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The Era Of Cutthroat Hyper-Capitalism—And $40 Million Tossed To The Foxy Guy Under The Bus
We have been down this rock-strewn pathway before. It happens about every three generations because humans have short attention spans, and those who forget history usually repeat it. Capitalism works for everybody only with the condition that we have social mobility--which can only be achieved through education. Everybody has to have a shot at the “good life” by having access to a good education. We now have had about three decades of crony, cutthroat capitalism which has created the worst income inequality in U.S. history. Much of the middle class has been destroyed. Education is now marked by declining support for PreK-12 public schools and obscene spiraling tuition costs in higher education. College students have assumed a massive personal student loan debt totaling over $1.3 trillion that will make it impossible for them to enjoy the fruits of their education for decades to come. About 30% of college graduates have been forced to live with their parents because of low-paying jobs and huge monthly student loan payments. Most cannot buy cars or homes—or even afford rent. Less than 20% of newly-constructed homes are entry-level homes because millennials between the ages of 18 and 34 cannot afford to buy them
Meanwhile the rich keep avoiding reality—living in some kind of personal Shangri-La, spending like money will never go out of style. Karl Marx wrote about the ravages of capitalism in his book Das Kapital. A signed first-edition of his book is being put up for auction and is expected to bring in over $180,000. We should do a case study on the capitalist buyer. I wonder how many middle class football fans will attend the new $1.1 billion Viking stadium where the cheapest seat is $50 (somewhere on the outer rim), and the concession prices are not family-oriented: hot dog, $6; hamburger, $9; beer (20-ounces), $9; soda or water (16–ounces), $5.50; burger with tater tots, $20.50; chicken tenders and fries, $9.50, and chicken nachos for $9. The one item that really threw me was a box of Cracker Jacks for $4.75. They were a childhood favorite. If you are not rich enough to see the game from an executive suite above the peasants, you can seat your family of four for the first season near the 50-yard line for the eight home games for $50,800. That’s close to the average annual salary for a Minnesotan. Season tickets range from $50 to $400 per seat per game—and a license fee of $9,500 per seat for the really good seats for the first season—if you agree to buy season tickets for 30 years.
The Legacy Of Moral Capitalism
The Caux Round Table is an international network of business leaders working to promote “moral” capitalism. This organization labels crony cutthroat capitalism immoral. A Harvard University study reveals that today’s millennials favor an economic system used by Scandinavian countries known as democratic socialism. That’s why Bernie Sanders captured 48% of the Democratic primary vote. Robert MacGregor, co-chair of the Caux Global Governing Board, points out that Minnesota has more major foundations developed by moral business leaders than practically any other state. He points out that the “common good” philosophy of Bruce and Ken Dayton, founder of Dayton’s and now Target, helped create the success of that retail behemoth: “We believe the great work for American businesses and our private foundations is to ensure our cities regenerate themselves as dynamic centers, socially, economically, and culturally. Profit is our reward for serving well with integrity.” Business leaders like the Daytons are noticeably absent from the business scene today. Rapacious leaders like Jack Welch of General Electric now dominate big business and its “next quarter” attitude instead of decades. They are interested only in keeping shareholders happy instead of making sure the cities they operate in are “regenerated” by big business. We used to lead the world in the social mobility of our citizens. We are now the worst in the western business world.
Donald Trump, filled with the hyperbolic braggadocio of the pathological liar, has claimed on the campaign circuit that US citizens pay the highest taxes in the world. Fact: we don’t even make the list of the top 25 countries with the highest individual income tax. Sweden is #1 at 57%, Papua New Guinea is 25th at 42%. But more important as far as tax comparisons go, the 34 countries of the Organization for Economic Cooperation and Development (OECD) study taxes as a share of the Gross Domestic Product. US taxes are very low compared to those in the other 33 OECD countries. We are in 32nd place at 24%, counting the taxes levied by all levels of government. Denmark tops this list at 47%, with the average of all countries at 34%. Chile is in 33rd place at 22%, Mexico last at 19%.
What Benefits Do Citizens Earn In High Tax Democratic Socialist Countries?
Norway is seventh on the OECD list at a tax rate of 43%. Here are a few of the benefits Norwegians and other Scandinavian workers are eligible for:
1. Norwegian workers work only 1,418 hours per year, the lowest in all of Europe. Danish workers put in 1,430 hours, Swedish workers, 1,621 hours. A recent study in Norway indicated that a shortened work week from 40 to 30 hours actually increased productivity. American workers put in an average of 1,790 hours. Workers at Wall Street investment banks in the US often put in 120 hours per week. Some Wall Street banks limit their employees to 75 hours per week—with no overtime.
2. A national law requires all workers to have a month of vacation each year. Workers in stressful occupations receive more days. Productivity studies indicate that Norwegian workers produce 27.8% more in the same period of time when compared to US workers. Sweden is now exploring a six-hour work day.
