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Posted by Time for change in General Discussion (1/22-2007 thru 12/14/2010)
Sat Nov 13th 2010, 01:55 PM
Why should the Democratic Party allow Republicans to destroy our country without a fight and without even making them show their hand? Two possible reasons come to mind: Either they are in bed with the same elites that own the Republican Party, or th
With all the recent brouhaha over whether or not the Huffington Post misinterpreted Obama advisor David Axelrod’s comments about extending the Bush tax cuts for the wealthy during their interview with him, something much more important is being lost sight of.

To briefly recap the controversy: On November 11th, HuffPo reported that Axelrod suggested during their interview with him that Obama would likely extend the Bush cuts for the wealthy. That interpretation was based on Axelrod’s saying that extending tax cuts for the middle class is both necessary and dependent upon extending the (much larger) tax cuts for the wealthy.

But then, later that same day, Axelrod and David Pfeiffer apparently disputed the HuffPo article, saying that “There is not one bit of news here” and “Nothing has changed”. At first it was difficult to understand how they could claim that “nothing has changed”.

The apparent contradiction was clarified at the G20 Conference in Seoul, in which Obama said, “I continue to believe that extending permanently the upper-income tax cuts would be a mistake and that we can't afford it". That statement relates back to a November 7 statement Obama made on “60 Minutes”, in which he said:

What I don't think makes sense is for us to borrow $700 billion to pay for that (extension of Bush tax cuts for the wealthy over ten years). And we don't have the money. I mean, everybody's already talking about our debt and our deficit. Why would we want to add to it? Now, having said all that . . .

Some people took that to mean that Obama would terminate the Bush tax cuts for the wealthy, which are due to expire at the end of this year. To be clear on this, these are the “temporary” Bush tax cuts for the wealthy that go back to 2001. But it now appears that, although Obama will not agree to a “permanent” extension of the Bush tax cuts for the wealthy, he is more than open to a “temporary” extension.

But what is meant by a “temporary” extension? These tax cuts went into effect nearly ten years ago. It has been estimated that even if they are allowed to expire at the end of this year they will have cost $2.48 trillion, with more than 52% of the benefits going to the wealthiest 5% of Americans. If Obama agrees to extend them for another two years it will cost more than another hundred billion dollars – and when will they end? They will end when some Democratic President or Congress comes up with the political will to get rid of them or let them expire. But if they aren’t willing to do that now, what reason is there to believe that they will let them expire two years from now? The most likely scenario would seem to be that they would continue to be extended time and again, perhaps until the Republicans win the presidency and decide to extend them another ten years or make them permanent. If Republicans now hold middle class tax cuts hostage to much larger tax cuts for the wealthy, why would that change in 2 years?

Some history on Obama’s pledge to discontinue the Bush tax cuts

Obama’s promise to reverse the Bush tax cuts on the rich was a major part of his Presidential campaign in 2008. Here is a typical statement he made on this issue:

The Bush tax cuts – people didn't need them, and they weren't even asking for them, and they ought to be relaxed so we can pay for universal health care and other initiatives.… We have to stop pretending that all cuts are equivalent or that all tax increases are the same…. At a time when ordinary families are feeling hit from all sides, the impulse to keep their taxes as low as possible is honorable. What is less honorable is the willingness of the rich to ride this anti-tax sentiment for their own purposes.

I and many others repeatedly used this as a selling point to convince moderates to vote for Obama.

Then, shortly after being elected president, Obama announced that he was considering allowing the Bush tax cuts to expire at the end of 2010 rather than make an active effort to get rid of them sooner. Then he proceeded to give up the idea of attempting to get rid of them before they expired. And now it appears that he’s ready to agree to have them extended on a “temporary” basis. Let’s consider some reasons why a “temporary” extension is a bad idea, other than that we have no idea how long “temporary” will be:


# 1 – We need the money

Extending the tax cuts for the wealthy for even two years would cost about $160 billion over and above what it would cost to go with the middle class tax cut alone.

Obama’s campaign website contained numerous very impressive and much needed plans for strengthening our country, which most voters compared favorably with McCain’s plans. These included investments in education, investments in alternative energy development, making health care affordable for all Americans, protecting social security, strengthening our cities, and alleviating poverty.

