Soldiers and Mercenaries
In John Perkins' latest book "Hoodwinked", he compares recent CEOs of American companies to mercenaries. He says that in the good old days of post war America, CEOs were seen more like soldiers with loyalty to their company and community being number one. Now, CEOs are loyal to themselves and the guys who hire them. CEOs used to work for the good of country/company/community, but after 1980 they turned into hired guns who worked for the short term profit and their bonuses. It was a return to the Robber Baron age only much worse. Perkins had a professor of Business Management, Prof. Ashton, back in 1966 who taught that a businessperson was "obligated to serve his customers, as well as his stockholders. In fact he has a responsibility to the general populace to assure that his company operates according to the highest standards, in the public interest."
Well, that was the original idea that the founding brothers had in mind. They had just fought a war in large part to get out from under the monopoly of the British East India Company, the Wal-Mart of its day subsidized by the Crown. So the states would only grant charters to companies for a particular purpose and a particular period of time. Then the charter was dissolved. They could also be dissolved if they didn't keep their promises. And they were not allowed to consolidate i.e they could not gain monopolistic power.
Of course all this began to change in the late 1880s as the Robber Barons got laws changed to give them the rights of an individual. They had a great run, but then were reined in first by Teddy Roosevelt and later by Franklin Roosevelt. And for a time we were all in this together. There was a revival of the idea that there need not be pauper wages, but rather a living wage that gave people more than a subsistence living. There was a sense that patriotism was more than being gung ho during a war. It was a sense that we were building something grand. Our middle class became the envy of the world and a beacon of liberty.
But along came Milton Friedman and his shock doctrine theory which was merely feudalism repackaged as a fancy new economic theory. Miltie couldn't convince Dick Nixon to try it, but Ronnie Reagan was more than happy to screw the masses and reward the wealthy. (There was a trial run of the shock doctrine when NYC went bankrupt in 1975 and bankers like Felix Rohatyn took control of the governing of the city shutting down social services including garbage pickup, but that's another diary).
Perkins' Professor Ashton was concerned already in 1966 that Americans might dissolve into what he called "trinket capitalism" i.e the making of crap that nobody really needed instead of the essentials, food, clothing, shelter, health care, and security just for the sake of growth. But this was a growth without social purpose. If a goal of a CEO was to make a lot of money with a lot of perks like private jets and parties with large ice sculptures of Michelangelo's David pissing vodka, then who cares what you made as long as you could market it. With the deregulation of industries and the loosening of all kinds of rules and tax code changes, the 1980s became a free for all that hasn't stopped. The wonderful "we" society was gone. In came that mythical rugged individual aka greedy bastard. Out with John Q. Public and in came Joe Six Pack.
When people couldn't buy the trinkets, the bastards did away with the cap on usurious interest rates and extended credit to everybody. I remember not being able to get a credit card and then all of a sudden around 1980, it was a snap. And once they spun their web, their web of debt (to borrow from the great book by Ellen Brown "Web of Debt"), Katie bar the door.! Instead of continually raising wages with company profits, the CEOs took most of it for themselves to gamble in the Wall Street casino. Before 1980 CEOs made about 40 times what their typical hourly worker made. By 2000, they made more than 531 times the average worker. Do you really think they were that much smarter or better than the CEOs during our manufacturing hey day? No, they were just better at bamboozling. Perkins says we were "hoodwinked". And so began our enslavement to our banksters.
In the years after WWII, the very tippy top income tax rate for incomes over $400,000 was 92% which after deductions was more like 65%. That meant that it was better for the company chiefs to pump profits back into research and development and into wages than give it up in taxes. But higher wages led to workers getting more educated and uppity. They started to like equality. Well, you can't have that. So in came Miltie and Ronnie. They started the shut down of manufacturing and the start of making money by shuffling paper around. Banking that was supposed to be just a mechanism was morphed into an industry. It went from 7% of our GDP to over 30%. And we began to worship these financial high priests who created some concoction out of nothing. And we sacrificed ourselves to them. We sacrificed our futures. We allowed our tool makers and our weavers to be thrown into the volcano to appease the god of greed. We, after all, didn't work with our hands, so they did not come for us.
But now they have come for us; the teachers, the accountants, the IT workers, the lab technicians, the radiologists. And they come for the retirees. Will we join with what is left of our toolmakers in a united front against these mercenaries? It's our only chance.