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The Myth of the American Ethnic Melting Pot

Politics / US Politics Aug 06, 2010 - 02:07 AM GMT

By: Graham_Summers


Best Financial Markets Analysis ArticleThe classic paradigm for thinking of the “American experience” involves the use of a “melting pot” or “patchwork” metaphor. The basic idea is that the US is a single entity comprised of a wide variety of ethnic/ social groups. This metaphor in turn is used to support the view that the US is a Democracy: a place where “your vote counts” no matter who you are.

However, to me, an examination of the real socio-political hierarchy in the US reveals that this entire “patchwork” ideology is a myth perpetuated in order to convince the general populace that they somehow matter or have an impact on the US political structure and proposed legislative policy.

Indeed, the “patchwork” metaphor itself is founded on a false assumption: that the significant differences between the US citizenry are social or ethnic in nature. Let us consider some of the major issues that “divide us” and how they really distract us from the primary class structure that determines one’s place in the US socio-political structure.

The most common traits or differences emphasized in the media are:

  • race
  • gender
  • political orientation
  • religious beliefs
  • social views (guns, abortion, etc)

The average person believes these issues to be critical in determining where he or she fits into the fabric of American society. I propose that all of these are actually “Shadow” issues: issues of great emotional import on a personal level, but which distract away from large-scale national issues that impact everyone in this country (what’s going on behind the curtain).

Please understand, I am not saying that issues of race or gender or whatever are irrelevant. What I am saying is that these issues are used to segment us into smaller groups of people based on specific interests/ personal issues so that we fail to see the BIG issues that dominate all of us. After all, it’s much easier to distract people when they’re not united but fighting amongst themselves.

Indeed, the 2008 election illustrated this more than anything. Critical issues were mainly shunned in order to focus on minor-issues such as whether women would vote for Hillary Clinton simply because of Gender or whether Barack Obama was “black” enough to be the first black President.

Imagine how different the political process in the US would be if the following had received mainstream coverage during the ’08 election:

  • The US financial system is largely insolvent courtesy of an unregulated derivatives market that is 50+ times the size of the US GDP. 
  • Real incomes in the US peaked in 1972 and have been in a steep decline ever since courtesy of outsourcing and the US’s shift from a manufacturing economy to a financial services economy (in 2003 nearly $1 out of every $3 dollars made by a publicly traded company went to the financial sector).
  • Nearly 80% of all bills passed by Congress between 2004-2008 were “suspension bills,”¾ bills in which only 40 minutes of debate are allowed, no amendments can be made, and only two-thirds majority vote is needed to pass.

Those are just a handful of the issues that concern every American. In contrast, race, gender, political orientation, even gender are Shadow issues: issues that divide us and keep our attention rapt because they elicit strong emotional responses and agendas.

Indeed, let us consider how these Shadow issues segment the population. Below are some data points regarding the various groups created when one divides the US population in terms of gender, race, political orientation and the like.

Issue Groups Created
Gender 151 million women, 146 million men
Race 228 million White, 46 million Latino, 37 million African American, 13 million Asian, 3 million Indian
Political orientation Republican 90 million vs. Democrat 85 million (notice this only adds up to a little over half the total US population)
Religious Views 217 million Christian, 3 million Jewish, 2.4 million Buddhist, 1.7 million Jehovah’s Witness, 1.4 million Muslim, 1.4 million Agnostic

Just a brief look at the above data reveals that the issues of Race, Gender, and Religion trump Political Orientation in terms of significance. It’s also worth noting that each of these “Shadow” issues breaks the US population into one primary majority and several minorities.

Here are the three largest majority groups as a percentage of total US population:

Majority Group Percentage of Total US Population
White 75%
Christian 71%
Women 50.9%


I propose that the real division amongst the American people is based not on social issues (race, religion, political views) or biological issues (gender). I believe the real divide is based on LAW.

Remember, the US as a political system is entirely based on a complicated legal framework. And while the boundaries erected by race, religion, even gender, have begun to blur, the legal boundaries are as rigid today as they were the day the Constitution was framed.

With that in mind, by law, the American public is broken into two groups of people:

  • Individuals
  • Legal entities or businesses

Under American law, a business entity receives the same rights as an individual. It can own property, it has freedom of speech… in fact, a recent Supreme Court ruling permits corporations to directly spend on political campaigns just like individuals. This means that Goldman Sachs and Exxon Mobil are now freely permitted to use their billions in direct donations to political candidates.

