Where is Ross Perot when we need him?
Perot focused his 1992 presidential campaign on reducing the Federal deficit put in place by President Reagen and his congressional supporters, which helped win Clinton the White House. Then Perot campaigned against the “giant sucking sound” of jobs going to Mexico because of the North American Free Trade Agreement. We now have a giant sucking sound that outdoes both of Perot’s issues : the sound of the wealthy sucking money, jobs, and security from average Americans.
Not since 1929 has gap between the wealthy and the rest of us has been so large, and we know what happened then. Not until it was widely recognized that demand was lacking, and only government could raise demand in the short term, did things improve.
Despite loud and emotional appeals to “faith-based economics”, the wealthy (including large, wealthy multinational corporations) do not collect money to spend it; they hold on to it until they see a reason to invest. That’s the problem today. There is plenty of money “in circulation” but so much is being held in cash by the wealthy, that the money does not “circulate,” requiring the government to pump more funds into the economy to get it moving.
On the other hand, imagine if these wealthy were taxed at a reasonable level (can you say, eliminate the Bush tax cuts) and that money passed on to the rest of us, who actually spend money every day for things we need. As Joe collects his salary he buys bread at the bakery, gets a haircut at the barber, has his oil changed at the service station. The baker, barber, and gas station owner then take his money and buy their own groceries, grooming, and services. Joe’s salary does not sit in a bank account waiting for “better times.” And that is the problem in a nutshell.
One way to measure this disparity is to compare the highest earners with minimum wage. 20 years ago the ratio was 40:1; today it is more than 800:1. Why the difference? The standard homily is that you need to pay top dollar to get the right leadership, but that is not true. According to Reuters, “Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That’s less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world’s fourth-largest bank, JPMorgan Chase & Co.”
Out-of-control CEO salaries in the United States result from passivity among the wealthy stakeholders who exchange responsibilites across multiple boards-of-directors. Then when these high-paid managers fail catastrophically, U.S. taxpayers spend money to bail them out. Without penalty. And then these same U.S. taxpayers are told that corporations need more money to re-start the economy. Do people even listen to what they are saying?
There can only be two final results. The most likely option is that voters will eventually wake-up and realize that “fear words” and “scare tactics” around “socialism” and “tax breaks create wealth” are simply marketing statements without substance. The other option is that this trends continues into the future until our nation is cleaved into two societies, the Morlocks and the Eloi.
You decide which is living off the other.
