Who Controls
the United States of America?
By
Victor Sperandeo with the Curmudgeon
Introduction:
Most people would answer the leadership of the
Democratic and Republican Parties.
Lets examine that belief and then see who really is in control of the
Unites States of America. Well then
move on to discuss related topics, including examples of overwhelming
speculation and acceptance of unprecedented risks in financial markets.
Congress, Lobbyists, and Political Contributions:
Most Congressional representatives listen to their
leadership. If not, they dont get to be the head of important committees, get
campaign financing, or political endorsements and so may not get re-elected.
In reality, political parties tend to vote in unison
and act more like gangs than individual representatives for their districts,
states and for the people that voted them into power.
Corporations and industry groups, labor unions,
single-issue organizations, collectively spend billions of dollars each year to
gain access to elected officials and decision-makers in government. Their motive is to
influence the thinking and actions of politicians. That happens because the political and
economic power that creates company profits and causes winners and losers is in
large part determined by Congressional legislation.
Ever since Citizens United v. FEC allowed
corporations to spend an unlimited amount of money in American elections, large
companies injected unprecedented sums into congressional and presidential
candidate election campaigns. At the same time, transparency eroded as
"dark money" groups, keeping their sources of funding secret, emerged
as political powerhouses.
The intent of most of those large corporate
contributions was to erode competition and strengthen monopoly power [1.].
For example, Alphabet (the parent company of Google)
spent $27,739,455 on political donations
and $8,850,000 on lobbying in 2020 vs $12,780,000 in 2019. Microsoft donated $20,920,628, AT&T
spent $13,266,403, while Amazon coughed up $12,759,813 in 2020.
Note 1. Historically, competition was the enemy of
both Robber Barons (prominent U.S. businessmen in the late 19th century
who had become rich through ruthless and unscrupulous business practices) and Communist
Dictators (like Fidel Castro who condemned competition).
Personal note: I receive about 10 solicitations per day from
the GOP through emails and texts asking for money. One never knows what they will do with the
money requested. You cant write back
and ask as the email address is cryptic, e.g., info@itsourgreatamerica.com. Yet the name on that email stated it was from
House Rep Republican Jim Jordan, who does not know me at all, and I have never
given him a penny.
Its all a scam to get money for a cause you dont
know about and for a party that is not for the average American citizen (Mitch
McConnell is certainly proof of that).
I can make a safe prediction: The Republican Party
will become a Trump party in the future.
Corporatism Explained:
I submit that that the actual political and economic
system in the U.S. today is corporatism
(also called corporativism). The
control of the 535 members of Congress, members of the Supreme Court and
President are, in reality, the 500 largest revenue producing U.S. based
multinational corporations, which are not the same as the companies in the
S&P 500). For reference, the list of
the largest U.S. corporations by revenue is here.
Walmart leads the list of
corporate revenue earners with $559 billion.
I wonder why they were deemed an essential business that was
permitted to remain open during the shutdown?
Those 500 companies received an estimated $14.4
trillion in gross income in 2020. Lets compare that to U.S. GDP. The gross (nominal) GDP in calendar year 2020
was $20,932.8 trillion, while total real GDP was $18,422.6.
>Thereby, those 500 large companies had revenue
equivalent to 68.8% of nominal GDP and 78.2% of real GDP! Meanwhile, corporate
tax revenues are decreasing:
The
U.S. government collected about $230 billion in corporate taxes in 2019,
about 6.5 percent of federal revenues in 2019. Thats down from 9
percent of federal revenue in 2017, before passage of the Tax Cuts and Jobs Act
(TCJA). While revenues and profits have steadily increased, the share of
federal tax revenues from the corporate income tax has been decreasing
for decades it was about 33 percent of revenues in the early 1950s.
Actually, fewer companies control the U.S.
economy. According to talk show host Bill Mahr, Amazon, Apple, Google, Facebook now account
for 21 percent of the entire U.S. economy.
Its much worse than that, according to NYU Marketing
Professor Scott Galloway, who was a guest panelist on Mahrs
March 12th program.
There
are now six companies that are worth more than the bottom 372 in the S&P
500 (Tweet
correction to transcript). Amazon, since March, has added more market
capitalization than all of European retail (sales). We have effectively four
companies (Amazon, Apple, Alphabet/Google, and Facebook) that are so
dominant that weve been overrun.
There's more full-time lobbyists working in Washington for Amazon than
there are U.S. Senators. There are more
people working in PR and marketing communications at Facebook manicuring Sheryls
image than there are journalists at the Washington Post. We are so
beyond any sense of balance in our economy. The (entire) ecosystem is out of
control. We absolutely need to break these companies up (The Curmudgeon
couldnt agree more with that!)
The Rich Get Richer and Pay More Taxes Too:
For reference, 143.3 million taxpayers reported
adjusted gross income of $10.9 trillion and paid $1.6 trillion in
individual income taxes in 2017 (the latest tax year available). Lets
compare that to the top 1 percent of taxpayers:
·
The share of income earned by
the top 1 percent of U.S. taxpayers (i.e. the rich) rose from
19.7 percent in 2016 to 21.0 percent in 2017.
The share of the income tax burden for the top 1 percent rose as well,
from 37.3 percent in 2016 to 38.5 percent in 2017.
·
According to the Tax Foundation, the top 1 percent of
U.S. taxpayers accounted for more income taxes paid than the bottom 90
percent combined!
·
The top 1 percent paid
roughly $616 billion, or 38.5 percent of all income taxes, while the bottom 90
percent paid about $479 billion, or 29.9 percent of all income taxes. They paid a 26.8 percent average individual
income tax rate, which is more than six times higher than taxpayers in the
bottom 50 percent (4.0 percent).
