Following the corporate pied piper
August 12, 2010
Prior to the 1970’s, America was primarily a cash based system. Most families had savings accounts, and adhered to a program of placing 10 percent of their earnings into their savings. Even large ticket items, such as the family car, were often purchased with cash. In 1968 Americans were enjoying a minimum wage that had more buying power than any other time in America’s history, before or since. By 1970, the concept of the credit card had emerged. The Bank Americard had been mass produced and mailed to 10 million customers.
In the 70’s another idea emerged – the concept of trickle-down economics. The theory was that if big business was given massive tax breaks, and therefore profited more, everyone in the economy would do well. During Reagan’s administration, the marginal tax rate on the highest income bracket was cut from 70 percent to 28 percent.
But instead of everyone sharing in this new-found pot of gold, wages flat-lined. For the first time in America’s history, the steady upward climb of minimum wages stalled. From 1981 to 1990 a record was set for the longest period that minimum wage rates were frozen. But that record was soon broken, because minimum wages were again frozen from 1997 to 2007 – ten years – while basic living costs were skyrocketing over 100 percent. Not only did it turn out the big guys of the corporate world kept record profits for themselves by keeping wages low, they envisioned the goose that would lay the golden egg.
Loaning money and collecting interest from the masses was making a lot more sense to big business than raising wages. It’s no coincidence that during this time the idea of the big box store was also conceived and growing. WalMart was busy in the 80’s building stores all across America.
The credit card industry was poised and ready to jump in to fill the need. People were trained to love the convenience of the credit card, so the practice of building a savings went by the wayside and the temptation to buy was promoted relentlessly, non-stop. At the same time, maximum spending limits which started low, were pushed higher and higher.
Now we know the result of that movement – money that just 40 years ago went into a savings account, now goes for interest payments to the credit card industry. And as big retail business had hoped, Americans stopped supporting their local small businesses in favor of huge discount retailers, forcing the closure of thousands of friendly hometown, knowledgeable businesses and the steady stream of the local jobs they offered.
When the promise of the trickle-down theory didn’t pan out, the reverse fear-based logic became the talk of the day – don’t mess with big business because they supply our jobs. Most importantly, don’t tax the billions big businesses are profiting, or they will leave the state or country. Even as Californian’s consider an extraction tax on the oil companies, that “don’t tax or they will leave” or “don’t tax, they will pass it on to you” phrase is hammered over and over. The oil companies are willing to contribute millions to keep their candidates issuing scary blanket statements that will continue to protect their massive profits.
Bringing their ballooning profits under control never seems to be an option. Regarding the supply of jobs, WalMart is indeed America’s single largest employer. Their standard pay for a cashier is $8.38/hour or about $1,250/month take-home IF they allow their employee to work full-time. In most states WalMart’s pay scale is in the poverty bracket, making employees eligible for state assistance.
Worse yet, the WalMart/ Target/ Home Depot concept shifted the thousands of jobs manufacturing had been providing out of the U.S. and into Asia and Latin America. Combine that with the thousands of small businesses that closed their doors or are currently fighting for survival, the truth is, WalMart has been a job destroyer, yet they routinely succeed at sending their lobbyists into a community to negotiate a waiver on their permits to build. There’s more good news for WalMart – WalMart has created in their family five of the ten wealthiest people in the U.S.
Americans are waking up and realizing they have been taken to the cleaners. Now what is the new mantra coming from the pied piper who had us swallow the trickle-down theory, which ended up the stuck-at-the-top theory? Now it’s down with the government – touting Grover Norquist’s remark make it so small you could drown it in the bathtub. Privatize everything – even weaken our military so it depends on private for-profit companies to do for them what they used to do for themselves.
Allow our schools to deteriorate so for-profit schools become the answer. Allow our infrastructure to continue to deteriorate. Pretend there is no need to invest in clean, efficient energy; ignore the fact we are falling behind other countries. Allow a company the size of Exxon to avoid paying even minimal taxes. Don’t care about the little guy in trouble. Scream about the deficit if a bill helps the people; raise the deficit without a worry if it keeps us at war and pours billions into the corporations who benefit directly from war and from setting up shop in the countries we conquer.
If the NRA and the multinational corporations get their way, we will have a shell of a government under private control. Think about that – it’s not a hidden fact. The pied piper just gets the angry people to take their eye off of big business and focus on government. Who wants government – an easy sell, right? What the pied piper doesn’t want his followers to think about is the “under private control” part. You are not likely to hear the pied piper say “You can trust big business for everything; health, education, retirement, infrastructure, safety of our water, air and food – just look at their history of concern for you over the last 40 years.” If he said that you might laugh.
The corporate pied piper has the details of the planned takeover well in hand. Getting the Supreme Court on their side was huge. They figure politicians with the most corporate financial backing in the form of slick and twisted corporate ads will continue to be elected. They will block any attempt to implement disclosure of funding and fair election reform.
Unions of course, are the enemy of the corporate world because they represent the people – they must become a dirty word that all the blame gets shifted to. Our government will become increasingly authoritarian and dangerous, because what’s left of it will exist solely to protect corporate power; squashing freedom, not supporting it, while at the same time shifting the focus of anger to the little guy. This unfortunately tends to go hand-in-hand with a belief in white supremacy and a well-armed society, a group the pied piper loves to have follow him because they will support a more aggressive and privatized armed militia like Blackwater. The pied piper even has the nerve to state that this is the path our founding fathers wanted us to follow. Well, not according to Thomas Jefferson:
“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.”
A powerful fact, however, is that big business does have an Achilles heel – they are dependent on your obedience. Our too big to fail banking system depends on you using your credit and debit cards because of the fees, the interest, the ease of tracking your spending, and the increase of odds that you will overdraw or go over your limit, creating a multi-billion dollar industry for the banks. Big box stores depend on the public mindlessly flocking into their stores to empty their wallets. But the public actually does have the ultimate power; they decide who receives their hard earned dollars – a fact that sends a chill down the back of the multinationals and their bought and paid for politicians.
So what are people doing who refuse to follow the pied piper? There are grassroots efforts to buy local any time you can. Farmer’s markets that encourage selling local products have grown in popularity. Getting your credit cards paid off and avoiding interest. Going back to cash whenever you can – you can’t spend more than you have. Turning off the TV and planting a garden. Living simply with less non-essential “stuff” that clutters your life is a new mantra for some, along with a willingness to elect officials who support your values. With a shift in thinking, perhaps we could discover a more sane and less stressful lifestyle for ourselves and our families, and gradually get our government out of the hands of big business and back under the control of the people.
As Jerry Brown has argued, “Multinational corporations do control. They control the politicians. They control the media. They control the pattern of consumption, entertainment, thinking. They’re destroying the planet and laying the foundation for violent outbursts and racial division.”
Marilyn Armstrong is founder of SLO Grassroots Democracy, an independent non-profit action group.