole, the tax code provision that lets hedgies claim the bulk of their income, for tax purposes, as a “capital gain.” This loophole last year saved the top 25 hedge fund earners an average $200 million each.
And the 72 Americans who reported over $50 million each on their w-2s last year? By refusing to undo the George W. Bush tax cuts for the rich, after George W. left office, lawmakers saved these 72, on average, almost $4 million each in 2009.
If deep pockets like these wealthy Americans emerge victorious in this November’s elections, House speaker Nancy Pelosi warned last month, “it would mean we are now a plutocracy.”
In truth, the United States has already become a plutocracy. Maybe someday we’ll have a political party with enough spunk to stand up and openly fight it.
Note: The original of this story included Social Security Administration data that have since been corrected. The story above reflects the SSA corrections.
Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up to receive Too Much in your email inbox.