Category Archives: Law

Judicial activism redefined

Posted on by davald

Conservatives have long bashed liberal majorities on the Supreme Court for “judicial activism,” suggesting that their decisions have effectively rewritten laws in opposition to Congress’s intent. A couple of such decision spring to mind: Brown v. the Board of Education and Roe v. Wade.

In these decisions the Court appears to have deduced the original intent or the verities contained in the U.S. Constitution then applied them to modern conditions, perhaps not anticipated by the Founding Fathers. Conservatives objected on the grounds that the law should be narrowly construed, giving effect only to the literal text, as is Justice Scalia’s wont.

Yet, it should be obvious even to a casual observer of recent Court decisions that the new conservative majority is bent on not just repealing Congress’s laws but writing its own. This new strategy is on display in one of the Court’s most egregious decisions, Citizens United.

As originally argued by the lawyer for Citizens United the Court was asked to make a simple answer to a simple question. Was the broadside against Hillary Clinton a “documentary” or a piece of political advocacy. If the former, the lawyers contended, then McCain-Feingold did not apply; if the latter, so be it.

But the die-hard conservatives of the Court—Scalia, Alito, Thomas, and Chief Justice Roberts—have their own agenda, their own opinion of how the country should be governed, and their own ideological views on the nature of democracy and how it should be practiced. With increasing frequency they are joined by Kennedy, who wrote the opinion on Citizens United.

So, what began as a very narrow interpretation of McCain-Feingold mushroomed into a broad rejection of just about any congressional restrictions on campaign contributions. Money, you see, is speech, and since the Constitution bars Congress from enacting any laws that abridge freedom of speech, it follows that Congress cannot restrict either political spending or contributions.

I recommend reading the New Yorker‘s Jeffrey Toobin as he painstakingly describes judicial activism as performed by radical conservatives appointed by presidents. Toobin concludes:

These developments have drawn some criticism, but the Court appears determined to extend the deregulatory revolution that it began in Wisconsin Right to Life and Citizens United. Last year, the Court struck down Arizona’s system of public financing of elections, which the state had passed after a series of political scandals involving fund-raising. The Arizona system gave additional funds to candidates for certain state offices who were being heavily outspent by their privately funded opponents. By the customary vote of five-to-four, with an opinion by Roberts, the Court declared the system unconstitutional. As Kennedy had in Citizens United, Roberts said that governments could never take steps to equalize opportunities for candidates in electoral contests. “ ‘Leveling the playing field’ can sound like a good thing,” he wrote. “But in a democracy, campaigning for office is not a game. It is a critically important form of speech. The First Amendment embodies our choice as a Nation that, when it comes to such speech, the guiding principle is freedom—the ‘unfettered interchange of ideas.’ ” The Roberts Court, it appears, will guarantee moneyed interests the freedom to raise and spend any amount, from any source, at any time, in order to win elections.

Justice sues Apple

Posted on by davald

Before the introduction of the iPad, Amazon had a near monopoly on electronic books, or e-books. Amazon could and did buy in bulk from publishers, then discounted the price to customers, usually at $9.99 an e-book.

When Apple introduced its App Store, the company announced a 70-30 split. Developers were free to charge whatever they wished, but Apple collected 30 percent of the price. So, with the advent of the iPad, Apple duplicated its App Store model: it would allow publishers to set the price for an e-book, and Apple would collect 30 percent. This came to be known as the “agency” model.

Oh, and one more thing. Apple insisted on a most-favored nation clause. The publishers had to agree not to charge a lower price to a competitor, say, Amazon.

Almost immediately the price of e-book rose from $9.99 to a minimum of $12.99. Given the most-favored nation proviso, Amazon was forced to relent; it could not receive lower bulk prices from the publishers, essentially ending its prior advantage.

The Department of Justice launched an investigation, which evidently revealed that publishers were meeting in private to discuss their Amazon problem. Apple’s agency model, they reportedly believed, offered them a way out. The New York Times writes:

The lawsuit said that for at least one year beginning “no later than September 2008,” the chief executives of the publishing companies met once every several months, “in private dining rooms of upscale Manhattan restaurants” to “discuss confidential business and competitive matters, including Amazon’s e-book retailing practices.”

One of the meetings took place in the Chef’s Wine Cellar, a private room at Picholine, a Manhattan restaurant. One of the chief executives “reported that business matters were discussed,” the suit said.