Many of the top 1 percent are CEOs or executives of
the 500 large companies. Through their
companies, they controlled about 78% of real GDP in 2020 and individually
earned 32% more money than 143.3 million people earned in 2017!
Prof. Galloway worries
that our government has been co-opted by the wealthy and is focused on
protecting the previous generation of winners, even if it means reducing future
generations ability to win. He asks, arent we borrowing against our
childrens prosperity to protect the wealth of the top ten if not one
percent?
What do you think after looking at the chart below?
..
..
.
.
.
.
..
..
...
..
..
.
.
.
.
..
.
..
......
Market Comments:
The markets are rampant with speculation. Bitcoin, margin debt, and penny stock
volumes are all at record highs and increasing at exponential rates.
Margin debt the
amount that individuals and institutions borrow against their stock holdings as
tracked by FINRA at its member brokerage firms is just one indication of
stock market leverage. (FINRA reports it monthly). Other types of stock market
leverage are not reported at all, or are disclosed only piecemeal in SEC
filings by brokers and banks that lend to their clients against their
portfolios, such as Securities-Based Loans (SBLs). No one knows how much total
stock market leverage there is. But margin debt shows the trend.
In February, margin debt jumped by another $15
billion to $813 billion, according to FINRA. Over the past four months, margin
debt has soared by $154 billion, a historic surge to historic highs. Compared
to February last year, margin debt has skyrocketed by $269 billion, or by
nearly 50%, for another WTF sign that the all-asset mania has gone berserk:
Meanwhile, total Penny Stock Dollar Volume hit
$72 billion this past January, the highest level since the first three
months of 2000, when the dot-com mania peaked. Other than those three
months, when penny-stock dollar volume averaged a whopping $155 billion, the
value of shares traded in January 2021 was the highest. This suggests a nearly
unprecedented acceptance of risk. The chart below shows the average daily
trading volume in penny stocks. Does it look reasonable to you?
.
President Biden is calling Vladimir Putin a killer
in response to an interview question. That may be true, but Russia has more
nuclear warheads than any other nation, including the U.S. So, Bidens
provocation was not at all intelligent diplomatically, to say the least! The Kremlin described the U.S. presidents
remark as very bad, and recalled its ambassador to analyze what needs to be
done about the two countries relations.
I believe China, Russia, and perhaps Iran will
challenge Bidens authority as they see him as a weak figurehead.
That is a new, unrecognized risk for financial
markets (especially so called risk assets), which are at historic valuations,
long in the tooth (aged), and characterized by unprecedented wild speculation.
Conclusions:
Multinational corporations can buy anyone with a pittance of gross revenue. THAT IS WHO
CONTROLS AMERICA TODAY!
.
Arthur
Jensen Pitches Economic Determinism's New World Order to Howard Beale
There is no America.
There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow,
Union Carbide, and Exxon. Those are the nations of the world today.
The clip above is from
the classic movie Network which came out in 1976 and was well ahead of its
time. The Fiendbear believes that if Hollywood isnt too afraid, there should
be an updated remake. Instead of TV the theme would be streaming and social
media (think of how Facebook and Twitter control speech and content).
.
Many of those companies (e.g., Alphabet/Google)
significantly contributed to Joe Bidens presidential campaign. Biden is for open borders and no tariffs.
For example, AT&T owns CNN, who hated Trump. Why?
AT&T has locations in 120 countries around the world. They want open
borders and no tariffs. AT&T made a
total of $13,266,403 political contributions in 2020 and spent $12,820,000 in
lobbying in 2019. It wouldve been more
if not for the companys huge debt burden.
The biggest media conglomerates in America are
AT&T, Comcast, Walt Disney, National Amusements (includes Viacom Inc. and
CBS), News Corp and Fox Corporation (both owned in part by the Murdochs). Those six mainstream media companies
believe it is far more profitable to sell and influence public opinion rather
than report the news!
>You dont get the news from those sources; you
get pure propaganda.
Conversely, you get totally honest news, and more
facts from the Curmudgeon (and other unbiased) blog posts than the mainstream
media. Thats because the authors dont
deal in other conflicting businesses like the big six media companies do.
When asked why he robbed banks, Willie Sutton said,
because thats where the money is. The
same principle applies to politics.
End Quotes:
The corporate and political goals are best
exemplified by these two quotes:
All over the place, from the popular culture to the
propaganda system, there is constant pressure to make people feel that they are
helpless, that the only role they can have is to ratify decisions and to
consume. Noam Chomsky
Whoever
controls the media, controls the mind. Jim Morrison
Stay calm, be well, think positive, and till next time
The Curmudgeon
ajwdct@gmail.com
Follow
the Curmudgeon on Twitter @ajwdct247
Curmudgeon is a retired investment professional. He has
been involved in financial markets since 1968 (yes, he cut his teeth on the
1968-1974 bear market), became an SEC Registered Investment Advisor in 1995,
and received the Chartered Financial Analyst designation from AIMR (now CFA
Institute) in 1996. He managed hedged equity and alternative
(non-correlated) investment accounts for clients from 1992-2005.
Victor
Sperandeo is a historian, economist and financial innovator who
has re-invented himself and the companies he's owned (since 1971) to profit in
the ever changing and arcane world of markets, economies and government
policies. Victor started his Wall Street
career in 1966 and began trading for a living in 1968. As President and CEO of
Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and
development platform, which is used to create innovative solutions for
different futures markets, risk parameters and other factors.
Copyright © 2021 by the Curmudgeon and
Marc Sexton. All rights reserved.
Readers are PROHIBITED from
duplicating, copying, or reproducing article(s) written
by The Curmudgeon and Victor Sperandeo without providing the URL of the
original posted article(s).