Back in the time of Dickens
Slim were the pickins
As enterprise owners
Enforced a servitude
Without benefit or bonus
For the emerging multitude
By trimming the wages
For workers in cages
While claiming piety
So that they held the wealth
And much better health
And we had anxiety
Back in 1960, there was a brash business professor at MIT who looked at the world of work and saw something fundamentally wrong with the assumptions often made by those in power as managers and owners of enterprise in the developed world. Douglas McGregor wrote The Human Side of Enterprise mostly as a cautionary tale of motivation gone wrong. He postulated that the assumptions made by those leaders in business (or politics or the military) were critical in enabling the motivation of the followers and workers. Essentially, he said that if you make “Theory X Assumptions” about workers; that they are lazy and untrustworthy and must be coerced or coopted into working, then motivation is largely extrinsic and fleeting at best. By demonstrating a lack of trust in workers, the leader risks failure and potentially increasing costs for doing business. On the other hand, if the leader adopts “Theory Y Assumptions” that work is as natural as play and that people can enjoy their work and can be trusted to complete tasks and be productive, then motivation becomes more intrinsic and less monitoring and enforcement is required. Trust is exhibited in specific ways, including how rewards are applied and how decisions are made. A manager who appears to be playing favorites erodes motivation and a manager who constantly monitors employees and demonstrates distrust destroys motivation.
Fast-forward to the 1990s and the ability of mega-firms to create and destroy organizations without input from employees and you have the perfect brew for anxiety. Romney and Bain Equity, through its equity management have repeatedly entered organizations and stripped assets including pension funds and have cut jobs or shipped jobs overseas as the employees were merely onlookers to the process. Protective unions were long gone and even management was helpless in the downsizing and seizure of assets. Clearly, the first casualty of the process was trust, but close behind that injury was the generation of anxiety in workers losing, not only their jobs, but their dignity, self worth and optimism for life. Men or women responsible for providing nourishment and shelter for their families were then subject to the whims of an arbitrary system where they were made to feel bad by applying for unemployment compensation or even food stamps. Remember that the cause of their predicament is not of their doing, but imposed by a legal form of enterprise that immediately sets up winners and losers and creates stress and pain in powerless workers.
Picture the typical layoff. “This is nothing personal. You have been a good and loyal employee, but because of circumstances beyond my control, we have to let you go.” Immediately, there is nothing more personal. Your hopes, dreams, your way of living and concept of self are smashed and your very life is threatened by a legal but destructive ploy over which you had no control. Many of us have had this experience, and frequently, it was due to mismanagement by senior executives who gambled with your security and future and lost. I recall heading the training department for a bank that suddenly decided to enter international lending. They threw out all the safeguards of domestic lending and opened an office in London that quickly lent money to international shipping. Worse, they lent money for oil tankers. Still worse, all the tankers were from one country, Greece. Soon, the oil market collapsed and my employer was stuck with a bunch of tankers sitting in the port of Athens. I got the “nothing personal” speech along with my entire department and my bank was purchased by a bigger bank that soon met the same fate for similar mismanagement. I am certain that bank conveyed the same “nothing personal” speech.
Have we changed materially since the days of Dickens? No, not really, but the methods have morphed and the stakes have become higher since people believed the rhetoric about becoming participants in this ownership society and invested in homes when prices were high and banking treachery was higher. So now, being laid off also means losing your home instead of being kicked out by your landlord. If you call that progress, you have a high threshold for pain. Bain or its counterpart just ate your lunch by confiscating your pension, but it was nothing personal, thank god. You are reduced to standing in line to get unemployment compensation and soon you are further embarrassed to show your food stamp card at the supermarket. In a few states, you also have to pee in a bottle to prove that you are not on drugs before you qualify for food stamps because you are getting “government” money (much like the conservative politicians on the government payroll except for the peeing in a bottle part). So far, only 2% of these recipients have tested positive for drugs while 9% of the general population tests positive for drugs, yet the assumption continues that people are lazy and that they WANT to get food stamps to avoid work. Could things be any worse? Of course, you could have the House of Representatives cut off your unemployment compensation. Once again, conservatives there are claiming that paying unemployment compensation will be a disincentive for you to find work. I guess that they assume that you enjoy peeing in a bottle and living on the street, losing your pension and begging for food. How could I have missed the joi di vivre?
