The U.S. economy is picking up steam but most Americans aren’t feeling it. By contrast, most European economies are still in bad shape, but most Europeans are doing relatively well.

What’s behind this? Two big facts.

First, American corporations exert far more political influence in the United States than their counterparts exert in their own countries.

In fact, most Americans have no influence at all. That’s the conclusion of Professors Martin Gilens of Princeton and Benjamin Page of Northwestern University, who analyzed 1,799 policy issues – and found that “the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”

Instead, American lawmakers respond to the demands of wealthy individuals (typically corporate executives and Wall Street moguls) and of big corporations – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

The second fact is most big American corporations have no particular allegiance to America. They don’t want Americans to have better wages. Their only allegiance and responsibility to their shareholders – which often requires lower wages  to fuel larger profits and higher share prices.

When GM went public again in 2010, it boasted of making 43 percent of its cars in place where labor is less than $15 an hour, while in North America it could now pay “lower-tiered” wages and benefits for new employees.

American corporations shift their profits around the world wherever they pay the lowest taxes. Some are even morphing into foreign corporations.

As an Apple executive told The New York Times, “We don’t have an obligation to solve America’s problems.”

I’m not blaming American corporations. They’re in business to make profits and maximize their share prices, not to serve America.

But because of these two basic facts – their dominance on American politics, and their interest in share prices instead of the wellbeing of Americans – it’s folly to count on them to create good American jobs or improve American competitiveness, or represent the interests of the United States in global commerce.

By contrast, big corporations headquartered in other rich nations are more responsible for the wellbeing of the people who live in those nations.

That’s because labor unions there are typically stronger than they are here – able to exert pressure both at the company level and nationally.

VW’s labor unions, for example, have a voice in governing the company, as they do in other big German corporations. Not long ago, VW even welcomed the UAW to its auto plant in Chattanooga, Tennessee. (Tennessee’s own politicians nixed it.) 

Governments in other rich nations often devise laws through tri-partite bargains involving big corporations and organized labor. This process further binds their corporations to their nations.

Meanwhile, American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations. 

And top U.S. corporate executives make far more money than their counterparts in other wealthy countries.

The typical American worker puts in more hours than Canadians and Europeans, and gets little or no paid vacation or paid family leave. In Europe, the norm is five weeks paid vacation per year and more than three months paid family leave.

And because of the overwhelming clout of American firms on U.S. politics, Americans don’t get nearly as good a deal from their governments as do Canadians and Europeans.

Governments there impose higher taxes on the wealthy and redistribute more of it to middle and lower income households. Most of their citizens receive essentially free health care and more generous unemployment benefits than do Americans.

So it shouldn’t be surprising that even though U.S. economy is doing better, most Americans are not.

The U.S. middle class is no longer the world’s richest. After considering taxes and transfer payments, middle-class incomes in Canada and much of Western Europe are higher than in U.S. The poor in Western Europe earn more than do poor Americans.

Finally, when at global negotiating tables – such as the secretive process devising the “Trans Pacific Partnership” trade deal – American corporations don’t represent the interests of Americans. They represent the interests of their executives and shareholders, who are not only wealthier than most Americans but also reside all over the world.  

Which is why the pending Partnership protects the intellectual property of American corporations – but not American workers’ health, safety, or wages, and not the environment.

The Obama administration is casting the Partnership as way to contain Chinese influence in the Pacific region. The agents of America’s interests in the area are assumed to be American corporations.

But that assumption is incorrect. American corporations aren’t set up to represent America’s interests in the Pacific region or anywhere else.

What’s the answer to this basic conundrum? Either we lessen the dominance of big American corporations over American politics. Or we increase their allegiance and responsibility to America.

It has to be one or the other. Americans can’t thrive within a political system run largely by big American corporations – organized to boost their share prices but not boost America.

It’s seed time for the 2016 presidential elections, when candidates try to figure out what they stand for and will run on.

