Despite what you may think, the economy has recovered. On Oct. 14, the Dow Jones Industrial Average, the best barometer of the stock market, hit 10,000. There has been much criticism that while the Dow has passed 10,000, unemployment will likely soon reach 10 percent. Many have heaped scorn on Federal Reserve Board Chairman Ben Bernanke’s recent statement that the recession is “very likely over.”
These critics contend that we are experiencing a jobless recovery; that only Wall Street is benefitting from the recovery and not the economy as a whole. These people, while well intentioned, have missed something fundamental, which has occurred in America. Wall Street and big corporations aren’t simply a part, or even the leaders, of our economy; they are the economy.
America’s major corporations: Exxon, Goldman Sachs, Wal-Mart and Bank of America are what really comprise are economy. And what’s worse: they own this country. They have bought and own the Congress and the judges. They own the media, all the TV networks, newspapers, magazines and radio stations. This country has been bought and paid for. It was a smart buy, too. The best way to run a corporation is to recklessly make the most profit with no consequences. But how do you protect yourself from failure? You become the economy. You ship jobs out of the country, you consolidate all the money, you merge into fewer and fewer companies, you control so much money the country integrally depends on you. You become, simply, too big to fail.
How did we get here? Well, this country has experienced two major economic collapses in the last hundred years: the Great Depression and today’s crisis, which you might call the Great Recession. One of the least noted common links between the two are what happened to the top tax rates before each collapse. From 1921 to 1925, the top marginal tax rate was cut from 73 percent to 25 percent. From 1980 to 1988, the rate was cut from 70 percent to 28 percent. Both of these moves made for one large re-distribution of wealth. Each led to a cratering of the economy, with only the rich staying afloat. In the 1930s, workers were able to win rights; because rich industrialists couldn’t rebuild the economy without workers in the 1930s. Sadly, that’s no longer the case.
And now we come to the most distressing aspect of our economy today: in every sector, corporations make employees work harder for less pay and are constantly firing thousands upon thousands.
Last spring, Americans were shocked at the audacity of bailed out firms, like AIG, sponsoring elaborate retreats, and now we’re outraged about the spat of lavish executive bonuses. The public seems to wonder whether these people have any shame. They do not. They believe they deserve those bonuses, by the way, because they believe they deserve it more than you. They think they’re better than you; they have to live with themselves. They don’t care about you or anybody else, they just want more money, and Congress is never going to stop them. Our only hope is that our president happens to be one of the few politicians not bought and paid for.
Nick Field is a sophomore in the School of Public Affairs and a liberal columnist for The Eagle. You can reach him at edpage@theeagleonline.com.