Simply listen to the conservative candidates in debates and speeches and you will discover that “people on welfare WANT to be there.” “They DON’T want to work.” The assumptions are both incorrect and dehumanizing. How humiliating it must be to lose your job because Romney crushed your company and grabbed your pension and then you have to apply for food stamps. Gingrich follows with his invective that blacks especially should learn to be school janitors so that we can bust unions and hire kids “who don’t have good role models.” Unfortunately, many black kids live in homes or on the street where their parents have to work two and more part time jobs without healthcare simply to buy food and shelter. Rick Santorum specifically mentioned blacks receiving welfare and then denied it despite the clear video where he pronounced it for perpetuity. Their assumptions drive their heartless and brainless policies. Fundamental assumption: The poor are causing the problems in our society.
Tax policies are the most interesting. “Everybody should pay some taxes.” Now that sounds fair, doesn’t it? Except for the fact that even the poorest pay local taxes although they may not pay federal income taxes because they have no income. Sure, Mittens Romney pays taxes like a good boy, and although it is less than 15%, it is all legal, right? While true, it is also true that Bain and other equity and investment companies lobbied Congress directly and forcefully to qualify dividend income and “carried interest” income at lower rates than any worker on a paycheck. Romney helped write the law. Mittens was also able to contribute a $100 Million gift to his sons in one year without the usual tax. In fact, he paid no tax on that gift. Now this may have been some sort of special trust arrangement, but limitations exist for each of us who may not have a crew of attorneys and accountants. Recently, we were restricted to $11,000 and, since 2011, that has been raised to $1 Million annually in gifts. I guess Mittens could not wait a hundred years and surely, he could not afford the taxes. Every proposed tax scheme of conservative candidates will increase the taxes paid by lower and middle class citizens and reduce the taxes of the highest economic class. The rationale for trickledown has not changed, but neither has the reality. The “job creators” need the tax breaks to create jobs so that others can pay taxes. We have enjoyed ten years of the lowest tax rates for “job creators” in over 50 years and they have created no jobs, but continue to amass wealth so they can continue to influence tax legislation. Do you feel the trickledown? Maybe you spilled something from that bottle you had to pee in.
Peace,
George Giacoppe
10 February 2012
Showing posts with label Conservatives. Show all posts
Showing posts with label Conservatives. Show all posts
Thursday, February 09, 2012
Sunday, February 20, 2011
New Deal Redoux?
The amazing mobility of labor
Gave us all something to savor
Lifting oneself by the bootstraps
And closing society’s gaps
Work hard and stay clean!
And soon you rise on the scene
But far more than our mobility
Has been our inherent nobility
And world-class productivity
Of our mid-class working humanity
They work and they play
Full taxes they pay
Unlike the high and the mighty
Who use loopholes daily and nightly
The drama being played out in Madison, Wisconsin is being compared to the uprisings in Egypt. Wrong place. Wrong time. It should remind us of the heritage of our working middle class that was earned through the blood, sweat and tears of unions in the 1920s and 1930s. Conservatives of that time writhed in agony to witness the decline of Darwinian social politics and the rise of basic equality of opportunity in these United States. In the early days of the labor movement, state and even federal government sided with corporations to the point of brutal suppression of workers through gunfire and police batons. And the executive branch of government was not alone. Child labor laws enacted in 1916 restricted child labor to a minimum extent, however the Supreme Court overturned the Keating-Owens Child Labor Act of 1916 by their Hammer vs. Dagenhart decision in 1918 that encouraged exploitation of children in the workplace and as a ploy to maintain low wages. That remained a law of the land until 1933 when Congress again enacted legislation to restrict child labor. Again the Supreme Court declared the law unconstitutional in 1935. Later, FDR signed into law, the Fair Labor Standards Act of 1938. It was actually 1941 when a new Supreme Court finally affirmed FLSA as the law of the land and stopped the abuse. Only after 1938 were wages allowed to rise without interference from the Supreme Court and only through the concerted action of unions. Those of you who hold an image of the Supreme Court as wise and prudent interpreters of our laws need only review the history to see your error. Activist Supreme Court judges have ruled the bench for decades if not centuries. They supported corporations, not humans, and surely not children.