When asked during the presidential campaign how he would pay for all his programs and provide tax relief for the working and middle class without adding substantially to our national debt, reversing the Bush tax cuts on the wealthy was always a major part of his response. When does he intend to do that?

# 2 – Extreme income and wealth inequality is bad for the economy

Income and wealth inequality have risen substantially since the “Reagan Revolution” beginning in the early ‘80s, and the rise was even steeper during the Bush administration. As of 2007, a study showed that more than a third of the wealth in the United States was held by the top 1% of households, while about 15% was held by the lower 80%. That means that the average top 1% household held almost 200 times as much wealth as the average lower 80% households.

What does this mean for our economy? Well, there was one other time in U.S. history when income inequality was almost as bad as it is now. That was the late 1920s, just prior to the Stock Market Crash of 1929 and the Great Depression. An article by Gabriel Thompson in The Nation contains a graph titled “Plutocracy Reborn – Re-creating the Gap that Gave us the Great Depression”. The article contains a chart that portrays the situation graphically, plotting over time the income ratio between the top 0.01% of U.S. families and the bottom 90%.

The ratio rose from about 250 at the start of the 1920s to a peak of about 900 by 1929. The ratio then plunged, and by the start of WW II it had declined to about 200, where it remained with some relatively minor ups and downs until the beginning of Ronald Reagan’s Presidency. It then began another precipitous climb, with a sharp decline beginning during the last year of Clinton’s Presidency, but then another sharp increase beginning at about the time that the Bush tax cuts for the wealthy first went into effect, so that by the end of 2006 we exceeded even the peak ratio of 1929 that preceded the Great Depression.

Why is extreme income inequality so bad for the economy? I have a rather simple-minded way of looking at it: When income and wealth inequality are extreme, it is almost as if the wealthy are living in a different economic universe than the vast majority of other people. They think nothing of spending vast sums of money that the rest of us will never see in a lifetime of work. Under such conditions, those who produce things – the housing industry, for example – have much more incentive to put all their efforts into producing things for the rich than for other people. Consequently, most other people tend to get priced out of the market.

Here’s a more sophisticated explanation, from FDR’s Chairman of the Federal Reserve, explaining the relationship between wealth inequality and the onset of the Great Depression:

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth…. By taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out the game was stopped.

# 3 – Extreme income inequality is bad for democracy

The reason why extreme income inequality is bad for democracy shouldn’t be difficult to understand. Extreme wealth allows a small number of people to exert a very disproportionate influence on our elections and legislative process.

There are about 35,000 lobbyists in the United States. Corporations pay those lobbyists about $2 billion in salaries and spend another $8 billion to “influence” legislators to help to enact favorable legislation. In many if not most cases, the legislation in question, while benefiting the corporation, will do so at the expense of most everyone else.

Thus there has developed in the United States an unholy and symbiotic alliance between government and corporate power, whereby our government acts in behalf of corporate interests rather than in behalf of our interests, in return for the bribes that keep them in power.

Bill Moyers explains the situation in a straight forward manner. He made the following comments during a speaking tour titled “Saving Democracy”, in California in February 2006, and reprinted in his book, “Moyers on Democracy”:

This is a profound transformation in a country whose DNA contains the inherent promise of an equal opportunity at life, liberty, and the pursuit of happiness and whose collective memory resonates with the hallowed idea of government of the people, by the people, and for the people. The great progressive struggles in our history have been waged to make sure ordinary citizens, and not just the rich, share in the benefits of a free society. Yet as the public today supports such broad social goals as affordable medical coverage for all, decent wages for working people, safe working conditions, a secure retirement, and clean air and water, there is no government to deliver on those aspirations. Instead, our elections are bought out from under us… So powerfully has wealth shaped our political agenda that we cannot say America is working for all of America. In the words of Louis Brandeis, one of the greatest of our Supreme Court justices: “You can have wealth concentrated in the hands of a few or democracy, but you can’t have both.” Money is choking democracy to death.

Since the Telecommunications Act of 1996, increasing control over the news media has provided another powerful tool for a very small group of wealthy telecommunications owners and executives to exert highly disproportional control over the political process, by virtue of the slanted news they provide to the U.S. electorate. The utter failure of our corporate controlled news media to tell the American people the truth about the Bush administration lies that propelled us into an unnecessary and illegal war against Iraq is just one example of this.