3. Working hours in Denmark and Norway may not exceed nine hours a day or 40 hours a week. Flextime, or the ability to schedule your own work, is becoming popular in Scandinavian countries. Researchers have found that workers in countries with wide income gaps do two to three months’ extra work per year.
4. Nordic people do not shirk work. Between the ages of 15 and 64, 73% of Danes have jobs, Norwegians are at 75%, Icelanders at 79%, and Sweden at 74%. The United States is at 67%, and OECD countries average 66%.
5. Norwegian parents receive a paid leave of absence when a child is born. Over 90% of fathers use their quota while 16.5% go beyond the authorized amount. Danish parents receive 52 weeks of fully paid parental leave.
6. A new mother in Norway on the job is guaranteed two hours per day to breastfeed a child. If the dad takes care of the baby at home when the mom resumes her job, he can bring the baby to the workplace for feedings. Most businesses offer daycare on-site.
7. Parents with children get 20 days of sick leave per year to take care of a child.
The Top 1% Have Not Recovered Fully From The Great Recession Of 2007-08
But they can still buy a lot of beans. The incomes of the 1% went up 37% between 2009 and 2015, reaching an average of $1.36 million. In those six years the 1% made an average of $61,700 a year. The bottom 99% was not so fortunate. In those six years they made $583 a year reaching $48,800. Roger Ailes, now the ex-president of Fox News and the propaganda expert on the subject of Republican family values, is still a member of the 1%, even after chasing pretty Fox News girls around the office, patting them down, and propositioning them. A $40 million settlement for pinching, propositioning, and negotiating sexual favors ain’t bad. This gives capitalism, represented by Rupert Murdoch, a bad name. $40 million to get run over by a bus? What have our economic principles come to?
Here’s another example of capitalism “gone wild.” Not too long ago Yahoo had a value of about $125 billion on Wall Street. Verizon just bought it for $4.8 billion. That’s practically pennies on the dollar. Marissa Mayer was named to lead Yahoo into a more promising land in 2012. Over the four years she has been paid $139.6 million while doing slow rollovers into a big ditch. If she resigns or is fired she has a golden parachute of $54.9 million! What would she have been paid if she had actually turned it into a successful enterprise? If the manager of a local hardware store had lost half of his customers in four years, what would have been done with his parachute? The cord would have been ripped off. Yahoo lost one-third of its value in 2015. It did make $7.5 billion in 2014—but lost $4.4 billion in 2015. Yet she made $36 million in 2015! Such “rules of the business game” drive workers who have lost their jobs or who have not received a raise for decades to the loud-mouthed Trumps of the world. Yahoo again represents cutthroat hyper-capitalism in a world where wages are shrinking, median household income continues to drop like a rock, workers are “You’re Fired!!” by Trumps masquerading as leaders, where workers are classified as “independent contractors” and left without benefits of any kind, and where two-thirds of the workers in the United States are living paycheck to paycheck.
If You Think Government Should Be Run By A Business Leader, Think Hoover And Harding
Some people think that it takes business expertise to run a government. Well, it might help a little. Herbert Hoover and Warren Harding had business skills, but Hoover’s policies created Hoovervilles around the country for unemployed workers, while Harding spent his time creating the Teapot Dome scandal while having sex in a closet with one of his mistresses. It’s ironic that Harry Truman lost his butt as a haberdasher in Kansas City but turned into a president with a sterling reputation for honesty—and leadership.
We should know after all of these depressions, recessions, and inflations that running a government and trying to make profits for your investors are two completely different operations. While businesses seek profits, governments do all the dirty work of providing a climate so profits can be made. Nothing wrong with making profits, but sometimes greed overwhelms commonsense—and the common good. Government does the unprofitable stuff, like building airports, bridges, flood diversions, roads, sewers, water treatment plants, dams, wells, and other necessary infrastructure. It has the job of providing an education for every citizen. It spends billions providing national defense and security. The Navy even protects Exxon oil tankers around the world. It encourages and supports young and critical industries—for the common good.
But because of political failures to support education, infrastructure construction and maintenance, national broadband construction for business, government and education purposes, the US middle class is no longer the world’s model. Middle-class incomes in Canada, all of Scandinavia, and much of Western Europe are now higher than any in the US. Even the poor in Europe make more money than poor Americans. But we lead the world in numbers of billionaires and millionaires, and they lead the world in utilizing tax havens scattered around the world from Panama to Pacific islands back to Delaware and South Dakota. A recent survey of Wall Street bankers revealed that 25% of them would break laws to make $10 million. I would like to remind the rich that an Indian millionaire who ordered a solid gold shirt made of 14,000 pieces of 22-carat gold weighing 7.3 pounds of 22-carat gold (worth $240,000) requiring the work of 15 craftsmen over 16 days was recently murdered by 12 people carrying knives and stones. Sometimes that happens when a society has a huge income gap and fools try to run it.