However, while having the same rights, individuals and business entities have very different responsibilities. Let’s say I go dump a gallon of oil into a local river. If I’m caught doing this, I can face a fine of up to $2,000, potentially serve six months in jail, and perform up to 200 hours of community service (depending on where I do it).

In contrast, Exxon Mobil dumped 15,000 gallons of oil into Boston’s Mystic River last year and was fined $6 million. That sounds like a lot of money, except it’s basically what Exxon makes in three hours of business. No one went to jail. No one spent an afternoon cleaning up a highway or some other civic project. The fine (a joke) was it.

The distinctions between individual and corporate responsibility extend to taxes as well. You or I have to pay taxes on our income according to basic tax law. However, large-scale corporations are regularly permitted to prepare two sets of tax books (one for the public/ SEC, the other for the IRS).

I realize this point sounds a bit “conspiracy theorist” but it is commonly known in the financial community. Consider the Goldman Sachs or GE stories located below.

Goldman Sachs’s Tax Rate Drops to 1%, or $14 Million

 Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007… The company’s effective income tax rate dropped to 1 percent from 34.1 percent… The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.


GE: 7,000 Tax Returns, $0 U.S. Tax Bill

General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0…

Many politicians and media outlets like to lament the US’s high corporate tax rate. However, according to SmartMoney magazine, between 2000 and 2005, US corporate taxes amounted to only 2.2% of US GDP. In contrast the average for the 30 countries that comprise the Organization for Economic Cooperation and Development (OECD) was 3.4% (54% higher).

Regarding tax responsibility, the following article helps explain how Big Business is permitted to get away with such low taxes:

Tax Audits of Big Business Are Declining, Study Says

An analysis of data from the U.S. Internal Revenue Service by a nonpartisan research group shows that the agency is reducing its auditing of the biggest businesses. The Transactional Records Access Clearinghouse found that the IRS audited one of four of the largest companies in 2009, the lowest rate in more than 20 years… 


Some of these tax differences are due to the inherent differences between individuals and large-scale business. I, as an individual, am required to remain a citizen of a particular tax jurisdiction. If I choose to remain a US citizen, I have to pay the US income taxes on any earned amount over $87K even if I reside in a foreign country year-round and make all of my income abroad.

Large-scale corporations, on the other hand, can move their business segments to whichever tax jurisdiction they please. A few years ago Halliburton and other large multinationals moved their headquarters to Dubai drawn by the 0% corporate tax rate there.

I propose that this is the real divide in the US: that between individuals and large corporations. The former group comprises the majority of the US population. However, the latter group is granted the greatest freedom. It also holds the greatest political clout due to its massive cash coffers and extensive lobbying efforts.

In this sense, I believe we are truly in something of an Oligarchy in which the political process, proposed legislation, and various regulations are largely controlled by an extremely tiny portion of the population.

So while we’re taught in school that the US is a Democracy founded on The Declaration of Independence’s proclamation that “all men are equal,” I believe that the reality is that the same economic imbalances that governed the US’s political system at the signing of the Declaration (namely that only wealthy, white landowners could vote) still exist today… though the system is no longer controlled by votes but by money.

And corporations happen to have the most of it.

To continue reading this piece (you can download the whole article free), click here.

For the sake of this discussion I am solely focusing on corporations, however, unions and large association groups can also be considered within the “Big Business” category .

Good Investing!

Graham Summers

PS. If you’re worried about the future of the stock market, I highly suggest you download my FREE Special Report detailing SEVERAL investments that could shelter your portfolio from any future collapse. Pick up your FREE copy of The Financial Crisis “Round Two” Survival Kit, today at:

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2010 Copyright Graham Summers - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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06 Aug 10, 13:40
Melting Pot

That paradigm died in the "60s when people suddenly became Black-Americans, Irish-Americans, Mexican-Americans, or Whatever-Americans instead of just plain Americans. Instead of trying to learn "American" customs and speak proper English, most Americans (including White Anglo-Saxon Protestants) have been either trying to resurrect their ancient culture or to create some new exotic "global" culture. The "American Melting Pot" that truely existed a century ago has long faded away - and with it, the glue that held this country together. Goodbye America!

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