What’s a robber baron to do
When he doesn’t get what he wants
Should he threaten the whole ship and crew
Or jet to one of his haunts
To an Alpine or Cayman bank
Then dine with a few of his rank
On the finest food and whine
From the Potomac to the Rhine
That redistributing wealth
Is bad for his health
As news announcer Gabriel Heatter used to say: “There’s good news tonight!” (You may be on Social Security if you
remember Gabriel). Our economy is
within about 6% of where it was at the height of the bubble and before the
catastrophic collapse. There is
also good news for the very wealthy, for they have scooped up 93% of the wealth
created since the economic collapse in 2007. Corporate profits are at record highs and so is the stock
market. Income taxes for
individuals and corporations are at the lowest level in about 50 years. One might ask: What are they complaining about? You may have been making some logical
assumptions that this is pure economic wailing by the wealthy. Actually, the pain may be mostly social
by those who see themselves as the only rightful heirs of our nation. They may feel they earned 100% of the money
and the irresponsible 99% have brazenly dared to steal 7% of the “new” wealth. There has always been a big disparity in
wealth and the bottom half reached a high point in wealth in 1995 when they
held 3.6%. That plush condition
fell to 1.1% after the “Bush” collapse, mainly due to home equity losses of the
middle class. Plutocrats do not
relate well to the rest of us and they take special steps to reinforce the
distance. Allow me to cover some
of the differences and you may begin to understand why the new robber barons
are fearful of social development, education, taxes (especially inheritance taxes)
and voting by the hoi polloi. Those could be dramatic game changers.
In my youth, really, I caddied summers for the years from
age 10 to 18. When I began, the
compensation for one bag of clubs for 18 holes was 75 cents. I was not allowed in the clubhouse, but
for that matter, neither were Jews, Blacks and Latinos. In fact, I recall one Jewish gentleman
who became a Freemason in order to apply for membership. He was denied membership despite his
wealth, business success and Freemasonry.
He was allowed to play as a guest of a member provided he paid the fees. Unfortunately, that was common in the
“good old days.” Despite my low
wages that later improved to $1.25 per bag for 18 holes, there were no benefits
for caddies such as food or sanitation facilities except for the great outdoors. There was shade while you waited for
your name to be called. You gave golfing advice, found lost balls, and served
as a human donkey for all their belongings. And I was able to enjoy walking in sunshine and rain and
sometimes acting as a portable bar while the players had me carry rum and Coca
Cola along with glasses and ice. Please don’t lecture me on carrying alcohol
for adults. I depended on tips to
buy books for college and paid for all my tuition and books for three years at
Fitchburg State Teachers College (now University of Massachusetts,
Fitchburg). If you carried only
one bag and the average round took four hours, you can calculate that caddies
often earned well less than the minimum wage that was $ 0.50 per hour at the
time. I can hear you say: “That was then and this is now.” Fair enough. Allow me to present
examples from today.
The holding company that runs The Red Lobster and The
Olive Garden restaurants has recently changed its compensation package. It now pays wait staff $2.13 per hour
instead of the national minimum wage.
Additionally, they force the employees to work part-time without
benefits and they pool all the tips.
The last factor is especially delicious since they are imposing a collective
society to support a capitalist enterprise. I can begin to understand if some of Romney’s 47% feel
unmotivated if they are forced into a collective where the LCD (lowest common
denominator) is that clumsy waiter who spills soup and is rude to customers. He sets the pace for my compensation
and if I don’t like it, I can apply at McDonalds. Capitalism, Soviet style, may be the new model for US
business. David Siegel,
billionaire owner of Westgate Resorts, recently made this statement: “The economy doesn’t currently pose a
threat to your job (the company has never been so profitable). What does threaten your job however, is
another 4 years of the same Presidential (sic) administration.” “Of course, as your employer I cannot
tell you whom to vote for, and I certainly wouldn’t interfere with your right
to vote for whomever you choose.
In fact, I encourage you to vote for whomever you think will serve your
interests the best…If any new taxes are levied on me, or my company as our
current president plans, I will have no choice but to reduce the size of this
company…So, when you make your decision to vote, ask yourself, which candidate
understands the economics of business ownership and who doesn’t? Whose policies endanger your job?....” Hmm, it seems that we have privatized
threats while invoking the freedom to vote. That reminds me of Soviet rules where either you could work
or go to church, but not both. That was “freedom to worship” with a similar
vindictive outcome. And how is
smaller government the solution to that? It can look the other way, that’s how. We need larger
government to ensure mandatory trans-vaginal ultrasounds in seven states but
smaller government to prevent unwanted voting. Siegel is building a 90,000 square foot home in Florida. That sounds more like a warehouse, but I
can only assume that it is merely a cozy winter cottage and that he spends his
summers abroad; perhaps in the breezy Caymans.
Robert Murray of the Murray Coal and Murray Energy
Companies has gone a step further.
He has had employees actually contribute to Romney and has had them
stand on stage as a backdrop to Romney while Romney campaigned on stage and
while their pay was docked. Murray
claimed that he had suspended pay and a company spokesman said: “Attendance was mandatory but no one
was forced to attend the event.”