Thus it is that we have a vicious cycle of increasing income inequality and declining democracy in our country. Extreme income inequality allows the rich to exert extraordinary influence over the legislative process and the news that we receive, which tilts our nation’s laws even further in their favor, which provides them with ever more money and opportunity to maintain control over our government.

# 4 – Extreme income inequality is bad for people

The effects of severe income inequality are not limited to economic consequences. Epidemiologists Richard Wilkinson and Kate Pickett demonstrate in their book, “The Spirit Level – Why Greater Equality Makes Societies Stronger”, numerous non-economic consequences of obscene income inequality that are independent of absolute income or wealth. These consequences include more mental illness, greater use of illegal drugs, higher imprisonment rate, higher infant mortality rate, more homicides, lower educational performance of our children, lower index of child well-being, lower trust in our fellow citizens, and lower status of women, among other adverse societal effects. Wilkinson and Pickett attribute much of this to the effects of the humiliation that many people feel when they see others around them who have much more status, wealth, and power than they do. This is especially applicable in a society in which wealth and status is considered by many to be a mark of one’s character.

# 5 – Extreme inequality is unfair

Conservatives defend economic inequality by arguing that it is fair to reward those who work the hardest, are the most productive, and who take the most risks. They say that these are the people who create wealth for everyone, so they ought to be rewarded for their hard work, productivity, and risk taking, which benefits everyone by making the whole economic pie bigger.

I most certainly agree that people ought to be rewarded for hard work and creating things that are of use for society. But where is the evidence that the rich (say, the top 1%) work 200 times harder, produce 200 times as much, or take 200 times as much risk as 90% of the rest of us? I’ve never seen such evidence, and it is inconceivable to me that it exists.

# 6 – There is no good reason to postpone reversing the Bush tax cuts on the rich

When Obama initially made the decision to allow the Bush tax cuts for the wealthy to expire at the end of 2010 rather than repeal them sooner, his primary excuse was that we were in a recession – the implication being that high taxes on the rich are bad for the economy during a recession. This message has been loudly proclaimed by our corporate news media as well. But there is no evidence for that claim. Again, let’s go back to the Great Depression of the 1930s to look at the evidence on this issue:

The top marginal tax rate stood at a meager 25% when FDR was inaugurated in 1933, during the height of the Great Depression. FDR progressively raised the top marginal tax rate, as can be seen in this graph, to 63% in 1932, to 79% in 1936, to 88% in 1942, and to 94% in 1944.

Did that destroy our economy? FDR took office in March 1933. You can see from the graph below that the steep slide in GDP was arrested in 1933, and began a steady rise in 1934, so that by 1940 it had nearly reached pre-Crash levels.

Consequently, following FDR’s huge tax increases on the rich, he won re-election in 1936 by a popular vote margin of 61% -36% and an electoral vote margin of 523-8.

The top marginal tax rate remained at 70% or more for several decades after FDR’s death – a period that Nobel Prize winning economist Paul Krugman describes as “the greatest sustained economic boom in U.S. history”. Then, in 1981 came the “Reagan Revolution”, large tax cuts for the rich, and increasing income inequality which accelerated to unprecedented levels during the Bush II administration.

It is also important to understand that we have seen a very strong inverse relationship in our country between top marginal tax rates and income inequality, as seen in this graph:

# 7 – Republicans will use Obama’s capitulation to further their far RW ideology

If Obama capitulates on this, Republicans will use it to further their myth/lie that tax cuts for the wealthy are needed in a recession. Why should a Democratic president accede to far right wing demands for which no evidence exists for their value? When they do that they send a message to the American people that those demands are reasonable and justified.

# 8 – Enabling poison pill politics

The crux of the situation is that we have two policies under consideration: One – tax cuts for the middle class – is highly popular with the American people. The other – much larger tax cuts for the wealthy – is not only highly unpopular, but it portends disaster for our country. I’ll refer to that policy as the “poison pill”. The Democrats have claimed support for the former. The Republicans also claim support for the former, but they insist on tying it to their poison pill. They use their poison pill as a form of blackmail, threatening that if Democrats don’t accept their poison pill they will kill legislation that is highly desired by the American people.

