by Evert Cilliers
The freer the market, the more people suffer.
Look what happened after Bill Clinton signed the two bills that deregulated Wall Street with the repeal of Glass-Steagall (the firewall between regular and speculative banking) and the removal of derivatives from all oversight: Wall Street tanked the world.
And who got bailed out? The crooks of Wall Street, not their victims.
Socialism for the rich, and capitalism for the rest of us (as MLK put it).
The free market means freedom for the rich, and oppression for everyone else.
At the end of WW2, for every buck in taxes collected on individuals, Washington collected $1.50 on business profits. Today, for every buck collected on individuals, Washington gets 25 cents from business profits.
Remember that one. Sear it into your brain. Staple it on your cerebellum. Since Reagan, the tax burden has been neatly shifted from business to individual people, from GE (who never seems to pay ANY taxes in any given year) to you and me.
Then add this: the marginal tax rate on the richest individuals went from 91% after WW2 to 35% today, and is actually, for hedge fund billionaires, 15%, and for the second richest American, Warren Buffett, 17% (as he never tires from pointing out, “my secretary pays a higher tax rate than me”).
The top 25 hedge fund managers earn a billion dollars a year each. Making these 25 people pay taxes at the level that middle-class people pay taxes would cut $5 billion a year off the deficit. And that’s just making a mere 25 people pay taxes like the rest of us.
If we had a top tax rate of 90% today, the 25 hedge fund managers who make an average of one billion dollars a year would make a $100 million each — and we would be able to pay the salaries of 658,000 more teachers.
You pay a higher tax rate than Warren Buffett, GE or Goldman Sachs (who typically pay between 1% and 2% taxes a year). Plus millions of rich Americans park their money off-shore to avoid paying taxes.
That’s taxes. How about wages?
We used to have a Ford economy: Ford doubled the wages of his workers to the outrage of his fellow manufacturers because he wanted them to afford the cars they built.
Today we have a Walmart economy: Walmart pays their workers so little, they have to go on food stamps. Your taxes subsidize the richest family in the world, the Waltons.
If wage gains had kept pace with productivity gains, today the average household income would be $90,000 per year instead of around $50,000 a year. Think what a thriving economy we’d have if that were the case. But no, the income from those productivity gains did not go to the productive workers, but to their bosses.
CEOs, who are probably less productive than before, got the productivity gains of their workers. CEOs have been stealing $40,000 a year from their workers. (BTW, if ordinary workers got their salaries raised the way CEOs have, they’d each be making $200,000 a year.)
Joseph Stiglitz puts it well: “How the market has altered the way we think is best illustrated by attitudes toward pay. There used to be a social contract about the reasonable division of the gains that arise from acting together within the economy. Within corporations, the pay of the leader might be 10 or 20 times that of the average worker. But something happened 30 years ago, as the era of Thatcher/Reagan was ushered in. There ceased to be any sense of fairness; it was simply how much the executive could appropriate for himself. It became perfectly respectable to call it incentive pay, even when there was little relationship between pay and performance. In the finance sector, when performance is high, pay is high; but when performance is low, pay is still high.”
OK, that’s taxes and wages. How about education?
Property taxes fund education, so rich neighborhoods have good schools and poor neighborhoods have shitty schools. Inequality gets passed down from generation to generation.
The GI Bill gave thousands a free university education and opened up universities to the non-elite. Community colleges used to be free. Today? Try getting an MBA: it will cost you $100,000 a year.
America isn’t a country anymore: you know, a place that serves its people.
America is a total f-up.
With the biggest f-up of presidents imaginable, whose first months in office have so far been an utter disaster.
Trump might be worse than even Bill Clinton, the disaster who signed the bills that gave us the 2008 Wall Street fraud f-up and the Great Recession, the disaster who gave us mass incarceration, the disaster who gave us welfare “reform”, the disaster who outsourced our jobs with NAFTA, and the disaster who could have but did not prevent the Rwanda genocide. Although maybe not worse than George W. Bush, the disaster who presided over the murder of between a hundred thousand and two million innocent Iraqi women and children, the worst war crime since the Nazis. Or Barack Obama, the not-quite-disaster who gave Wall Street fraudsters a get-out-of-jail-free card.
Without proper redistribution, regulations and unions, people got so miffed, they voted for Trump.
Agent Orange as president.
Call us the cruel society, not the fair society (how would you like to be a pig or a chicken on a factory farm?).
Forget about a government works program, which we sorely need, to fix up our crumbling infrastructure, and to give everyone a good job. Why can’t the government give everybody a job when the private sector is useless at it? Or if it can’t do that, why can’t we have universal basic income now that robots are doing more and more of our work?
The paradox is this: automation increases productivity, but concentration of wealth at the top decreases demand for what that increased productivity produces, because ordinary folks have less money to spend. This leads to an increase in debt relative to income so folks can suck up the increased production. That’s why there HAS to be greater income equality — otherwise runaway debt will end up bankrupting the economy.
Listen up, Davos. The most basic job of any democracy is to stop the elite from stealing everything. In the Nordic countries and Germany, they manage to do that.
In America, not.
As Joseph Stiglitz writes: “Market fundamentalism has eroded any sense of community and has led to rampant exploitation of unwary and unprotected individuals.”
We have ourselves a very pretty plutocracy, where the aristos screw the peasants, instead of a working democracy, where redistribution mitigates the inequalities of capitalism, regulations stop corporations from ripping off people and the environment, and strong unions secure workers a living wage.
We have ourselves a Davos neoliberal Friedman-Hayek-Ayn Rand fraudster paradise. A free market instead of a fair market. Socialism for the rich, capitalism for the rest of us.
Capitalism needs to be regulated, because otherwise it trends only one way: to monopolies that destroy competition (witness the Amazon-Google-Facebookfuckification of our lives).
So, Davos, let me ask you this: what do you want, an economy that works for you, or for everybody? What do you want to create: a successful you, or a successful society?
Which one could you be proud of?
Over to you, dudes of Davos. Let’s see if you can be human beings, or continue to be the scum of the earth.