Were it not for unions, we would not today have the 40 hour work week nor the 8 hour work day. Safety in the workplace would be only at the will of the employer as in the days of the Manhattan garment workers fire in 1911 when 146 young women perished in a fire because the doors were locked. to keep them from taking breaks or leaving their work stations during their 72 hour work week. Management locked the doors to stairwells and women jumped to their deaths or burned in place. The International Garment Worker’s Union grew largely due to that fire. This is a time to remind the reader that unions were not some spontaneous expression of antagonism to management and corporations; they were instead caused by corporate and management abuse of power. Unions were an answer to capricious and arbitrary decisions about wages and working conditions. This was true in industry, in mining, in railroads and in all sectors of economic activity. At their peak in 1954, unions represented nearly 36% of American workers and had an influence that reached all economic sectors. It was about that time that corporate management and state governments felt that wages and, therefore, pensions had grown too large. As a result, “right to work” laws were enacted in many southern states. Quickly, textile and shoe and manufacturing corporations fled south where they got tax breaks, free land and other incentives to relocate their businesses. Unions shrank. In some “right to work” states the remaining unions were required to represent workers who paid no dues based on new laws. This was a blow both to union financing and to membership. Today, only about 7% of the private sector is unionized. Note that wages continued to fall without union protection and the flood of companies that surged into Alabama, the Carolinas and even Georgia and Tennessee did not stop their lower wage migration. They soon left to manufacture in Asia; first in Japan and then Taiwan and then Mainland China and even Vietnam and Malaysia. Once the cascade for lower wages begins, it becomes an unstoppable torrent that falls ever further to find the most depressed economies.
During this period, unions made concessions, perhaps in the hope of maintaining some of the jobs that were available and unions were characterized by corporations as the source of our economic problems. As a single example, the auto industry, notably GM, moved to “right to work” states to avoid unions. GM established Saturn in 1985, and it went out of business completely in 2010 without ever earning a single dollar profit in all the years it existed in Tennessee. GM had blamed unions for its woes when unsatisfactory leadership by CEO Roger Smith, unsatisfactory quality, especially in the early years, and competition with its other GM brands caused Saturn to fail. Failure had nothing to do with unions. Quality competition from Europe and Asia, where wages eventually became higher than American wages actually depressed GM sales along with other US automakers. Blame the unions? Boeing strove to kill unions with its 787 “Dreamliner” by outsourcing major components overseas. Result? Boeing is 3 years past due on delivery and billions over budget by not using their experienced union labor.
With the decline of union membership in US corporations, there came a nearly simultaneous, although mostly unrelated, growth in public sector unions. Once again, unions were caused and not a simultaneous expression of hatred for management. The largest single factor for public sector union growth was the simple fact that government jobs had been used as political capital for patronage and that workers had no control over being fired arbitrarily as a new party was swept into power. At the national level, civil service rules assisted workers to some extent, but that was reversed under GW Bush who wanted more freedom to “reward and punish performance” as he put the issue. In fact, patronage jobs went far deeper under GW Bush than any prior president. States quickly followed suit, except that unions were a stabilizing force that kept most workers on their jobs despite the political winds of change. That was good for both the workers and for people expecting continuity of quality public service despite varying election outcomes. The Bush model increased worker turbulance.
Fast forward to late 2007 and the continuing burden of a war of choice in Iraq and growing war efforts in Afghanistan and the collapse of the housing and lending industry due to malfeasance of corporate management and fundamental greed and…Poof! We have an unmatched fiscal and job crisis unseen since FDR’s days. Obviously, somebody should be punished for the widespread fraud and failure of our lending and our investment institutions. Pension funds, both individual and institutional, were devastated. Jobs were slashed. Balanced budgets became distant memories. Who can we punish? The perpetrators? Well, no. They are too big to fail. Let us get concessions from those who lost money in the pension funds and layoffs. Somebody has to pay. And so it came to pass that public sector unions and the real people who pay taxes were called upon to make new concessions. They did. Now if you can afford the tax accountants and attorneys to protect your income, you can still send your bonus dollars to the Grand Caymans for safekeeping.
Return to Wisconsin and Governor Scott Walker (bankrolled by Koch Industries) and you see the drama played out to bust unions and finally undo what FDR and unions wrought after years of fighting for some justice in treatment of labor. If unions are eliminated by this well financed conservative push, then you need to remember that it was unions that bargained collectively for each of us. I have never been a union member, but my pay was influenced by what unions derived at the table. Even in the Army, my pay was increased by what the postal workers were able to get through collective bargaining. If that is eliminated, then kiss goodbye to social and economic mobility as well as safety and stability. Bye to safety nets like public education, Social Security and Medicare. Say hello to the new robber barons and their conservative supporters who will finally undo the New Deal and present the Raw Deal. Unions, weak as they are, may be our last best hope to preserve education, dignity and mobility in these United States. We are moving from the justice of the people to the “just us” of the Oligarchs. Please speak up before it is too late. Maybe it is also time to impeach a few of the “Supremes” for conflict of interest.