The majority of ideas proposed by Republicans have the purpose of further enriching the wealthy and powerful, at the expense of the vast majority of the American people. If Democrats allow themselves to be blackmailed into accepting these poison pills every time they propose much needed legislation for our country, there is no hope for us. Instead, the Democratic Party should propose needed legislation for our country without attached poison pills. Force the corporate owned Republican Party to show their hand. Give them the choice of either following through with their blackmail by killing popular and needed legislation, or accepting it. If they kill it, then they will have to be accountable to the American people for doing so.

The Democratic party should propose extending tax cuts for the middle class right now, while they still have majorities in both Houses of Congress and the presidency. It should be very easy. Republicans would have to filibuster that legislation in the Senate in order to kill it. But even if for some reason the Democratic Party isn’t able to do it this year, they can still do it after Republicans take over the House in 2011. Republicans would still have to withhold their support for that popular legislation in order to kill it. Let’s see whether they’re willing to risk the consequences.

Why should the Democratic Party allow them to destroy our country without a fight and without even making them show their hand? There are only two possible reasons for taking this course: Either they are in bed with the same elites that own the Republican Party, or they simply don’t have the courage that is needed to represent the people who elected them. That’s why they were roundly repudiated in the 2010 midterm elections. They’d better change course if they care anything about the people they were elected to serve.


The Bush tax cuts, like the Iraq War, are one of the primary drivers of our large federal deficit. And like the Iraq War, the Bush tax cuts were sold to the public through outright deception.

The snake oil the Bush administration peddled was that the tax cuts, which overwhelmingly went to the rich and the ultra-rich, would spur the economy.
Now that we're facing the worst economic crisis since the Great Depression, many so-called "conservatives," joined with corporatist "moderates," are singing the same tune. They are demanding we extend the tax giveaways for the wealthy (set to expire at the end of the year) at a cost of $700 billion over the next decade.

Meanwhile, these same members of Congress are demanding deep cuts to the social safety net for the poor, the middle class, the unemployed and the elderly. There is very little that so clearly demonstrates the callous venality of some members of Congress…

Tax cuts for economic elites aren't free and they aren't effective. The government still needs revenue and giving away money to millionaires takes away from the money we can spend to help the victims of this economic downturn.

There is simply no excuse for Congress to plead poverty when it comes to helping those in need while literally giving it away to those who don't need it. Congress needs step up to the plate and make sure we don't continue one of the biggest economic injustices of the Bush era.

Tell Congress: Don't extend the Bush tax cuts for the wealthy. Click here to sign the petition.
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The Unfulfilled Promise
The Unfulfilled Promise of the American Dream: The Widening Gap between the Reality of the United States and its Highest Ideals

Time for change

Notwithstanding the lofty sentiments and purpose of the U.S. Declaration of Independence, the reality of the United States of America did not then – and never has – lived up to its ideal. Our nation remains today a long way from fulfilling the promise implied by those ideals. Yet, our Declaration was a great start, and it has long shone as a beacon of hope for people all over the world.

Throughout our history, while many have striven to close the gap between our highest ideals and the reality of our nation, others have focused on the accumulation of private wealth and power, at the expense of everyone else. In recent decades the latter have gained much ground, leading to increasing imperialism abroad and deteriorating democracy at home, characterized by routine (and legal) bribery of our public officials, the fusion of government and private corporate interests (corporatocracy), a corrupt election system largely in the hands of private corporations, a corporate controlled communications media, and the widespread acceptance of Executive Branch secrecy, routinely justified with little if any questioning, by the magic words “national security”. All of this is rapidly turning our country from the democracy proclaimed at our founding into a plutocracy (government by the wealthy and for the wealthy). The result is the most obscene wealth gap our country has ever known, the highest imprisonment rate in the world, rampant militarism, routine flaunting of international law, the least efficient health care system in the developed world, a pending environmental catastrophe that threatens to destroy the life sustaining forces of our planet, and myriad other problems that threaten to destroy our nation and tyrannize our people.

