American Business

Remember these sayings: "The business of America is business"and "What's good for General Motors is good for America"? There was a time when America and Americans prospered when business prospered. That time is long gone. America prospered when business prospered because American businesses produced goods and services that Americans wanted and needed at a fair price, paying good and decent wages. General Motors existed to make cars, and paid great salaries, which allowed its workers to join the middle class. General Electric (GE) manufactured electrical equipment. Banks and Savings and Loans offered bank accounts and mortgages so that Americans could save and buy homes. As these companies prospered so too the towns and cities they were located prospered as the people that worked for them prospered. But sometime between the '70s and the '90s, the business of American Business became the pursuit of profit, rather than to produce goods and services. GE became a finance corp, rather than a manufacturer. GM made cars, rather than a maker of car loans. Banks, well, there used to be Glass-Steagall. Look back to the period 1890 - 1930. This was the gilded era, the age of trusts, the time when businesses were operated to maximize profits and a tiny elite received the vast majority of the wealth at the expense of the many. The economy cycled through boom and bust. Then came the Progressive movement. Theodore Roosevelt broke some trusts. The excesses of the 20's and the Great Depression led to the New Deal, which may or may not have ended the Great Depression. Ultimately, only the spending on World War II and the investments of the American People (remember War Bonds) stimulated the recovery from that economic slump. After World War II, American Government, Businesses and the American People worked together in a sort of partnership where everyone prospered. The middle class grew. More people owned houses. American Businesses prospered. There was something for everyone. But the '40s, '50s, and '60s were boring for some. A few felt that businesses didn't have enough power, didn't make enough profit. Richard Nixon, that liberal president, was making laws and regulations that some business men didn't like. Lewis Powell, the future Supreme Court Justice, wrote a memo saying that such regulations were destroying the free market system. This was the start of the revolt of the businesses that became a landslide towards the deregulation movement that led to the Great Recession, the fracture of the partnership between the American Middle Class, Government and Business, and the turn towards Ultimate Profit as the ultimate objective. The current imbalance, the inequality of wealth, the top 0.1% taking 90% of the wealth, can only last so long. It is basically incompatible with the concepts of American Freedom. Either the 99% will seek some form of revolution, or the elites will permanently destroy American Freedoms to ensure that they continue to extract the wealth they expect. The implicit bargain of the American Dream has always been that the rich elites can be rich so long as the average man has a chance, some potential, of joining them. Once the 99% wake up and realize that they no longer have upward mobility, that they have no chance of making it, they will revolt. Last weekend I watched "Siege on Wall Street". For those who haven't seen it, here's a plot summary. An ex-Army security guard is struggling to pay for his wife's cancer treatments. He invests his savings on Wall Street, where his broker invests in real estate. The Great Recession hits, and his investments go under water just when he needs to liquidate to pay for his wife's treatments. He is called to put up $60k, which he doesn't have, because he has maxed his credit cards paying the pharmacy co-pays. He hires an attorney to file an injunction against the brokerage firm, but the attorney doesn't file in time. The bank starts foreclosure. When his wife finds out the situation, she feels so guilty that she commits suicide. Devastated, out hero hauls out his old M-16 and takes on Wall Street. "Siege on Wall Street" taps into the frustration from the Great Recession and the resulting bail-outs that caused the American taxpayers to pay for the excesses of Wall Street, and which did little for all the victims on Main Street. It's the common man's wet dream of revenge for the pain which didn't seem to be shared by the players that caused the problem. In the movie, our hero's broker expresses his shared pain: The broker's wife is outraged that they can't vacation in Bermuda that year. The broker shows little remorse that our hero has lost his wife. Ultimately, our hero gains satisfaction with his assault weapon. Setting aside Hollywood fantasy, the real danger to America is the loss of democracy. All that excess wealth winds up bending Washington towards perpetuating the status quo. What is conservatism but preservation of the status quo? The Occupy Wall Street movement may have been put down, but how long will it stay down? And how much spending on security will be necessary when the 99% decide they have no chance?