One thing seems reasonably clear. The Democratic nominee for President, whoever she may be, will campaign on reviving the American middle class.

As will the Republican nominee – although the Republican nominee’s solution will almost certainly be warmed-over versions of George W. Bush’s “ownership society" and Mitt Romney’s “opportunity society,” both seeking to unleash the middle class’s entrepreneurial energies by reducing taxes and regulations.

That’s pretty much what we’ve heard from Republican hopefuls so far. As before, it will get us nowhere. 

The Democratic nominee will just as surely call for easing the burdens on working parents through paid sick leave and paid family and medical leave, childcare, elder-care, a higher minimum wage, and perhaps also tax incentives for companies that share some of their profits with their employees.

All this is fine, but it won’t accomplish what’s really needed. 

The big unknown is whether the Democratic nominee will also take on the moneyed interests – the large Wall Street banks, big corporations, and richest Americans – which have been responsible for the largest upward redistribution of income and wealth in modern American history. 

Part of this upward redistribution has involved excessive risk-taking on Wall Street. Such excesses padded the nests of executives and traders but required a tax-payer funded bailout when the bubble burst in 2008. It also has caused millions of working Americans to lose their jobs, savings, and homes.

Since then, the Street has been back to many of its old tricks. Its lobbyists are also busily rolling back the Dodd-Frank Act intended to prevent another crash.

The Democratic candidate could condemn this, and go further – promising to resurrect the Glass-Steagall Act, once separating investment from commercial banking (until the Clinton administration joined with Republicans in repealing it in 1999). 

The candidate could also call for busting up Wall Street’s biggest banks and thereafter limiting their size; imposing jail sentences on top executives who break the law; cracking down on insider trading; and, for good measure, enacting a small tax on all financial transactions in order to reduce speculation.  

Another part of America’s upward redistribution has come in the form of “corporate welfare” – tax breaks and subsidies benefiting particular companies and industries (oil and gas, hedge-fund and private-equity, pharmaceuticals, big agriculture) for no other reason than they have the political clout to get them.  

It’s also come in the guise of patents and trademarks that extend far beyond what’s necessary for adequate returns on corporate investment – resulting, for example, in drug prices that are higher in America than any other advanced nation. 

It’s taken the form of monopoly power, generating outsize profits for certain companies (Monsanto, Pfizer, Comcast, for example) along with high prices for consumers.

And it’s come in the form of trade agreements that have greased the way for outsourcing American jobs abroad – thereby exerting downward pressure on American wages. 

Not surprisingly, corporate profits now account for a largest percent of the total economy than they have in more than eight decades; and wages, the smallest percent in more than six.

The candidate could demand an end to corporate welfare and excessive intellectual property protection, along with tougher antitrust enforcement against giant firms with unwarranted market power.

And an end to trade agreements that take a big toll on wages of working-class Americans. 

The candidate could also propose true tax reform: higher corporate taxes, in order to finance investments in education and infrastructure; ending all deductions of executive pay in excess of $1 million; and cracking down on corporations that shift profits to countries with lower taxes.

She (or he) could likewise demand higher taxes on America’s billionaires and multimillionaires – who have never been as wealthy, or taken home as high a percent of the nation’s total income and wealth – in order, for example, to finance an expanded Earned Income Tax Credit (a wage subsidy for low-income workers). 

Not the least, taking on the moneyed interests would necessitate limiting their future political power. Here, the candidate could promise to appoint Supreme Court justices committed to reversing Citizens United, push for public financing of elections, and demand full disclosure of all private sources of campaign funding. 

But will she (or he) do any of this? Taking on the moneyed interests is risky, especially when those interests have more economic and political power than at any time since the first Gilded Age. These interests are, after all, the main sources of campaign funding. 

But a failure to take them on prevents any real change in the prospects of the bottom 90 percent of Americans.