My new book, The Unfulfilled Promise of the American Dream – The Widening Gap between the Reality of the United States and its Highest Ideals, explores the roots and consequences of the demise of our democracy, and why most Americans have been unable to understand this process or even become aware of it. A good understanding of why and how we have deviated so greatly from the ideals of our nation is the first and necessary step towards getting back on the right track and revitalizing our society.

The book is currently being sold in electronic PDF format and can be purchased at for $3.99. It will also soon be available in Amazon Kindle format. DU members who cannot afford to buy the book but would like to read it can pm me with your e-mail address, and I will send you a free PDF copy.

I’ve previously posted on DU a slightly earlier version of the introduction to the book, which is also posted at my site. Here is the Table of Contents, followed by a brief description of the three parts of the book:


Prologue – What is Wrong with the United States of America?

Part I – Root Causes of the Impending Demise of American Democracy
Chapter 1 – Legalized Bribery
Chapter 2 – Human Psychological Factors
Chapter 3 – Corporatocracy
Chapter 4 – Corporate Control of Media
Chapter 5 – Corrupt Election System
Chapter 6 – Government Secrecy
Chapter 7 – American Exceptionalism

Part II – A Sampling of Imperialist Actions
Chapter 8 – Slavery and its Legacy
Chapter 9 – Early U.S. Imperialism
Chapter 10 – U.S. Imperialism in Cold War
Chapter 11 – Iraq War and Occupation
Chapter 12 – Afghanistan War

Part III – Consequences
Chapter 13 – Election of George W. Bush
Chapter 14 – War and Imperialism
Chapter 15 – Class Warfare
Chapter 16 – Predator Financial Class
Chapter 17 – Shock Therapy
Chapter 18 – Contempt for Int. Law
Chapter 19 – The “War on Drugs”
Chapter 20 – Climate Change
Chapter 21 – “War on Terror”
Chapter 22 – Health Care
Chapter 23 – Unaccountable government
Chapter 24 – Response to 9/11 Attacks

PART I – Root Causes of the Impending Demise of American Democracy

It is somewhat difficult to separate the causes of our problems from their consequences, since they combine to form a long chain of cause leading to consequence, leading to more consequences, etcetera. Nevertheless, it seems worth while to identify the root causes of our problems, those that occur early in the chain and lead to so many of the tragic consequences we see today. The only chance we have of reversing the demise of our democracy is through addressing and attacking its root causes.

At the top of the list is the systematic bribery of public officials by the powerful corporations (Chapter 1) whom our government is charged with regulating in the public interest. Instead of calling it bribery, we call it “campaign contributions”, but what we call it isn’t as important as what it is. It is hard to fathom how democracy can survive when such a practice is legal and condoned.

Working in tandem with our system of legalized bribery is the nature of the people who inhabit our country. That is not to say that Americans are inherently substantially different than any other people. Human beings are imperfect, and that is probably a major reason why in a world where civilization began more than five millennia ago, the oldest written national framework of government in the world today – the Constitution of the United States of America – is only a little more than two and a quarter centuries old. Chapter 2 explores the roles of basic human needs, authoritarianism, psychological defense mechanisms used to prevent us from perceiving reality as it is rather than as we’d like it to be, and corrupted ideologies in causing us to passively accept the accumulation of power in the hands of ambitious and ruthless individuals who care about little else than expanding their own wealth and power.

When bribery of public officials is tolerated as an inevitable aspect of public life, government inevitably grows close to the wealthy interests that shower it with money in return for legislative and other favors. A malevolent symbiosis grows between the state and corporate power, resulting in rule by an oligarchy that is highly detrimental to the lives of ordinary people (Chapter 3). Using their accumulated wealth and power to manipulate our legislative process, the oligarchy grabs for more and more control of the communications media (Chapter 4) that are used to control the information available to and shape the attitudes of our nation’s people, in pursuit of their own narrow interests.

Since the 1980s an orchestrated campaign has been underway to demonize “big government”, thereby paving the way for private corporate control over more and more functions that were previously deemed intrinsic functions of government. Among those functions is the running of public elections (Chapter 5) – the function that symbolizes democracy perhaps more than any other single function. Consequently, the purging of selected registered voters from our computerized voter rolls has become a routine recurring event throughout much of our country, and without a doubt determined the results of the 2000 – and probably 2004 as well – presidential election. Just as bad, more and more of the counting of votes in our public elections have been turned over to private corporations, which count our votes using electronic machines using secret software to produce vote counts that cannot be verified by anyone.