Peace,
George Giacoppe
20 February 2011
Gave us all something to savor
Lifting oneself by the bootstraps
And closing society’s gaps
Work hard and stay clean!
And soon you rise on the scene
But far more than our mobility
Has been our inherent nobility
And world-class productivity
Of our mid-class working humanity
They work and they play
Full taxes they pay
Unlike the high and the mighty
Who use loopholes daily and nightly
The drama being played out in Madison, Wisconsin is being compared to the uprisings in Egypt. Wrong place. Wrong time. It should remind us of the heritage of our working middle class that was earned through the blood, sweat and tears of unions in the 1920s and 1930s. Conservatives of that time writhed in agony to witness the decline of Darwinian social politics and the rise of basic equality of opportunity in these United States. In the early days of the labor movement, state and even federal government sided with corporations to the point of brutal suppression of workers through gunfire and police batons. And the executive branch of government was not alone. Child labor laws enacted in 1916 restricted child labor to a minimum extent, however the Supreme Court overturned the Keating-Owens Child Labor Act of 1916 by their Hammer vs. Dagenhart decision in 1918 that encouraged exploitation of children in the workplace and as a ploy to maintain low wages. That remained a law of the land until 1933 when Congress again enacted legislation to restrict child labor. Again the Supreme Court declared the law unconstitutional in 1935. Later, FDR signed into law, the Fair Labor Standards Act of 1938. It was actually 1941 when a new Supreme Court finally affirmed FLSA as the law of the land and stopped the abuse. Only after 1938 were wages allowed to rise without interference from the Supreme Court and only through the concerted action of unions. Those of you who hold an image of the Supreme Court as wise and prudent interpreters of our laws need only review the history to see your error. Activist Supreme Court judges have ruled the bench for decades if not centuries. They supported corporations, not humans, and surely not children.
Were it not for unions, we would not today have the 40 hour work week nor the 8 hour work day. Safety in the workplace would be only at the will of the employer as in the days of the Manhattan garment workers fire in 1911 when 146 young women perished in a fire because the doors were locked. to keep them from taking breaks or leaving their work stations during their 72 hour work week. Management locked the doors to stairwells and women jumped to their deaths or burned in place. The International Garment Worker’s Union grew largely due to that fire. This is a time to remind the reader that unions were not some spontaneous expression of antagonism to management and corporations; they were instead caused by corporate and management abuse of power. Unions were an answer to capricious and arbitrary decisions about wages and working conditions. This was true in industry, in mining, in railroads and in all sectors of economic activity. At their peak in 1954, unions represented nearly 36% of American workers and had an influence that reached all economic sectors. It was about that time that corporate management and state governments felt that wages and, therefore, pensions had grown too large. As a result, “right to work” laws were enacted in many southern states. Quickly, textile and shoe and manufacturing corporations fled south where they got tax breaks, free land and other incentives to relocate their businesses. Unions shrank. In some “right to work” states the remaining unions were required to represent workers who paid no dues based on new laws. This was a blow both to union financing and to membership. Today, only about 7% of the private sector is unionized. Note that wages continued to fall without union protection and the flood of companies that surged into Alabama, the Carolinas and even Georgia and Tennessee did not stop their lower wage migration. They soon left to manufacture in Asia; first in Japan and then Taiwan and then Mainland China and even Vietnam and Malaysia. Once the cascade for lower wages begins, it becomes an unstoppable torrent that falls ever further to find the most depressed economies.
During this period, unions made concessions, perhaps in the hope of maintaining some of the jobs that were available and unions were characterized by corporations as the source of our economic problems. As a single example, the auto industry, notably GM, moved to “right to work” states to avoid unions. GM established Saturn in 1985, and it went out of business completely in 2010 without ever earning a single dollar profit in all the years it existed in Tennessee. GM had blamed unions for its woes when unsatisfactory leadership by CEO Roger Smith, unsatisfactory quality, especially in the early years, and competition with its other GM brands caused Saturn to fail. Failure had nothing to do with unions. Quality competition from Europe and Asia, where wages eventually became higher than American wages actually depressed GM sales along with other US automakers. Blame the unions? Boeing strove to kill unions with its 787 “Dreamliner” by outsourcing major components overseas. Result? Boeing is 3 years past due on delivery and billions over budget by not using their experienced union labor.
