A huge disconnect

A couple of weeks ago [February 1, 2008, to be exact], it was announced that the U.S. economy lost 17,000 jobs, a serious downturn for the first time in many months. Articles that appeared in many newspapers and online news sites repeated this story ad nauseum.

What was probably overlooked was that on that self-same day, the NY Stock Market exploded upwards, with a nearly 100 points gain for the day on the news of record profits by Exxon Corporation. Indeed, this news about Exxon was so important that the Evening News of NBC had an item on the program in which Jim Cramer from the Financial News Network appeared with Brian Williams to comment on that report. Long story short, when Williams asked why regular people should not be outraged at such profits when high prices for gasoline were wrecking havoc on the budgets of families, truck companies, airlines, etc, Cramer basically said that since the poor oil companies had been through rough times before, it was okay that they were finally getting some good news and good profits, and that he did not hold it against them.

Some capitalist thinking, eh?

Indeed, it is mind-blowing stuff, really. But it points out a phenomenon that I think we as citizens need to be aware. There is a huge disconnect [thus my title] between the stock markets and real people in our country. When the news is almost universal that the U.S. economy is tanking in a serious way, slipping into full recession, the astute observer must surely note that the stock market and Financial Channel pundits are glowing, and corporations are posting major gains and profits.

I have for a long time held the view that the stock market corporations, huge retirement funds and other huge investor class funds flourish on human misery. This is, in my view, so profoundly true that the average citizen can correctly conclude that when the stock market is flourishing, the average citizen is hurting and experiencing economic misery. In other words, reality in capitalist America is that when the stock market is up, average people’s lives are necessarily down, as the markets flourish on human misery. Misery of citizens is the fuel of the stock markets, and the markets are directly but inversely related to the people of the nation. That is to say that the stock market is related to our lives in a completely topsy-turvy way that when the stock market is up, we are suffering, and when the markets are down, the consumer gains and profits.

I don’t know how long it takes to make people see this, as it has been true for all of my own life [I am 65]. I suspect that it will be true forever, really, and that human misery has always been the fuel of American corporatist capitalism. For instance, during the Reagan years, my own recollection is that it was one of the most difficult eras that I can remember for our family and the average family in our country. It was in fact a time of huge transfer of public wealth [tax money, if you will] to private pockets that then had been in the world to that time. For some of us, Reagan was the worst president in our nation’s history, yet the conservatives taut him as nearly the Second Coming of Christ! In fact, the Constitution suffered some of its worst assaults during the Reagan disaster years, serving as a mere prelude to the all-out warfare against the poor of the two Bush administrations [don’t tell me you don’t remember the Savings and Loan debacle! http://la.indymedia.org/news/2004/01/99614.php ]. Reagan’s budgets and the deficit were the largest in the history of the nation, and Conservatism took on a new image as the party that reduces taxes and yet at the same time spends, spends, spends our nation into oblivion. In fact, this political tactic of the neo-Conservatives had a name; it is called “starve the beast.” http://www.wordspy.com/words/starvethebeast.asp It is still the unspoken tactic of the Republican party, and especially of the Bush administration and will likely be the policy of any Republican that takes office in 2009.

The Savings and Load government bail-out and rescue package made the Bush family mega-rich, and elevated the Bechtel Group and other multi-national corporations to the level of world powers, most all of which was due to Reagan’s all-out assault on regulatory agencies and a massive killing field against labor in the United States [don’t tell me you have forgotten Reagan’s breaking of the Air Traffic Controllers union by government fiat!] Later mine disasters would reveal that the Reagan-Bush assaults on regulation and control of dangerous corporations extend much further than the Air Traffic Controllers union.

There is something rotten about America’s version of capitalism. Whatever the American system is, it is NOT free market capitalism: it is a highly regulated system designed to severely regulate and control any input except for capital. Translated, this means that money controls the nation. When Jim Cramer comes on the TV and sheds crocodile tears for the poor corporations, we are in a world of hurt. Those same corporations are the ones that have moved trillions of dollars [that’s right, Martha: trillions] to off-shore shelters so that they do not have to pay taxes in our country. In another era, we would have held such organizations to be traitorous and summarily prosecuted for treason – and likely executed! But today, they are held out as heroes!

It was amusing – while at the same time frightening – to hear one of the presidential candidates talk about his tax plan [the so-called “fair” tax, which is not fair at all] as a plan that would bring back into our economy the $12 trillion [that’s right, Martha; $12 trillion] that had been squirreled away in off-shore tax shelters by mega-rich funds, individual, corporations, etc, so as to avoid paying taxes in our country, because, if you listen to them, the tax rate for corporations is way too high in the U.S., and those corporations are only doing the responsible thing. Duh.

The truth is that American corporations pay far less taxes than just about any nation’s corporations. The American corporate tax rate is 35%, but there is not a single corporation [at least intelligent ones] that pays that rate. Indeed, the richest corporations pay sometimes the lowest tax rates, as Warren Buffet has said, so that an absurdity arises. Warren Buffet commented that he made $46 million in a year [an off year for him, as I recall] but paid a lower rate of taxes than did his secretary in his office! http://sunspot.mercedsunstar.com/?q=node/3883

Here is a link for the reader to follow that will give the true percentages of taxes on top earning corporations in America, http://www.pbs.org/now/politics/corptax.html, Microsoft being one of the most profitable and most recognizable, a company that anyone who uses a computer can relate to: it makes hugely inferior products. It is the “China” of software products, funneling huge rivers of inferior products into a controlled and managed market designed especially for Microsoft and other mega-monopolies [What? Don’t tell me you forgot about laws against monopolies!]. The reader will immediately note from the website that for the year 1999-2000, Microsoft paid an effective tax rate of 1.8% [yes, Martha, that is right] on profits of nearly $22 billion! The reader can browse the other companies for some even more astounding facts. All of that information is put into proper relief by comparing with the average American family’s rate of around 17%. Plainly put, Microsoft Corporation paid 1.8%, you paid 17%. And Bush [and now McCain and every other Republican candidate] wants to cut corporate taxes again!

Given all this, would it not be at least logical, if not kind hearted, to wish for a stock market crash? I think so. When the stock markets are up, you are down, average citizen. Read it and weep.