Saturday, September 09, 2006

Where did all the money go

Starting with the Kennedy tax cuts money was bled from American business into the CEO class. That is not the investors, who were increasingly as screwed as the workers (as many were the workers, Pension plans etc. ). Small businesses have always struggled, but high taxes forced them to reinvest or pay the taxes. Most reinvested.

The high taxes were not high as long as the money removed was small so the differences in salary from top to bottom was as low as seven fold with the big boss making $35,000 and the janitor making $5,000, and most of the value went into increased production, better quality etc. I recall reading there was a new record breaking wage (after the Kennedy tax cut) of $800k and the race was on.

Since most giant businesses were managed by a tight ole boy network at the top salary was a matter of power, and CEO salaries leap ever skyward, with top management close behind. The stockholders were either in Mutual funds with infinitely diluted control, or if they were investing individually, had neither the clout or the ability to investigate adequately, and in nearly every business the rules were crafted to lessen the power of investors.

As smaller businesses tried to keep up there was a perception that their own leadership was slipping into second class status, and having the power to do so they also began to siphon off needed investment moneys. Never put in such stark terms (mostly), still there was an orgy of "consolidation" where good businesses were mined for their assets (worker pension funds among them) and the husk tossed away.

Many Billionaires were thus created, but it was the wealth of the thief not the hard worker. Many folk owned bonds with AAA rating one day and junk status the next, and as most of those moneys were hidden, so were the losses. Everywhere where folk did not have power, on the job, in a pension, or mutual fund, even many small businesses, they were robbed.

Even in the Government, when Reagan took office, the government was the largest landlord, mostly in public housing with trillions in assets. In one of the most under reported stories of the time, the man in charge had had a fire sale to all his friends at pennies on the dollar, in theft unmatched till the current administration. Then even that was defaulted (with much more theft) as these same friends cratered most American Banks.

With all that theft, how did Americans manage? Savings were eliminated, most American middle class had a lot of savings, today they don't. Real wages were cut in half, where there had been only the father working, now both father and mother had to work to keep the same lifestyle. Benefits like pensions and health care were "HMO'd" "down sized" or eliminated altogether (vacation times and rules included).

Many former or "would have been" workers spent their life savings to "buy themselves a job" and became "small businessmen" but that did not solve the problem and in many cases made it worse, providing intermittent services that used to be full time jobs, and competing on price, did the job ever cheaper, and even if they employed others and made money from them it only spread the pain.
Europe and Japan did not, at first, get this disease. Low top salaries and heavy reinvestment cratered American market share, and high taxes meant that wealth was shared as shorter work hours and longer vacations. I met with a German executive about some shared technical issues that we needed to work out, and he was aghast at what Americans put up with. The very idea that an 8 hour day did not include the lunch hour and a couple of breaks was the ultimate in management chiseling.

If today Europe is sickening from slow business it is not just that workers are well treated (and ever less so) but that in the global economy the kleptocrats at the top are ever less satisfied with salaries first at seven times average, then the next I heard 27 times, now hundreds of times the salaries of the folk on the shop floor. The investors aren't getting the money, stock prices and dividends have risen slowly if at all.

It is kleptocracy that is ruining the world.

1 comment:



One evening an old Cherokee told his grandson about a battle that goes on inside people.

He said, "My son, the battle is between 2 "wolves" inside us all.

One is Evil. It is anger, envy, jealousy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.

The other is Good. It is joy, peace, love, hope, serenity, humility,
kindness, benevolence, empathy, generosity, truth, compassion and faith."

The grandson thought about it for a minute and then asked his grandfather:

"Which wolf wins?"

The old Cherokee simply replied, "The one you feed."

from an old tale.

The Golden Rule
“That which is hateful to you do not do to another ... the rest (of the Torah) is all commentary, now go study.”

- Rabbi Hillel



The self made man just isn't admitting how or where he came by all those parts

---FreeDem---- Aug 2005


If a man tells you that the Government cannot accomplish anything of value, then voting for him would be like hiring an Amish Auto Mechanic.
If they don't believe in the concept, they are more than likely to do a very poor job of it.

---Bob Danforth Sept. 2009


Republicans never meant to cut government waste, fraud and graft, from the get-go their plan was to organize, monopolize and privatize waste, fraud and graft.

They see the civil service as meddling “middleman,” who interfered with the free flow of cash from taxpayers into corporate coffers. Their intent was to eliminate the “middleman” as an obstruction to corruption.

---Unknown rabblerowser Feb 2007


No one can terrorize a whole nation, unless we are all his accomplices.

Edward R. Murrow

In the beginning of a change, the patriot is a scarce man, brave, hated and scorned. When his cause succeeds, however, the timid join him, for then it costs nothing to be a patriot

Mark Twain


You see, we often get noncreative leaders, people most interested in preserving their own positions. They flock around centers of power. Such centers attract people who can be corrupted. That is a more descriptive observation than to say simply that power corrupts and absolute power corrupts absolutely.

If you are corruptible and your imagination is confined to worries about loss of power, you exist in a self-destructive system. Eventually, as all life does, you must encounter something you did not anticipate, and if you have not strengthened your creative resources, you will have no new ways for adapting to change. Adapt or die, that's the first rule of survival.

The limited vision of noncreative people is not difficult to understand. Creativity frightens the unimaginative. They don't know what's happening. Things new and unexpected arise from creativity. This threatens "things as they are." And (terrible thought) it undermines illusions of omnipotence.


Herbert 1984 (the year not the book)


"News is what powerful people want to keep hidden; everything else is just publicity."

....Bill Moyer


Just as having only a hammer makes every problem either look like a nail, or as something irrelevant, our very technological skills have had us look there for explanations and ignore reality it cannot deal with. With our powerful hammer, we seek only nails, and dump the rest as dross. Not all questions involve hammers, not all answers are nails.
-- Freedem---Nov., 2006

My issue with Atheists is not that they have no God, there are many religions that have no God, but that they have no religion.
-- Freedem---Nov., 2006

__Note: by this I mean that there are many things religions do besides the discredited "science" and self serving promises (give me your money and God will hold and pay the note), many like charity or fellowship, even social accountability can be very good things not requiring a God.


Many have been very disappointed that their "God-critter" was not to be found as a technology swimming about in the shallower pools of knowledge. So in the obsession basic to our culture, we search ever deeper and more difficult pools, and always the "God-critter" seems to wink at us from the pool just beyond.

In the process we have found technologies beyond the wildest dreams of our most sophisticated ancestors. The great joke is that the "critter" never existed except as the pools themselves.

----Freedem --- Oct 2006

Indeed I do think that many folk, believe all kinds of stuff from the actually true, to the utterly illogical, with no personal discernment one from the others. But that would hardly make any of them a scholar to rely on, any more that one should get their theology studies from a door to door salesman, offering "get out of hell free" cards, on special because the creator of galaxies in greater numbers than beach sand, nonetheless has an ego so weak He cannot exist without shamelessly excessive psychophancy from a major portion of the inhabitants of this particular dust speck.

----Freedem ---June-2007

More to come