Company CEOs arrive at the White House in Washington, October 2, 2013, for a meeting of the Financial Services Forum with U.S. President Barack Obama. Pictured are (L-R) Lloyd Blankfein, chairman and CEO of Goldman Sachs, Robert Benmosche, president and CEO of American International Group (AIG), Keith Sherin, chairman and CEO of GE Capital, and Douglas Flint, group chairman of HSBC Holdings.REUTERS/Jason Reed (UNITED STATES - Tags: POLITICS BUSINESS)

“America’s claims to being a democratic society are seriously threatened.”



That’s the startling claim in a provocative new study by Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University.



Many of us like to believe that popular opinion influences policymakers, at least indirectly. But that doesn’t seem to be the case. “The general public has little or no independent influence” on policymaking, the two political scientists found.



Instead, Gilens and Page found that “economic elites” have a “quite substantial, highly significant, independent impact on policy.” Groups representing business interests are the next most powerful influence on policymakers. Sometimes, those two groups are aligned on an issue—they both tend to prefer low taxes, for instance--which generates the highest likelihood of government action.



The complex study examined 1,779 public policy issues between 1981 and 2002, including the policy preferences of middle-income people, the wealthy, and interest groups such as lobbying organizations, unions, and membership associations like AARP. The researchers then isolated instances when a policy change actually took place, to figure out who, essentially, got their way.

















Though the study period ended 12 years ago, similar dynamics seem to be in effect today. Consumer advocates such as Sen. Elizabeth Warren (D-MA) argue that the financial industry and its billionaire barons, for instance, still flex intimidating muscle on Capitol Hill, even after Wall Street nearly wrecked the whole economy. Billionaires such as Sheldon Adelson, Charles and David Koch and George Soros now donate vast sums to political causes through political action committees and third-party groups, and will now be able to give even more to individual politicians thanks to a recent Supreme Court decision.

Many of us like to believe that popular opinion influences policymakers, at least indirectly. So ordinary voters may be dismayed to hear that “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." On the other hand, that’s probably not surprising, given that crony capitalism has become the new sport of kings, the gap between rich and poor is widening and trust in government and other big institutions is crumbling.

This sounds pretty bleak, but it’s worth keeping in mind that well-connected elites have always been influential, and they may have had even more sway over policymakers during go-go eras such as the robber-baron heyday of the 1890s or the look-the-other-way government of the 1920s. The Gilens-Page study doesn’t get into historical comparisons.

Another mitigating factor: Sometimes ordinary people and the wealthy have shared interests, which means that if the rich get their way, the little guy does too. Most working people favor low taxes, for instance, whether you’re a billionaire or a thousandaire. Pro-business policies can be good for workers too, as long as they help create jobs and boost the economy. And while policies that help inflate the stock market (this means you, Federal Reserve) may enrich people who don’t really need it, they also help the 401(k) plans of middle-class savers.

Recent political history may also offer a bit of a counterpoint to the Gilens-Page study. One consistent preference of 1 percenters is smaller government and less regulation. Yet President Obama, who clearly favors something other than limited government, is now in his second term. And government regulation is swelling, not receding. The Affordable Care Act, which passed in 2010 and just went into effect last year, hardly serves the interests of the affluent. The 1 percent may have succeeded in preventing a full government-run healthcare system from forming, but the subsidized care available under the ACA to people living near the poverty line seems like it’s here to stay.

Still, there is no denying that moneyed interests strongly influence (and sometimes even write) laws and regulations, while thwarting a lot of government action that might harm their cause. The standoff between the rich and the rest might even intensify as fresh tradeoffs need to be made involving taxes, government spending and other increasingly urgent priorities. The outlook for democracy has certainly been brighter.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.