“These private meetings,” the suit alleges, “provided the publisher defendants’ C.E.O.’s the opportunity to discuss how they collectively could solve ‘the $9.99 problem.’ ”

Justice persuaded a few publishers to settle. However, Apple and Macmillan, among others, refused to accept DOJ’s terms. The Times quotes Scott Turow, a lawyer and popular author of law-related novels:

Scott Turow, the president of the Authors Guild, warned in an open letter last month that the Justice Department was “on the verge of killing real competition in order to save the appearance of competition,” he wrote. “This would be tragic for all of us who value books, and the culture they support.”

The emergence of the agency model has steadily eroded Amazon’s market share while increasing publishers’ revenues. The Times reports that Amazon’s share fell from 90 percent to about 60 percent today.

My first reaction to the news of the impending lawsuit was to think that Justice had it wrong. Apple wasn’t fixing the prices; it allowed publishers to set their own price, with Apple taking its cut. On further reflection, the most-favored nation clause strikes me as a form of collusion in that it establishes a minimum price.

Also, the revelation that the publishers were conferring to upend Amazon’s dominance is almost the definition of collusion. After all, we’d be horrified to learn that the major oil companies had secretly agreed to fix retail prices. (Or, in our now-jaded mindsets, perhaps not.)

For its part, Macmillan stopped its negotiations with the DOJ. The Times:

While the publisher had engaged in settlement discussions, “the terms the D.O.J. demanded were too onerous,” said John Sargent, the chief executive of Macmillan.

“After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model,” he said. “We also felt the settlement the D.O.J. wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.”

Ironic. In fighting anti-competitive practices, Justice, should it prevail, could restore Amazon’s monopoly. Should this eventuate, would the DOJ go after Amazon? That doesn’t seem likely, since Justice took no action against the Seattle-based company when it cornered 90 percent of the market.

Interesting, too, that Justice is pursuing this matter, as it refuses to take action against bankers who brought the global economy to its knees. But Apple has a lot more money than even the federal government and most certainly the DOJ. It can afford to retain the best lawyers and frustrate the prosecution for a very long time.

Amazon’s stock rose sharply this morning, before tapering off a bit. Apple’s share price went negative.

Politics as economics

Posted on by davald

Our political system is a duopoly; only two parties call the shots. It will likely stay that way, because vested interests so desire.

A principal interest is the “money-and-media election complex.” As media coverage of elections wanes, increasing revenues flow into the coffers of mostly television stations and networks.

One acquaintance we know who was running for governor of a Midwest state as a Democrat in a general election complained to a TV station manager that his campaign was not getting any news coverage. “You want to get on the air?” the broadcaster replied. “Buy an ad.” Whether intentional or not, commercial broadcasters have little incentive to give away for free what has become a major profit center for them.

That quote appears in a comprehensive look at the “complex” by Robert McChesney and John Nichols. Writing for Monthly Review magazine, the authors report that political advertising is a “bull market.”

The United States is in the midst of its quadrennial presidential election, a process that now extends so long as to be all but permanent. The campaign is also drenched in more money given by a small handful of billionaires than has been the case in the past. Since the 1970s the amount spent on political campaigns has increased dramatically in almost every election cycle. It has led to the formation of what we term the “money-and-media election complex,” which has a revenue base in the many billions of campaign dollars donated annually, and has effectively become the foundation of electoral politics in the United States. Moreover, the rateof increase in campaign spending from 2008 to 2010, and especially from 2008 to 2012, is now at an all-time high.

They tell us that Madison Avenue eventually took control of political campaigns, coinciding with Joe McGinniss’s The Selling of the President in 1969. Pitching a candidate was much like pitching toothpaste, and in advertising repetition works. Message. Repeat. Repeat. Repeat.

The book, which involved McGinniss spending time with Nixon’s television advertising advisors including Roger Ailes during the 1968 presidential campaign, seemed shocking and a sharp departure from the political-driven campaign narratives provided by the likes of White. McGinniss documented how Nixon came to rely upon TV political commercials, based on Madison Avenue marketing principles, as the foundation of his campaign. In the book Ailes presciently concludes immediately after the November victory, “This is the beginning of a whole new concept. This is it. This is the way they’ll be elected forevermore.” It is ironic that today, when one reads the book, it seems downright quaint, even homespun, in comparison to subsequent elections. The liberal McGinniss is able to wander through the corridors of power in Nixon’s campaign like a serendipitous hippie roaming around at Woodstock.