With the decline of union membership in US corporations, there came a nearly simultaneous, although mostly unrelated, growth in public sector unions. Once again, unions were caused and not a simultaneous expression of hatred for management. The largest single factor for public sector union growth was the simple fact that government jobs had been used as political capital for patronage and that workers had no control over being fired arbitrarily as a new party was swept into power. At the national level, civil service rules assisted workers to some extent, but that was reversed under GW Bush who wanted more freedom to “reward and punish performance” as he put the issue. In fact, patronage jobs went far deeper under GW Bush than any prior president. States quickly followed suit, except that unions were a stabilizing force that kept most workers on their jobs despite the political winds of change. That was good for both the workers and for people expecting continuity of quality public service despite varying election outcomes. The Bush model increased worker turbulance.
Fast forward to late 2007 and the continuing burden of a war of choice in Iraq and growing war efforts in Afghanistan and the collapse of the housing and lending industry due to malfeasance of corporate management and fundamental greed and…Poof! We have an unmatched fiscal and job crisis unseen since FDR’s days. Obviously, somebody should be punished for the widespread fraud and failure of our lending and our investment institutions. Pension funds, both individual and institutional, were devastated. Jobs were slashed. Balanced budgets became distant memories. Who can we punish? The perpetrators? Well, no. They are too big to fail. Let us get concessions from those who lost money in the pension funds and layoffs. Somebody has to pay. And so it came to pass that public sector unions and the real people who pay taxes were called upon to make new concessions. They did. Now if you can afford the tax accountants and attorneys to protect your income, you can still send your bonus dollars to the Grand Caymans for safekeeping.
Return to Wisconsin and Governor Scott Walker (bankrolled by Koch Industries) and you see the drama played out to bust unions and finally undo what FDR and unions wrought after years of fighting for some justice in treatment of labor. If unions are eliminated by this well financed conservative push, then you need to remember that it was unions that bargained collectively for each of us. I have never been a union member, but my pay was influenced by what unions derived at the table. Even in the Army, my pay was increased by what the postal workers were able to get through collective bargaining. If that is eliminated, then kiss goodbye to social and economic mobility as well as safety and stability. Bye to safety nets like public education, Social Security and Medicare. Say hello to the new robber barons and their conservative supporters who will finally undo the New Deal and present the Raw Deal. Unions, weak as they are, may be our last best hope to preserve education, dignity and mobility in these United States. We are moving from the justice of the people to the “just us” of the Oligarchs. Please speak up before it is too late. Maybe it is also time to impeach a few of the “Supremes” for conflict of interest.
Peace,
George Giacoppe
20 February 2011
Tuesday, November 09, 2010
Undoing the New Deal
The depression was not so Great
And almost nobody ate
Millions had no shoes
Only lawbreakers had the booze
The poverty was grinding
While the nation was finding
A way from the third level of hell
And yet the wealthy did well
In reading the recent biography of FDR A Traitor to his Class by H. W. Brands, lots of interesting facts glared out at me from the pages of the book. Some were related to the personal life of Franklin Roosevelt, but many more were related to the disturbing parallel of the roaring twenties and the depressing thirties to recent times. Foremost among these is that the record corporate profits of today were also the center of the economy of the twenties. In the US, especially, corporations saw record profits as well as reckless speculation in the stock market. Of course, there were differences as well. Only perhaps 15% of the nation was invested in stocks. We now boast of at least 70% participation. Today, we have derivatives that schemers in the 20s did not. Instead of today’s Tea Party extremists and neo-Nazi militia, we had militant Ku Klux Klan and Communist agitators as well as real Nazi sympathizers stirring up hate, discontent and isolationism. Famous people including aviator Charles Lindbergh supported Germany directly and he received a Nazi Medal of Honor presented by Hermann Goering.