Let me think about that. Do
I want to eat today? I am
free to go hungry.
The message from these small business owners (moral
character, not business size) is both economic and social. Do as I say or look for work elsewhere,
and, by the way, I will set your pay, not the marketplace or a union. Your option is to work under my
conditions or not at all. Murray
is known for his many serious mine safety violations as well as his support of
conservative causes. Federal
Election Commission charges are pending for his pay docking and his
solicitation of money for Romney from workers. Don’t even think of collecting Social Security. Invest in a coal mine, or at least in
Robert Murray.
Look, I know that Siegel, Murray and Romney don’t want to
pal around with the likes of folks like me. In fact, Mittens is so concerned that one of his neighbors
in La Jolla, CA might actually talk to him in the driveway that he built a
3-car elevator to avoid all that and he hoists cars directly into his
enclave. The “one-percenters”
prefer the social company of one-percenters. It is nature’s way, after all, so that wealth can be
accumulated after redistribution in the way they like. Badgers associate with badgers, don’t
they? Maybe this is where we see
things differently. When I see $ 4
Billion being distributed annually to Big Oil in subsidies while they are
“earning” record profits and I am paying record prices for gas, I am a quick
read and understand that I am pretty low on the food chain. When I see that a paycheck earned on
the sweat of my brow or my education and training is taxed at twice the rate of
a hedge fund manager or vulture capitalist, I understand my place in life. It is not that I agree with the logic,
but I understand.
Sadly, all this has created a new kind of Social
Insecurity that does not portend well for our republic. It may inflict damage to our capitalist
system and sooner rather than later.
At some point, too few will be able to afford our goods and services and
there will be accelerating pain and suffering by the least affluent among
us. Then, the few grasping hands
of plutocrats and their heirs will choke off the system here-to-fore so well
equipped to raise both the hopes and the means of millions. The one-percent is insulated and does
not hear or feel the pain, yet the hallmark of our national success to date has
been our willingness to share both burdens and rewards. A simple recognition and “thank you”
might help, but it is not enough.
Thirty percent of our kids do not get enough to eat from day to
day. Can we afford another $4.8
Trillion in tax relief to double down on a trickle-down system that has never
worked and cannot work? There is a
reason why the proponents have not explained the arithmetic. There is no arithmetic to explain the
impossible and no matter how small we make government, it will not be zero. If one is to add up all the Romney
proposed reductions in taxes (20%) and multiply it by the anticipated personal
and corporate income, there is a shortfall of nearly $5 Trillion. Worse, if we expand military
expenditures by $2 Trillion beyond today when we spend as much as the next 17
nations combined, no matter how much the economy expands, our deficit will
explode. Consider this: If taking
all tax burdens from the wealthy worked to create jobs here at home, why has it
not worked over the past 11 years?
We are breaking profit records.
Have we used the wrong paradigm?
Do we make the wealthy complacent by feeding them too much through tax
relief? It is an ironic fact that
when taxes have been higher, that personal equity poured into our economic
system and employment was higher and income and wealth disparity was smaller. Could it be that the plutocrats are more
willing to take on risk when their taxes are higher instead of lower? Could they set concrete goals of
earning say $100 Million and then work to that end either by taking reasonable
risks or getting extra tax breaks? By hoping that the wealthy create jobs, are we acting
against our own interests by sating them with the lowest taxes since the
50s? Greed is only “good” if
investors take reasonable risks instead of bailouts by the government. That is how human motivation works to
our advantage. Do the wealthy envy
the very possibility that the middle class might share in the largess of our
nation? The wealthy may be rich,
but they are not stupid. If they
can reach their socioeconomic goals by doing nothing bur lobbying politicians,
why should they create jobs here?
Recall that any subsidy, any tax, any treatment of
inheritance or import/export duty redistributes wealth. Can we do this fairly and well? Our assumption that the wealthy will
automatically invest if we lower taxes on them is flawed. We redistribute wealth right now and
most of it goes to the wealthy who tend to hang on to it except for still more
resort homes. We reward personal
investment income more than wage and salary income. Do we want to further institutionalize that process through
excessive inheritances to eliminate the American dream of socio-economic
mobility? We have fallen from
first to about 20th among developed nations for socio-economic
mobility. While I have faith in
people, it seems smarter to have policies and systems that support that faith. Policies that reward job creation in
the US and punish exporting jobs and punish capital flow to low wage centers
might be a start. I might be
willing to wager my next Social Security increase to find out. A tax code that rewards wage earners
would put money in the middle class where it would be spent to propel the
wheels of commerce instead of gilding idle property or exporting jobs to world
low wage centers. In Romney’s now
famous secretly taped video, Mitt extols the virtue of Chinese workers who live
in communal housing at factories that pay only 24 cents per hour. Is that our destiny? If low wages are the only counterattack
to exporting jobs, then we need to reexamine our priorities. If education is out of reach of any
American, then we need to realign our priorities. If women are once again being treated as property and baby
machines as they are in seven conservative states, then we need to nationalize
freedom for women. If we have such
disparity in income that 30% of our children go hungry on any given day, then
we need to have a national dialogue on priorities.
Peace,
George Giacoppe
18 Oct 2012
