People disgusted with capitalism sometimes lament that the other systems have not really been tried, that the powerful and ambitious hijacked and perverted them. While that may be the case, it might also be that such hijacking and perverting were inevitable. It is a natural, if often tragic, aspect that leaders often seek privilege for themselves (their reward in their eyes for all they do as leaders).
Many European companies do not have CEO pay any higher than 7-10 times that of the lowest paid worker. In 1980, the average CEO pay in America was 42 times that of the average hourly worker. By 2005, it was 262 times. As Obama rightly relates, this has had little to do with improved performance. “In fact, some of the country’s most highly compensated CEOs over the past decade have presided over huge drops in earnings, losses in shareholder value, massive layoffs, and the underfunding of their workers’ pension funds” (where those funds even exist anymore) at a time when average workers’ income was flat or in decline. (62) Where is the sharing with employees of the effects of bad times in the company, let alone sharing in the productive gains of good times? Those CEOs are big on getting concessions from union members during “hard times,” but don’t want to sacrifice at all themselves.
This is Robber-Capitalism in action. Protected by insulated and pliant boards, and a political system and media they heavily influence (and sometimes control), they don’t have to be fair, or show remorse, or be accountable. They ARE the power. And every time those who champion “freedom,” “democracy,” “free markets” and the like so loudly, while at the same time condemning so strongly the very idea of government, they merely reinforce the death-grip of the enslaving class. Every time they speak out about some cultural issue while remaining mute about corporate malfeasance against the republic and its citizens, it is not just a mark of hypocrisy, it is serving the masters with invisible self-chains.
“We ran up the national credit card so that the biggest beneficiaries of the global economy could keep an even bigger share of the take.” Obama 188, where he sounds just like David Stockman today (but the Obama of today has been relatively silent on the matter).
We still wave away the fact that we acquiesced, with barely even a breath of acknowledgement, let alone regret, to: two wars, military budget nearly doubled, prescription drug entitlement, earmarks that went up by 2/3rds, and massive tax cuts for the wealthy, and from budget surpluses to massive debts. It IS collective denial. We made this shiv (in my friend’s T9 speak). The bulk of this debt is the result of tax cuts, 99% of which went to the top 5%. And yet what do we show approval of? 60% approved, apparently (if we can believe big business-controlled media) of the recent extending the tax cuts for all that got us in this mess. We ran up the debt, putting us in debt to foreigners who might not have our best interests at heart.
“If there’s class warfare going on in America, then my class is winning.” (Warren Buffet, 2nd richest man in the world). As Obama relates, even without tax shelters or a tax planner, Buffet pays a lower effective tax rate than his receptionist, or average Americans in general. In fact, his rate is about half his receptionist’s. This is because, like most wealthy Americans, nearly all of his income comes from dividends and capital gains, two things generated by the buying, holding, and selling of corporate stock and stock related financial instruments, and two things taxed at rates nearly one third of what they were thirty years ago. See any pattern here? Corporations and the “elites” who run them have manipulated the system to give themselves the most benefit, regardless of what it does to anyone else, and regardless of what that does for education, for infrastructure, for research and development, for safety nets that allow citizens to feel they have a chance to make it economically and to feel like actual citizens instead of used up and discarded commodities. All of those things are not only starved from lack of money coming to them, but must be propped up on money borrowed from foreigners.
I don’t like taxes on productive things, like employment, or buying a house and fixing it up and selling it for a profit. Those things are economically productive, and produce tangible benefit to individuals and society. Manipulating stock prices (as CEOs and hedge funds do) to make money, on the other hand, largely benefits only the individuals and small group of investors involved, and worse, often comes at the expense of economic productivity, as short-term and short-sighted decisions are made selfishly by closing plants, slashing labor, slashing research budgets, etc. All of which affect the long-term negatively, and often to the detriment of the society that has to pay those costs directly and indirectly.
Assuming (perhaps a bit of fantasy given corporate influence) that Americans could force their representatives to address this, they would also have to address it at the international level, for the system has become worldwide. Which runs into American fear of supra-nationalism or international governing agreements, a fear ingeniously and deviously fomented and manipulated by the corporate ruling class because it allows that class to always threaten the ultimate escape valve. What is that valve, you say? That if Americans and their representatives ever start to make rumbling noises about reining in this system of corporate excess and exploitation, the corporations and their money will largely move off-shore somewhere, leaving the American economic and financial system to collapse. Without new international agreements, what they threaten is very doable. Certainly the money could move in a matter of hours, probably only minutes. All because they have set it up that way.
Perhaps we know why George Carlin said, “America, you’re owned.”
Since we’re fantasizing here, if the above limitations were not the case and we wanted to change things, we would give the wealthy class a direct incentive to quit starving government of its needed things and quit transferring government’s money to themselves indirectly via unneeded things. How? By upping the capital gains rate back to the 40% it was 30 years ago, but this time only for the sale of financial instruments. And set it so this capital gains tax disappears entirely once the national debt is paid off.
I know, I know, if I think like this too much, I might be participating in the general illusion/delusion culture too! :)
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