Perhaps it is more difficult for folks to peacefully share poverty than it is for them to share the good times. We tend to define differences more sharply in recessions and depressions. During the thirties, blacks were still being lynched, European and Asian immigrants were attacked and humiliated, while today, Hispanic immigrants and Islamic citizens seem to be hated and under attack. Agitation was actually a bit more common then than now with government in the 1920s often supporting ruthless suppression of crowds whether they were unions seeking fair wages or WW I veterans seeking their bonuses promised for service in WW I. In Anacostia, part of the District of Columbia, President Hoover ordered General MacArthur to disperse the 20,000 veterans. He did, brutally using cavalry with swords drawn. The injuries to veterans and the death of an infant in the assault stunned even Hoover who had ordered the action. Child labor in the US was not stopped until 1938 when FDR signed the Fair Labor Standards Act. That was successful largely because adults were competing with children for the same low wages during the depression. A regressive Supreme Court had earlier ruled that children must be given the right to contract for their labor, although they were prohibited from most other contracts. Earlier legislative attempts to force the Supreme Court to respect children in the workplace were fruitless. Our current Supreme Court is not alone in being right wing in makeup. The late 19th and early 20th centuries fostered highly conservative Supreme Courts, similar to today. There was no economic or social safety net except the generosity of neighbors. The American ideal of self-sufficiency was the basis for government policy. The Poor House was the alternative.
Wealth was concentrated in the upper echelons of society to a point not to be seen again until today. Worker productivity until the crash of 1929 was high, however there were problems of sharing productivity gains with workers. That has again occurred with executive salaries and bonuses exceeding a level of 400 times that of the average worker despite record employee productivity. Strangely, the main argument defending harsh treatment of millions of hungry citizens was nearly a verbatim prediction of today’s conservative response to hungry and frightened people of today. “The promise of America is opportunity, not a handout.” Hoover expressed the thought that if citizens were given a handout, it might create a dependence on continued handouts and that people would lose any motivation to work. Today, we have heard almost identical words being echoed by leaders of the conservative elements of the Republican Party as a reason to not extend jobless benefits. Then, as now, politicians resisted unemployment assistance. When a priest in Pittsburgh marched with 12,000 workers to help get unemployment consideration, four were killed in the process. We now know that the conservatives will fight any extension of the unemployment payments to millions of out-of-work men and women. This lack of empathy is cloaked in a “rugged individualism” rhetoric now as it was then and yet they see no connection between their support from government and support of the less fortunate. Coal miners at Matewan, West Virginia were attacked by a detective agency hired by the owners and 12 people were killed. Violence by owners to avoid unions was common and union retaliation became a fact of life. The conservative distrust and even hatred of unions had its beginnings in the New Deal when FDR attempted to level the playing field by encouraging management negotiation with unions. Management did so only under duress and not really until early war production to sell to the British.
The history books are filled with the examples of failed conservative policies that protected the wealthy business owners while government policy was essentially laissez faire with the idea that prosperity was cyclical and that it was all right if some people were hurt or starved in the process of waiting for the cycle to right itself. That was the natural way. The thirties saw the insertion of the Glass-Steagal Act (FDIC, etc.) and Social Security that conservatives even today are trying to eliminate or emasculate by replacing it with defined contributions into privatized stock plans. Can you imagine our individual and family pain and chaos in this current recession if GW Bush had succeeded in replacing Social Security with privatized investment? Maybe you should listen closely to the conservatives, read back to the Great Depression and think hard, because that is our current direction despite the fact that we have the lowest tax rate since 1950 at less than 10% on average. The cry to reduce our deficit caused mainly by two wars of choice may sound appealing, but it is only crying wolf unless the wealthy are willing to give a little to let the real spenders of the middle class help save the republic, its economy and its self respect.
Conservatives are trying to undo the New Deal. To them, regulation is un-American and real freedom is the freedom to hurt everybody except the bankers and large corporations who must be bailed out. The little guy is just that. Little. Big is just that…and too big to fail. What an American concept! Freedom fries the little guy. Freedom gets Big a free lunch.
Peace,
George Giacoppe
10 November 2010
And almost nobody ate
Millions had no shoes
Only lawbreakers had the booze
The poverty was grinding
While the nation was finding
A way from the third level of hell
And yet the wealthy did well
In reading the recent biography of FDR A Traitor to his Class by H. W. Brands, lots of interesting facts glared out at me from the pages of the book. Some were related to the personal life of Franklin Roosevelt, but many more were related to the disturbing parallel of the roaring twenties and the depressing thirties to recent times. Foremost among these is that the record corporate profits of today were also the center of the economy of the twenties. In the US, especially, corporations saw record profits as well as reckless speculation in the stock market. Of course, there were differences as well. Only perhaps 15% of the nation was invested in stocks. We now boast of at least 70% participation. Today, we have derivatives that schemers in the 20s did not. Instead of today’s Tea Party extremists and neo-Nazi militia, we had militant Ku Klux Klan and Communist agitators as well as real Nazi sympathizers stirring up hate, discontent and isolationism. Famous people including aviator Charles Lindbergh supported Germany directly and he received a Nazi Medal of Honor presented by Hermann Goering.
