The rich and powerful run the show

May 5, 2014

Miami, Florida

Dow down 45 on Friday. Gold up over $1,300. Nothing much happening.

Meanwhile, we had no proof. Just an observation. But it looks to us as though government always begins and ends as a tool for those who control it. It is not the product of a 'social contract.' It is not an expression of the 'general will.' It is not the 'price we pay for civilization.' It is not 'captured by wealthy special interests.' On the contrary, it is as blunt and stupid as a crow-bar...used by the elite to pry wealth, status and power away from everyone else.

Few victims of the public school system believed us, but now cometh a study from Princeton and Northwestern universities proving we were right. UPI reports:

    WASHINGTON, April 16 (UPI) -- WASHINGTON, April 16 (UPI) -- Oligarchy is a form of government in which power is vested in a dominant class and a small group exercises control over the general population.

    A new study from Princeton and Northwestern Universities concluded that the U.S. government represents not the interests of the majority of citizens but those of the rich and powerful.

    "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens" analyzed extensive data, comparing nearly 1,800 U.S. policies enacted between 1981 and 2002 with the expressed preferences of average and affluent Americans as well as special interest groups.

    The resulting data empirically verifies that U.S. policies are determined by the economic elite.

    "The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence," says the peer-reviewed study.

Yes, dear reader, the elite run things. That's why we have QE (quantitative easing), for example. The banking cartel is perhaps the most powerful trade group in America. Its oligarchs want to make a profit, naturally. How better to do so than to lend themselves money for practically zero interest. Then, they can use the money to, say, lend to the US government at a substantially higher rate. Everybody wins, right? The feds get the money they need to continue handing out billion-dollar contracts for things we really don't need...and the banks earn a comfortable margin on money they never had. Hey, and maybe the 'wealth effect' will drip a few shekels onto the poor schmucks who think their votes decide things.

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One of the most special of special interests in America is the military/security industry. When the feds ran low on money they decided to cut the Pentagon back a bit (why not...we have no enemies worth least none that we don't create ourselves). That was the famous 'sequester' arrangement worked out by the bunch of hacks and slacks who call themselves 'Congress.' Rather than actually agree to cut spending, Congress decided to let the budget cut the future.

Well, the future is here. And here comes Paul Ryan with a budget designed to put the military/security industry back in high cotton. Ron Paul describes it:

    "The Republicans are using the old DC trick of spending less than originally planned and calling that reduced spending increase a $5.1 trillion cut in spending. Only in DC could a budget that increases spending by 3.5 percent per year instead of by 5.2 percent per year be attacked as a "slash-and-burn" plan. Last week's budget debate showed how little difference there lies between the parties when it comes to preserving the warfare-welfare state. One side may prefer more warfare while the other prefers more welfare, but neither side actually wants to significantly reduce the size and scope of government."
Adds Jon Utley of American Conservative magazine:
    The former chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, said "the greatest threat to our national security is our debt." In the final analysis Ryan is not a leader, he's just another puppet of the military industrial complex. If he really cared about American defense he would take up some of the many ways to stop wasting money and make America truly stronger and more competent.
But now we know. There is nothing wrong in Washington. There is nothing we can fix. No one is making a mistake. This is just the way government operates...rewarding the people who control it, and punishing all others.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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