Nor does political propaganda, like commercial advertising, attempt to differentiate products in terms of facts and figures. Watch any television commercial to gain factual data and you will be disappointed. It’s all about attitude and emotion. How do you feel after watching a piece on Product X? Similarly, how do you feel about Candidate Y after watching his commercial?

McChesney and Nichols focus on negative advertising, the emerging staple of political propaganda. The objective is to incense the viewer, making him or her angry at the other guy. This strategy departs from the commercial realm. The reason becomes clear: negative advertising about a competitor’s pickup truck, for example, will engender cynicism about all pickup trucks, even yours. In politics, however, creating cynicism and, better yet, complete voter apathy is a good thing.

Negative advertising can be tremendously effective, a smashing over-the-top boffo success, even if it does not generate a single new voter for the candidate (or supportive independent group) placing the ad. If it simply takes voters leaning toward the opponent and makes them less likely to vote for the opponent, maybe not vote at all, that is a victory. After all the point is to get the most votes and if you lower the number for the opponent, that has the same effect as increasing your own total. Moreover negative advertising can have the delicious side effect of forcing an opponent to respond to charges, no matter how spurious. Negative advertising can amplify spectacularly the classic political move captured by the story of the politician who told his campaign manager to start a rumor that his opponent was a child molester. “But he isn’t a child molester, is he?” responded the aide. “Of course not,” said the candidate, “but I want to hear him deny it.”

With the Supreme Court’s disastrous ruling in Citizens United we ain’t seen nothing yet. The hundreds of millions of dollars accruing in Super PACs will give new meaning to negative advertising.

In the April 2012 issue of Harper’s Magazine editor Thomas Frank tells us that “It’s a Rich Man’s World: How billionaire backers pick America’s candidates.”

While visiting Kansas City last December, I read a local newspaper story lamenting the gradual transformation of Missouri into a reliably Republican citadel—a red state, as we like to say. In the past, I read, Missouri had been different from its more partisan neighbors. It had been a “bellwether” state that “reflected national trends,” rather than delivering votes for any particular party. But now all that was over, and I assumed the article would go on to mourn the death of judicious public reason—the tradition of giving rival arguments a hearing and testing them with that famous “Show Me” skepticism.

I was wrong. Forget the death of open-mindedness. What was actually being mourned that day in the Kansas City Star was a possible loss of advertising revenue by the state’s TV stations. If Missouri was no longer a battleground state, then the two parties and their various backers would no longer fight their expensive electronic war over the airwaves between St. Louie and St. Joe, and “spending on TV ads in the state [would] plummet.”

Franks provides us with a clear example of the “money-and-media election complex.” In tightly contested political races, even at the local level, campaign dollars flow directly to the TV stations. McChesney and Nichols:

Wall Street stock analysts can barely contain themselves as they envision the growing cash flow. “Voters are going to be inundated with more campaign advertising than ever,” one investor service wrote in 2011. “While this may fray the already frazzled nerves of the American people, it is great news for media companies.” “No one loves a good political brawl like a U.S. broadcast company. The fiercer the fight, the more money broadcasters can expect from campaign advertising—particularly in an era when political rhetoric grows more heated every day,” Moody’s Investors Service wrote in a special 2011 report touting media stocks as a good buy. “There are good political years, and then there are years like 2012, when speculative-grade, pure-play television broadcasters expect an unprecedented frenzy of political advertising amid an intense battle for control of both the White House and a closely divided Congress.” As Carl Salas of Moody’s put it, “Virtually all U.S. broadcasters will benefit from spending on political ads in 2012.”

One analyst likened political ads to Christmas shopping for retail outlets. The bulk of television profits are from campaign checkbooks, and it’s easy to see why. There are virtually no costs assumed by the stations; the political ads are already in the can ready for broadcast. And this year, a presidential one, will likely generate massive and record net revenues for TV stations across the country.

It wasn’t supposed to be this way, of course. After all, the airwaves are “owned” by the public. Television networks and local stations receive licenses from the government on the condition that they operate in the public’s interest. One public service envisaged by Congress and the FCC was political coverage. Television was expected to report on electoral issues. But major media have essentially blocked efforts to give effect to the original intent. As mentioned above, if a candidate wants coverage he can pay for it. There is almost zero incentive for television stations to cover campaigns.