Perhaps it is more difficult for folks to peacefully share poverty than it is for them to share the good times. We tend to define differences more sharply in recessions and depressions. During the thirties, blacks were still being lynched, European and Asian immigrants were attacked and humiliated, while today, Hispanic immigrants and Islamic citizens seem to be hated and under attack. Agitation was actually a bit more common then than now with government in the 1920s often supporting ruthless suppression of crowds whether they were unions seeking fair wages or WW I veterans seeking their bonuses promised for service in WW I. In Anacostia, part of the District of Columbia, President Hoover ordered General MacArthur to disperse the 20,000 veterans. He did, brutally using cavalry with swords drawn. The injuries to veterans and the death of an infant in the assault stunned even Hoover who had ordered the action. Child labor in the US was not stopped until 1938 when FDR signed the Fair Labor Standards Act. That was successful largely because adults were competing with children for the same low wages during the depression. A regressive Supreme Court had earlier ruled that children must be given the right to contract for their labor, although they were prohibited from most other contracts. Earlier legislative attempts to force the Supreme Court to respect children in the workplace were fruitless. Our current Supreme Court is not alone in being right wing in makeup. The late 19th and early 20th centuries fostered highly conservative Supreme Courts, similar to today. There was no economic or social safety net except the generosity of neighbors. The American ideal of self-sufficiency was the basis for government policy. The Poor House was the alternative.
Wealth was concentrated in the upper echelons of society to a point not to be seen again until today. Worker productivity until the crash of 1929 was high, however there were problems of sharing productivity gains with workers. That has again occurred with executive salaries and bonuses exceeding a level of 400 times that of the average worker despite record employee productivity. Strangely, the main argument defending harsh treatment of millions of hungry citizens was nearly a verbatim prediction of today’s conservative response to hungry and frightened people of today. “The promise of America is opportunity, not a handout.” Hoover expressed the thought that if citizens were given a handout, it might create a dependence on continued handouts and that people would lose any motivation to work. Today, we have heard almost identical words being echoed by leaders of the conservative elements of the Republican Party as a reason to not extend jobless benefits. Then, as now, politicians resisted unemployment assistance. When a priest in Pittsburgh marched with 12,000 workers to help get unemployment consideration, four were killed in the process. We now know that the conservatives will fight any extension of the unemployment payments to millions of out-of-work men and women. This lack of empathy is cloaked in a “rugged individualism” rhetoric now as it was then and yet they see no connection between their support from government and support of the less fortunate. Coal miners at Matewan, West Virginia were attacked by a detective agency hired by the owners and 12 people were killed. Violence by owners to avoid unions was common and union retaliation became a fact of life. The conservative distrust and even hatred of unions had its beginnings in the New Deal when FDR attempted to level the playing field by encouraging management negotiation with unions. Management did so only under duress and not really until early war production to sell to the British.
The history books are filled with the examples of failed conservative policies that protected the wealthy business owners while government policy was essentially laissez faire with the idea that prosperity was cyclical and that it was all right if some people were hurt or starved in the process of waiting for the cycle to right itself. That was the natural way. The thirties saw the insertion of the Glass-Steagal Act (FDIC, etc.) and Social Security that conservatives even today are trying to eliminate or emasculate by replacing it with defined contributions into privatized stock plans. Can you imagine our individual and family pain and chaos in this current recession if GW Bush had succeeded in replacing Social Security with privatized investment? Maybe you should listen closely to the conservatives, read back to the Great Depression and think hard, because that is our current direction despite the fact that we have the lowest tax rate since 1950 at less than 10% on average. The cry to reduce our deficit caused mainly by two wars of choice may sound appealing, but it is only crying wolf unless the wealthy are willing to give a little to let the real spenders of the middle class help save the republic, its economy and its self respect.
Conservatives are trying to undo the New Deal. To them, regulation is un-American and real freedom is the freedom to hurt everybody except the bankers and large corporations who must be bailed out. The little guy is just that. Little. Big is just that…and too big to fail. What an American concept! Freedom fries the little guy. Freedom gets Big a free lunch.
Peace,
George Giacoppe
10 November 2010
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