It also robs the Democratic candidate of a potential public mandate to change the prevailing allocation of economic and political power – no less dramatically than it was changed by Teddy Roosevelt and Woodrow Wilson a century ago, marking the end of that Gilded Age. 

And a failure to take on the moneyed interests sacrifices the potential enthusiasm of millions of voters – Democrats and Republicans alike – who know the game is rigged, and who yearn for a leader with the strength and courage to un-rig it, and thereby give them and their children a fair chance.

Suppose that by enacting a particular law we’d increase the U.S.Gross Domestic Product. But almost all that growth would go to the richest 1percent. 


The rest of us could buy some products cheaper than before. But those gains would be offset by losses of jobs and wages.

This is pretty much what “free trade” has brought us over the last two decades.

I used to believe in trade agreements. That was before the wages of most Americans stagnated and a relative few at the top captured just about all the economic gains.

Recent trade agreements have been wins for big corporations and Wall Street, along with their executives and major shareholders. They get better access to foreign markets and billions of consumers.

They also get better protection for their intellectual property – patents, trademarks, and copyrights. And for their overseas factories, equipment, and financial assets.

But those deals haven’t been wins for most Americans.

The fact is, trade agreements are no longer really about trade. Worldwide tariffs are already low. Big American corporations no longer make many products in the United States for export abroad. 

The biggest things big American corporations sell overseas are ideas, designs, franchises, brands, engineering solutions, instructions, and software.

Google, Apple, Uber, Facebook, Walmart, McDonalds, Microsoft, and Pfizer, for example, are making huge profits all over the world.

But those profits don’t depend on American labor – apart from a tiny group of managers, designers, and researchers in the U.S.

To the extent big American-based corporations any longer make stuff for export, they make most of it abroad and then export it from there, for sale all over the world – including for sale back here in the United States.

The Apple iPhone is assembled in China from components made in Japan, Singapore, and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.

Apple even stows most of its profits outside the U.S. so it doesn’t have to pay American taxes on them.

This is why big American companies are less interested than they once were in opening other countries to goods exported from the United States and made by American workers.

They’re more interested in making sure other countries don’t run off with their patented designs and trademarks. Or restrict where they can put and shift their profits.

In fact, today’s “trade agreements” should really be called “global corporate agreements” because they’re mostly about protecting the assets and profits of these global corporations rather than increasing American jobs and wages. The deals don’t even guard against currency manipulation by other nations.

According to Economic Policy Institute, the North American Free Trade Act cost U.S. workers almost 700,000 jobs, thereby pushing down American wages. 

Since the passage of the Korea–U.S. Free Trade Agreement, America’s trade deficit with Korea has grown more than 80 percent, equivalent to a loss of more than 70,000 additional U.S. jobs.

The U.S. goods trade deficit with China increased $23.9 billion last year, to $342.6 billion. Again, the ultimate result has been to keep U.S. wages down. 

The old-style trade agreements of the 1960s and 1970s increased worldwide demand for products made by American workers, and thereby helped push up American wages.

The new-style global corporate agreements mainly enhance corporate and financial profits, and push down wages. 

That’s why big corporations and Wall Street are so enthusiastic about the upcoming Trans Pacific Partnership – the giant deal among countries responsible for 40 percent of the global economy.

That deal would give giant corporations even more patent protection overseas. It would also guard their overseas profits.

And it would allow them to challenge any nation’s health, safety, and environmental laws that stand in the way of their profits – including our own.

The Administration calls the Trans Pacific Partnership a key part of its “strategy to make U.S. engagement in the Asia-Pacific region a top priority.”

Translated: The White House thinks it will help the U.S. contain China’s power and influence.

But it will make giant U.S. global corporations even more powerful and influential.

White House strategists seem to think such corporations are accountable to the U.S. government. Wrong. At most, they’re answerable to their shareholders, who demand high share prices whatever that requires.  

I’ve seen first-hand how effective Wall Street and big corporations are at wielding influence – using lobbyists, campaign donations, and subtle promises of future jobs to get the global deals they want.  

