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Money Power Runs America

Money Power Runs America

by Stephen Lendman

Global Research
January 4, 2012

Wall Street does it by controlling money, credit and debt, as well as manipulating markets for private enrichment. House and Senate millionaires do it their way for greater wealth, privilege, power and status.

New Center for Responsive Politics (CRP) figures show it. More on them below. New York Times writer Eric Lichtblau commented in his article headlined, "Economic Downturn Took a Detour at Capitol Hill," saying:

In 1991, Representative Ed Pastor (D. AR) entered Congress with around $100,000 in savings and as much debt owed banks. Now he's a millionaire, one of 250 in Congress.

"(A)nd the wealth gap between lawmakers and their constituents appears to be growing quickly" as austerity cuts harm most Americans needing help during harder than ever hard times.

Since 2008, they've lost jobs, homes, personal savings, and futures. At the same time, congressional members are richer than ever. Perhaps never "has the divide (been) so wide, or the public contrast so stark, between lawmakers and those they represent."

No wonder Gallop's year end poll showed Congress getting its lowest ever 11% approval rating. At the same time, growing numbers of Americans reject both parties for independent or unaffiliated status.

On November 14, the Atlantic Wire headlined, "How Members of Congress Get Rich Through 'Honest Graft,'" saying:

"A 60 Minutes report examined the ways members of Congress trade on inside, privileged information" to get rich. "Congresspeople are exempt from insider trading rules" so profit in ways others can't legally.

They do it through stock trades and privileged business deals. Former House Speaker Dennis Hastert earmarked funding for a federal highway project on land he owned. He later sold it for $2 million.

Former Speaker Nancy Pelosi profited from eight IPOs, including some "that had business before her House." So have other congressional members, past and present.

Former Senator Bob Dole bought shares in Automatic Data Processing four days before GHW Bush signed legislation with new military data processing rules benefitting the company handsomely.

Former Speaker and Republican presidential aspirant Newt Gingrich bought Boeing stock just before he helped kill amendments to cut International Space Station funding. It helped Boeing secure a lucrative contract.

Numerous others in Congress profit the same way. Some hit the jackpot. In 2004, the Journal of Financial and Quantitative Analysis [.pdf] published a report showing Senate portfolios outperformed the market by about 12% annually. It didn't happen by chance.

A 2011 study showed House member investments exceed market performance by 6%. Do it annually and it adds up. For example, $100 invested at 6% for 40 years grows tenfold. At 12%, it's 80-fold.

Washington runs on inside information. Congressional members use it to get rich. While their median net worth gained 15% from 2004 to 2010, America's 10% richest found theirs unchanged, and for Americans overall, it dropped based on inflation-adjusted dollars.

Of course, America's top 1% outdid them all. Why else would nationwide protests target them for social justice?

Notably, congressional wealth grew two and a half times (from $280,000 to $725,000) from 1984 to 2009 in inflation-adjusted dollars, while for average Americans it declined slightly. Moreover, for the past half century, income inequality mostly benefits congressional conservatives. Progressivism pays poorly.

In 1984, one in five House members had zero or negative net worth, excluding home equity and other non-income producing property. By 2009, it dropped to one in 12.

As a result, the gap between congressional members and their constituents perhaps never has been so wide. Moreover, it increases annually at a time Main Street's suffering harder than ever hard times, and few in Washington care.

Center for Responsive Politics (CRP) Report

It began saying:

"These days, being a millionaire (puts you in) the (top) one percent. But in Congress, it only makes you average."

Among 535 House and Senate members, 250 (or 47%) are millionaires, based on 2010 financial disclosure forms. Only America's top 1% enjoys that status. According to CRP's executive director Sheila Krumholz:

"The vast majority of members of Congress are quite comfortable financially, while many of their own constituents suffer from economic hardship."

It's largely from decades of destructive bipartisan policies. Since the 1980s, economic inequality grew enormously. Business and super-rich elites profited handsomely at the expense of working class people.

Wealth disparity is unprecedented at a time nearly 23% of Americans are unemployed. Half of US households are impoverished or bordering on it. Millions lost homes, and growing hunger and homelessness threaten millions more.

In contrast, congressional members never had it so good. "It's no surprise that so many people grumble about lawmakers being out-of-touch," said Krumholz. "Few Americans enjoy the same financial cushion maintained by most members of Congress - or the same access to market-altering information that could yield personal financial gains."


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