McChesney and Nichols conclude thusly:

The U.S. electoral system is wallowing in a sea of money, idiocy, and corruption precisely at the moment the nation’s growing problems demand solutions that work to the benefit of the vast majority of Americans—the 99 percent—who have no role in the current regime except to be manipulated and exploited. This is going to be a defining political struggle going forward, until it is resolved.

Supreme questions

Posted on by davald

The New York Times broke down the Supreme Court justices’ questioning over the three-day hearing on the Affordable Care Act. Unsurprisingly, those justices appointed by Republican presidents revealed their biases as did those appointed by Democratic presidents. The nominal swing vote on the bench, Anthony Kennedy, also a Republican appointee, received most of the attention from each side of the debate, for he could well be the determining factor.

I used the Times‘ data to construct my own simple chart. Who asked the most questions?

The four “red” justices asked 108 questions in total; the four “blue” asked 99. Justice Thomas, as usual, didn’t open his mouth.

We see that Justice Sotomayor stands out as the most voluble of the bunch, even more so than Justice Scalia, who compared health insurance to broccoli.

The Times quoted a 2005 paper of Justice Roberts, wherein he wrote: “…the secret to successful advocacy is simply to get the Court to ask your opponent more questions.”  Here’s the Times graphic (click on it for a larger view):

 

If we look at Kennedy’s questioning, we see that he falls with his conservative brethren, which does not bode well for advocates of the new health care law. On the most crucial issue, whether or not the mandate is constitutional, the numbers don’t look good.

Even though the Times cites research confirming Roberts’s theory, the court could rule in favor of the mandate and leave the Act in place, proving an exception. But as I suggested in my previous post on the topic, this court could also take a quantum leap to declare government taxation unconstitutional, though I’m being a bit facetious—I hope.

Ideology baked in

Posted on by davald

The House of Representatives is currently in the clutches of very conservative Republicans. Yesterday the House passed a conservative budget, which stands little, if any, chance of gaining traction in the Senate. The budget, predictably, is all about cuts to entitlement programs and even lower taxes on the wealthy. Ideology triumphs over compassion. (What an oxymoron that was, “compassionate conservatism.” Today’s definition of conservative is precisely about imposing more suffering on the less fortunate so as to raise the fortunes of the One-percenters.)

Yet, even in the House, ideology gets tested or countered. Nor is it permanent.

Not so in the Supreme Court. Once an ideologue is emplaced, it’s baked in until he or she dies, or can’t hold it any longer while sitting on the bench.

In his column this morning Paul Krugman accuses the conservative Supremes of bad faith and willful ignorance. Krugman:

Let’s start with the already famous exchange in which Justice Antonin Scalia compared the purchase of health insurance to the purchase of broccoli, with the implication that if the government can compel you to do the former, it can also compel you to do the latter. That comparison horrified health care experts all across America because health insurance is nothing like broccoli.

Why? When people choose not to buy broccoli, they don’t make broccoli unavailable to those who want it. But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn’t work, and never has.

I was especially struck by Krugman’s quote of Charles Fried, which comes from an interview with the Washington Post:

“I’ve never understood why regulating by making people go buy something is somehow more intrusive than regulating by making them pay taxes and then giving it to them.”

But you never know. This Supreme Court is capable of leaping from a narrow judgment to an expansive ruling that gives new meaning to judicial activism. I have in mind the decision on Citizens United, which could have been narrowly interpreted, leaving essential campaign restrictions in place. No, these guys (and the conservatives are all guys) opted to use this case to: (a) affirm that corporations are persons; and (b) equate money with speech. Now we have the predictable emergence of “super PACs,” which have no limits on receipts or expenditures, provided the entities keep arms length from particular candidates. Wink. Nod.

This Court, then, could perversely respond to Fried’s argument with a decision that makes government taxation unconstitutional. If everything the government does can be related to broccoli, then surely the ability to tax us is fair game.

Krugman worries:

…But it’s hard not to feel a sense of foreboding — and to worry that the nation’s already badly damaged faith in the Supreme Court’s ability to stand above politics is about to take another severe hit.

The mandate

Posted on by davald

The Affordable Care Act, like “Romneycare,” includes a mandate: all citizens must purchase health care insurance; those who cannot afford to do so will be compensated by government subsidies. Why the mandate? It has everything to do with collective risk and individual costs.