Global deals like the Trans Pacific Partnership will boost the profits of Wall Street and big corporations, and make the richest 1 percent even richer.

But they’ll bust the rest of America.

Americans are sick of politics. Only 13 percent approve of the job Congress is doing, a near record low. The President’s approval ratings are also in the basement.

A large portion of the public doesn’t even bother voting. Only 57.5 percent of eligible voters cast their ballots in the 2012 presidential election. 

Put simply, most Americans feel powerless, and assume the political game is fixed. So why bother? 

A new study scheduled to be published in this fall by Princeton’s Martin Gilens and Northwestern University’s Benjamin Page confirms our worst suspicions.

Gilens and Page analyzed 1,799 policy issues in detail, determining the relative influence on them of economic elites, business groups, mass-based interest groups, and average citizens.

Their conclusion: “The preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”

Instead, lawmakers respond to the policy demands of wealthy individuals and monied business interests – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

Before you’re tempted to say “duh,” wait a moment. Gilens’ and Page’s data come from the period 1981 to 2002. This was before the Supreme Court opened the floodgates to big money in “Citizens United,” prior to SuperPACs, and before the Wall Street bailout.

So it’s likely to be even worse now.

But did the average citizen ever have much power? The eminent journalist and commentator Walter Lippman argued in his 1922 book “Public Opinion” that the broad public didn’t know or care about public policy. Its consent was “manufactured” by an elite that manipulated it. “It is no longer possible … to believe in the original dogma of democracy,” Lippman concluded.

Yet American democracy seemed robust compared to other nations that in the first half of the twentieth century succumbed to communism or totalitarianism.

Political scientists after World War II hypothesized that even though the voices of individual Americans counted for little, most people belonged to a variety of interest groups and membership organizations – clubs, associations, political parties, unions – to which politicians were responsive.

“Interest-group pluralism,” as it was called, thereby channeled the views of individual citizens, and made American democracy function.

What’s more, the political power of big corporations and Wall Street was offset by the power of labor unions, farm cooperatives, retailers, and smaller banks.

Economist John Kenneth Galbraith approvingly dubbed it “countervailing power.” These alternative power centers ensured that America’s vast middle and working classes received a significant share of the gains from economic growth.

Starting in 1980, something profoundly changed. It wasn’t just that big corporations and wealthy individuals became more politically potent, as Gilens and Page document. It was also that other interest groups began to wither.

Grass-roots membership organizations shrank because Americans had less time for them. As wages stagnated, most people had to devote more time to work in order to makes ends meet. That included the time of wives and mothers who began streaming into the paid workforce to prop up family incomes.

At the same time, union membership plunged because corporations began sending jobs abroad and fighting attempts to unionize. (Ronald Reagan helped legitimized these moves when he fired striking air traffic controllers.)

Other centers of countervailing power – retailers, farm cooperatives, and local and regional banks – also lost ground to national discount chains, big agribusiness, and Wall Street. Deregulation sealed their fates.

Meanwhile, political parties stopped representing the views of most constituents. As the costs of campaigns escalated, parties morphing from state and local membership organizations into national fund-raising machines.

We entered a vicious cycle in which political power became more concentrated in monied interests that used the power to their advantage – getting tax cuts, expanding tax loopholes, benefiting from corporate welfare and free-trade agreements, slicing safety nets, enacting anti-union legislation, and reducing public investments.

These moves further concentrated economic gains at the top, while leaving out most of the rest of America.

No wonder Americans feel powerless. No surprise we’re sick of politics, and many of us aren’t even voting.

But if we give up on politics, we’re done for. Powerlessness is a self-fulfilling prophesy.

The only way back toward a democracy and economy that work for the majority is for most of us to get politically active once again, becoming organized and mobilized.

We have to establish a new countervailing power. 

The monied interests are doing what they do best – making money. The rest of us need to do what we can do best – use our voices, our vigor, and our votes.