Part I: The US Empire As A System

Petras distinguishes between who sets policies and rules America and whose interests are served. He defines the ruling class as "people in key positions in financial, corporate and other business institutions" with rules "established, modified and adjusted" as the composition and "shifts in power" within the ruling class change over time. One example is manufacuring's decline (from outsourcing to low cost countries) as a "multidimensional financial sector" (finance capital) rose in prominence with Wall Street's influence especially dominant.

Petras defines "finance capital" to include investment banks, pension funds, hedge funds, saving and loan banks, investment funds and many other "operative managers" of a multi-trillion dollar economy they've all benefitted hugely from. They've been the driving force powering real estate and financial markets speculation, agribusiness, commodity production and manufacturing. Petras calls "finance capital" the "midwife" of wealth and capital as well as a "direct owner of the means of production and distribution."

He stratifies it into three sub-groups from top to bottom in importance: big private equity bankers and hedge fund managers, Wall street executives, and senior officials of private and Wall Street public equity funds as well as major figures in top law and accounting firms. Political leaders are drawn from their ranks with Wall Street in the lead and one firm in particular standing out - Goldman Sachs. Today, its former CEO Henry Paulson is the de facto US economic czar in charge of proving doomsayers wrong about the US economy with Federal Reserve Chairman Ben Bernanke's money creation power partnered with him. Both of them must also navigate around the powerful Israeli Lobby and its pro-war agenda that could lead to catastrophic consequences if the US and/or Israel attack Iran and the Middle East explodes and disrupts oil flows.

Petras sees an inevitable split between wealth-first financial ruling class objectives and militarists in the Bush administration, their counterparts in Israel, and the Lobby representing Israeli interests with a stranglehold on most of Congress. The battle lines shape up over Israeli Middle East dominance at the cost of imperial overreach, an escalating trade deficit, a ballooning national debt, decreasing capital inflows to offset it, and a declining dollar as other nations move to euros, yen and pounds sterling. Something has to give, says Petras, as both sides support opposing agendas that only a crisis-provoking widespread backlash may resolve.

For now, however, things couldn't be better for the ruling class (despite their disrupted plans in Iraq and Afghanistan) with the top 2% of adults in the world owning half its wealth, the top 10% with 85% of it, and the bottom half with just 1%. The result is an unprecedented wealth disparity with corporate CEO's on average earning over 400 times the median income of wage and salaried workers, and for top-earning speculators and hedge fund managers the ratio is 1000 to one with some having incomes topping a billion dollars a year. In addition, corporate wealth was at a record 43% of 2005 national income accruing to profits, rents and other non-wage/salary sources compared to a declining percentage of it to individuals, except for those at the top gaining hugely.

Petras states: "The growth of monstrous and rigid class inequalities reflects the narrow social base of an economy dominated by finance capital" with the US redistributing far less to its people than other developed nations like those in Western Europe. Democrats are as culpable as Republicans with both parties tied to big monied interests through campaign funding and the power of lobbies. It makes everyone in the political power structure unwilling to change things so they don't. The result is working Americans suffer hugely while those at the top never had it so good. It signals warnings of a potential worker backlash ahead that for now have gone unheeded. Elitists ignore it at their peril, so far without negative consequences to their dominance, but watch out.