When and to what extent we need medical treatment is subject to a great many variables, including our genetic propensity to certain disease, our diets, how much we exercise, and so on. We could need help tomorrow. Or we may not need to see a doctor for years. Treatment could be nominal or huge. We just don’t know for certain. But very few, if any, of us could endure an entire life without the need for some medical intervention.

We could gamble that we won’t need to see a doctor or visit a hospital and forego buying health insurance. More likely, we’d guess wrong. Then what?

Today there are some 50 million Americans without health care coverage. If they get sick, they either have to suffer through the ailment or, if things get really bad, they go to the nearest emergency room. By then the disease or trauma is so severe that extraordinary medical measures must be applied. These are expensive, far more expensive than a regimen of preventative care that would be covered by insurance. If the person without coverage, typically poor, can’t pay the bill, the burden falls on the rest of us in higher insurance premiums, higher hospital and provider rates, or both.

Ben Franklin appreciated the value in spreading risk. He was one of the co-founders of our nation’s first insurance program, established to insure victims of fires in Philadelphia. Only the very rich could absorb the losses. But fire, especially in urban centers, can easily spread. Nor can all fires be predicted or prevented. One could get lucky. Or not.

Actuarially, getting sick is like becoming a victim of a fire: it’s a matter of probabilities. I buy fire insurance as a precaution. I hope that I will never have to use it. That so many others buy fire insurance, all of our premiums are probably lower than if very few of us purchased coverage. The risks are being spread around.

Washington state law conditions my owning and driving a car on the purchase of car insurance. I cannot legally drive unless I can prove that I have at least minimum liability coverage in case I cause someone else harm as a result of my negligent driving.

I’ve digressed a bit only to suggest that the purpose of insurance is to spread risks and we’re already under insurance mandates. The ACA mandate does not establish a precedent; and it seeks to spread risk, and therefore costs.

Imagine ACA without the mandate. Say you choose not to buy insurance. What happens when you need medical treatment? Would you expect to enroll in the emergency room so that all your bills would be covered? Then after you’re treated and feeling well again, would you expect to be able to drop the insurance?

This wouldn’t work, would it? You’ve hardly contributed enough premiums to cover your hospital costs. Besides, this isn’t how insurance works, whether private or public. And the more people buying insurance the more costs are spread. Thus the mandate.

Ideally we would no longer have private insurance companies. If Harry Truman had his way, we’d have a national health service like Britain’s. You wouldn’t have to buy insurance voluntarily or otherwise, because your government automatically covers you.

But because the ACA is only a modest reform, representing a compromise of competing interests, private insurers continue to provide the bulk of medical insurance. Thus, with or without ACA we have to buy the coverage we want or think we need, mostly from for-profit entities. (I belong to Group Health, a non-profit.)

From the first day or two of arguments before the Supreme Court, the ACA’s mandate may not survive, judging by the conservative jurists’ questions. We could be surprised, but I fully expect Scalia, Alito, Roberts, and Thomas to vote against it. Kennedy, as usual, will no doubt decide its fate, given that he is considered the swing vote on the bench.

All of the justices have splendid health care coverage, by the way, for which they have us to thank. They didn’t have to buy it. It comes with the job. Same for members of Congress.

Disabuse ourselves

Posted on by davald

The notion that the Supreme Court is above politics was most thoroughly eviscerated by the Citizens United decision. The New York Times editors called it at least “naive” and “intellectually dishonest” in the main.

One part of the editors’ opinion stood out for me. It has to do with stare decisis, the time-honored legal principle that binds future courts to precedence. The current court majority tossed that principle overboard on the Citizens ruling. Here’s the Times:

The Roberts court did great damage by abandoning the idea that corporate treasuries can have “corrosive and distorting effects” on the political process if “used to influence unfairly election outcomes” in ways that create “the appearance of corruption in the political arena” — crucial language in a 1990 Supreme Court case that upheld limits on independent spending by corporations and was overturned by Citizens United.

Instead, this court, most preposterously, claimed that unlimited, independent spending…

…does “not give rise to corruption or the appearance of corruption” and “influence over or access to elected officials does not mean that these officials are corrupt” (in the words of Justice Kennedy).

In Citizens United, Justice Kennedy cited James Madison in The Federalist in noting that “factions” in American democracy can be “checked” by ensuring that all of them can speak freely and “by entrusting the people to judge what is true and what is false.” But when outside spending is unlimited, and political speech depends heavily on access to costly technology and ads, the wealthy can distort this fundamental element of democracy by drowning out those who lack financial resources.

