Northwestern / Princeton Study Notes Elite Control Over Government

Northwestern / Princeton Study Notes Elite Control Over Government

In news that shouldn’t be news for those on the inside of Wall Street, a new study concludes economic elites with an organized lobbying effort have effective control over key aspects of the US government.

The researcher duo, Martin Gilens from Princeton University and Benjamin Page from Northwestern University, concluded in a peer reviewed white paper that “economic elites and organized groups representing business interests” have a significant influence over government decisions, “while mass-based interest groups and average citizens have little or no independent influence.”

Exclusive: Voss Value Launches New Long Only Special Situations Fund

Since its inception in January 2012, the long book of the Voss Value Fund, Voss Capital's flagship offering, has substantially outperformed the market. The long/short equity fund has turned every $1 invested into an estimated $13.37. Over the same time frame, every $1 invested in the S&P 500 has become $3.66. Q1 2021 hedge fund Read More

The white paper, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” studied 1800 policy decisions to draw conclusions.

How far does elite control extend?

Is this clarity that professors Gilens and Page discovered a recent phenomenon?  Or have business elites always controlled the government to such a deep level?  And just how far does the control extend?  Does elite control extend into the regulatory and judicial structure?  Could perhaps the US Justice Department ignore criminal behavior of Wall Street bank executives?  If this were the case, government control by elites would be to its most significant point in history.  In his book Divide, author Matt Taibbi compares the current US two-tiered legal structure to that of the Soviet Union, where he had lived. There’s not much difference, he recently concluded in a speech to the Chicago Council on Global Affairs.

When did elite control begin and grow?

The study is inconclusive in terms of when this control started and how quickly it grew.  Northwestern’s Page suspects that as wealth and income disparity has risen as unions have grown weaker and free trade agreements have created global competition that has lowered wages of “average” people. Both Republican and Democratic parties have essentially the same economic and trade policies.  The US Federal Reserve’s Quantitative Easing has been described as welfare for the large banks and wealthy asset holders, while various trade pacts have been followed by a declining middle class in the US. The US has money to buy other countries products and services more than the US selling an equal amount of products into emerging markets.

How deep does control extend?  Into the US Justice Department?

To what extent does this control extend?  When asked about the level of elite control in the context of MF Global and other criminal activities on Wall Street that either have not been investigated or prosecuted, Page said it goes “deep.”  Sounding a rather un-American note, he said “Nothing happens in US politics without leadership from some segment of the wealthy.”  As Easter is upon a certain segment of the population, one might ask: could a story such as that of Jesus Christ – a peasant of modest means – influence today’s controlled political landscape with change?  Or more recently, could a Martin Luther King Jr. generate such popularity from a political structure that demonizes Edward Snowden?

Struggles for average citizens to exert their influence in politics can be notably seen in 1896 and 1900 elections, when big bank foe and progressive William Jennings Bryan was defeated by big bank approved William McKinley.  At that time the issue of big bank control over government was overtly discussed.  More recently this populism was seen in Barack Obama’s first presidential election campaign and the well-followed crusade of US Senator Elizabeth Warren.  “Is there a new progressive era coming?” Page wondered.  If so, it will require financial backing to flourish.

The report comes at a time when campaign contributions are rising as a result of the McCutcheon v. FEC ruling, which allowed unlimited campaign contributions for wealthy individuals.  In a “democracy” politics is driven by the money, which is widely known.  Is justice also driven by money?

Previous article Cliff Asness: Market Outlook Concerns Me Most [VIDEO]
Next article Tesla Motors Inc Shares Fall After Fidelity Reveals Buy
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)

No posts to display