Bribery, the fusion of government and private interest, fake and biased news, and corrupt elections are not things that government and its corporate allies want us to know about. Consequently, they construct walls of secrecy (Chapter 6) to keep us from obtaining information that sheds light on their activities. The perfect phrase for facilitating this is “national security”. When our government tells us that the “national security” requires that certain things be kept secret from us, the understanding is that to question such a pronouncement is unpatriotic, and to actually attempt to obtain the “secret” information may be treasonous.

But indefinitely maintaining secrets from the American people can be very difficult, because at least some people want to know what their government is up to. So in addition to the formal mechanisms of secrecy, informal mechanisms are constructed (Chapter 7) to keep vital information away from us. One of the primary methods for doing this is to make certain sensitive subjects taboo – that is, to create the widespread belief that discussion of these topics is so outside the bounds of acceptable human discourse that anyone who discusses them should be shunned by society, or worse. The most common issue that falls into this category is any discussion that sheds light on the disparity between American ideals and the reality of life in our country today.

PART II – A Sampling of Imperialist Actions in U.S. History

Notwithstanding the fact that our founding document says that “all men are created equal” and speaks of the inalienable rights of humankind, the United States has throughout its history partaken of massive exploitation of other peoples.

It is estimated that at the time of our birth, 18% of our population was black slaves. In our expansion westwards during the late 18th and 19th centuries, we decimated the original inhabitants of our continent, and often treated them with great cruelty. In 1846 we manufactured an excuse for war with our neighbor Mexico, in which we continued to expand our country westwards and southwards. In 1893 we began our overseas imperialism with the conquest of Hawaii. Our overseas expansion was greatly accelerated in 1898 with our participation in the Spanish-American War, which led to our conquest of Cuba, Puerto Rico, and the Philippines. With our arrival at world superpower status at the end of World War II, we began the Cold War, which led to and served as a rationalization for covert and/or direct military actions against myriad foreign nations over the next 46 years. With the September 11, 2001 attacks on our country, we declared a perpetual “War on Terror”, which served and continues to serve as an excuse to invade and occupy Iraq and Afghanistan, nations that posed no threat to us. We do not know when or if this perpetual war will ever end. We don’t know how many additional imperial conquests it will lead to.

Most Americans don’t think much about all this. Many of these actions are done in secrecy, and the American people don’t find out about them until many years later – or we never find out about them at all. Those that we do know about are spun into the most favorable light, to make them seem benign or even noble.

But these actions come at great costs: in the lives of our soldiers; in the ruined lives of the peoples of the victim countries; in trillions of dollars cost to our people and their future generations; in our international reputation; in anti-American hatred leading to terrorism; and, to our democracy itself. For how can a nation claim to believe in the inalienable rights of humankind specified in its founding document, while making a mockery of that belief in the way it treats other peoples? For that reason alone it is worth while to take a brief look at our long history of imperialist actions.

PART III – Consequences

In the Prologue I give a brief account of what I see as some of the worst and tragic consequences of the root causes that I discuss in Part I – to enable the reader to see where this book is heading. When elections of our public officials are for sale to the highest bidder… when our public officials are so addicted to the “campaign contributions” of their wealthiest constituents that they develop a symbiotic relationship with them… when our communications media are owned and controlled by an oligarchy of wealthy elites… when our citizenry lack the ability to differentiate propaganda from reality… when we allow machines provided by private corporations to count our votes using secret electronic software… then we should expect that the consequences will not be pretty or comfortable for the vast majority of our citizens.

In Part III, I explore those consequences in much greater detail, in the hope that the reader will agree with me that these are very serious problems, and that they must be successfully addressed if our country is ever to fulfill the promise of its ideals, or even make progress in that direction. When enough Americans recognize our problems as problems, stripped of the gloss and spin put on them by our oligarchy, they will rise up and do something about them. Until then there will be no progress, and we are very likely to head in the direction of all the former empires of our planet, ending in chaos, widespread catastrophe, suffering, and ignominy.

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