Do these guys in robes ever blush? Their decisions would assuredly embarrass the more reasonable among us.

Trayvon died because of a hoodie

Posted on by davald

We’ve got a lot of bizarre people out there, especially those who work for Fox News. Trayvon Martin, 14 years old and unarmed, was shot and killed by a self-professed neighborhood watchman. Here’s Geraldo Rivera:

“I am urging the parents of black and Latino youngsters particularly not to let their children go out wearing hoodies. I think the hoodie is as much responsible for Trayvon Martin’s death as much as George Zimmerman was,” the Fox News host said Friday on Fox and Friends.

Florida passed a ridiculous law in 2005 that not only affirmed the right to protect yourself and your home, with any means necessary, but also added a “stand your ground” provision.

Miami’s chief of police at the time of the legislation warned politicians not to pass the second provision, as it would result in such incidences as the killing of Trayvon Martin. In a New York Times op-ed, he writes:

But I pointed out at the time that even a police officer is held to account for every single bullet he or she discharges, so why should a private citizen be given more rights when it came to using deadly physical force?

To their credit, the Miami Heat donned hoodies before last night’s game to protest the murder and certainly call attention to Rivera’s racist remark. But Fox must love him and the other weirdos that populate the network’s airways.

Is it possible that the single most important factor in the rise of political wackiness is Murdoch’s network? There is no corporate conscience, and no sense of decency.

Facts are only for liberals.

Crazy. What else to call them?

Posted on by davald

Both Paul Krugman and Timothy Egan take on Republican officials in their respective columns this morning. First Krugman:

Stop, hey, what’s that sound? Actually, it’s the noise a great political party makes when it loses what’s left of its mind. And it happened — where else? — on Fox News on Sunday, when Mitt Romney bought fully into the claim that gas prices are high thanks to an Obama administration plot.

This claim isn’t just nuts; it’s a sort of craziness triple play — a lie wrapped in an absurdity swaddled in paranoia. It’s the sort of thing you used to hear only from people who also believed that fluoridated water was a Communist plot. But now the gas-price conspiracy theory has been formally endorsed by the likely Republican presidential nominee.

Apropos of my post on railroads and brains, Krugman reminds us of conservative pundit George F. Will’s comment: “…the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.” My argument reverses the causal order. I suggested that widespread use of trains won’t happen in America unless we jettison our individualism in favor of collectivism, understanding that the whole can exceed the sum of its parts.

Egan focuses on our state next door, Idaho.

Let’s take a tour of the church lady state to date. Our nation may soon turn its lonely eyes to Idaho, where Gov. Butch Otter could have the final say on a bill that would order women to undergo a medically unnecessary and invasive procedure before deciding to end a pregnancy.

This is the latest version of the mandatory ultrasound law, recently enacted by Virginia and Texas. But the Idaho bill, which passed the State Senate on Monday in a one-party Republican state, goes much further, and would subject many women to invasive, trans-vaginal inspections.

Notice how the GOP reflexively wrap themselves in the American flag while proclaiming “freedom.” Yet when it comes to women, especially, the party deigns to function as a police state, forever following you into the bedroom and the bathroom. Yuck.

Good theater. But downright scary politics, with real implications.

America’s trajectory

Posted on by davald

Now, in their new book, “Why Nations Fail,” [Daron] Acemoglu and his collaborator, James Robinson, argue that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy. It’s an idea that was first raised by Smith but was then largely ignored for centuries as economics became focused on theoretical models of ideal economies rather than the not-at-all-ideal problems of real nations.

— Adam Davidson, New York Times

(Source above chart, pdf)

Wealth inequality in the U.S. is at its highest level since the 1920s. Most of the income gains over the last several decades have gone disproportionately to the top ten percent of households. Meanwhile, wages for the Rest of Us have either stagnated or declined in real terms. By the definition above, America is not all that wealthy. (Source for chart below)

History records that those nations with extreme income imbalances generally fail. Is the U.S., then, doomed to failure?

Since the future of American economic health lies in its people, Acemoglu explained, as long as Americans believe they can influence the process, they will.

Do you still believe that you can influence the political process? Is voting sufficient? Or have the rich become so wealthy that they overwhelm anything the Rest of Us do?