Back in the 30s, Tom Watson of IBM was asked by Wall street to talk to his friend FDR and ask him to back off his planned regulations. FDR’s answer was something like, “Tom, you go back and tell your banker friends that I’m trying to save this country’s economy. And if I succeed, I will have saved them too.” Even in those days, bankers were short sighted. FDR succeeded and they benefited from the improved economy, and spent all their time hating him. Stupid, stupid.
Fast forward to the 50s. Income tax on ordinary income was in the neighborhood of 90% over a certain level. Sounds terrible, right? Wrong. We were suffering financially from WWII and then Korea so DOD needed the money. But it had a huge beneficial effect. First of all, corporate management didn’t want big salary, tax too high. So they got stock options, instead. The result was that management had to do a good job in order to make their options worth something. Golden parachutes were not very common. It did another thing. Since capital gains taxes were very low, about 20%, people with large salaries invested it in new ventures because if they didn’t, the government took most of it. They had nothing to lose and a lot to gain if their investment made it big. Essentially they were investing the government’s money in ventures that, if successful, were taxed at %20. It was a good deal. So as a result, there was incredible capital available for the corporate development of the 60’s. The whole computer and technology industry and our world technological leadership was funded by these people who didn’t want the government to take their money. Federal funding for NASA didn’t hurt either. (Gee, Federal spending!!) It was a boom time. Another factor was strong unions which kept wages up despite the dumb scream by business that we weren’t competitive.
Fast forward again. Reagan did his best to continue the destruction of union power which began with Taft-Hartley in the 50s and continued with firing the Air Traffic controllers. There has been an incessant push to destroy unions which are the only entities that keep our wages up so that people can live. Scott Walker and his ilk. Unions insist that increases in productivity are shared with labor and don’t all go the the bottom line. Unions, plus high tax on ordinary income kept the income disparity acceptable. Clinton, no favorite of mine damn him, signed the repeal of Glass-Steagall act in 1998 which set the banks free to bring our economy to it’s knees. It took only 10 years.. So what do we have now? Corporate managers raping their companies to get golden parachutes as a punishment when they resign or get fired for messing up their companies. Then nothing trickles down because they have no incentive to invest. They put their money into politics to buy elections which further encourages their short-sightedness and blatant greed and the corruption which we call lobbying, the lobbying that sees to it that we don’t interfere with their greed. We bail out the banks because we are told they are too big to fail. They take that money and pay big bonuses to themselves and then spend millions lobbying to repeal Dodd-Frank which, in a very small way, tries to keep them from doing it over again. They don’t care about you. If they did, they wouldn’t be so greedy and selfish. They wouldn’t ignore climate change and environmental travesties caused by industry. You have a Republican knife in your back and you don’t even know it. That’s the secret of their success, put a knife in the back of ordinary working people and convince them that they are helping them. The American electorate is the dumbest in the western world.
Out political system is bought and paid for. It has even driven liberals to the right because they need the money to get elected.
Listen to Bernie Sanders and Elizabeth Warren’s messages. Every word of it is true and they don’t mince words.
Frankly There was once a time but these days, I cannot fathom how anyone votes Republican.
