It's Not Class Warfare

Steal a little and they throw you in jail
Steal a lot and they make you king – Bob Dylan – Infidels 1983

Well, at least I know that people read my columns. Last week I wrote about how the money culture allows a disproportionate minority of wealthy individuals and large corporations access to power and influence over policy. I’m not alone in my rage over it and my allies cross all ideological divides. John McCain, whose name is attached to the McCain-Feingold Campaign Finance Reform bill and Newt Gingrich who took it on the chin in Iowa from Mitt Romney’s Super PAC are but two.

Yet the overall response I got from readers was that I seem to be some kind of class warrior, I beg to differ. It is not the wealthy I am concerned with, it is a whole other group that I call the “Moneyed Elite.” More on them in a moment let me first address my supposed class warfare. I’m for lower taxes across the board and the main reason for that is because almost half the households in United States don’t pay any taxes at all. This places an unfair burden on those that do pay taxes. I am in favor of trimming the federal budget but it must be done across the board, defense, entitlements and every other sector. I find the “Death Tax” a scam where the government gets paid twice for money earned and taxed already. Yet I find that those that earn most of their living off of dividends, earned interest and capital gains pay too little in taxes. The loophole that allows private equity executives like Mitt Romney to be taxed at capital gains rates borders on criminal and when he eventually releases his tax returns it will be a major campaign issue. Corporations have become experts in tax avoidance and corporate CEO’s compensation is tied to often artificially inflated stock prices.

The small to mid-size business owners who employ most of the workers in this country are squeezed. Salaried professionals are penalized for being paid on the books via payroll while corporate bigwigs are not taxed on perks like travel and housing. The only people who get a pension anymore seem to be elected officials and municipal union workers. That’s not class warfare, that’s insanity. We have a broken system and we need to fix it. Does that mean I foment class warfare?

The Moneyed Elite are a relatively new breed. They have been created by 40 years of deregulation, loopholes and a system that places the shareholder above all. By making the shareholder reign supreme corporations shift away from any social compact that created them in the first place. The obligations of a corporation to its employees have given way to the bottom line of shareholders. The problem is that the typical shareholder does not really benefit from this emphasis. The benefit goes to the portfolio managers and investment bankers who invest your money, hedge fund managers and yes the super rich investors who buy stock in bulk. Just look at your 401K, IRA or stock portfolio over the past few years and you will know exactly what I’m saying is true. In the meantime, those bankers and hedge fund managers got paid outsized bonuses and increased the divide in income between them and everyone else exponentially. All the while, they use their windfall gains to finance political campaigns and influence policy. That is not class warfare, that’s insanity.

Pick up a newspaper or turn on the news on any given day and you will read stories of petty thieves and minor tax cheats paraded by prosecutors to show that they are fighting the criminals. However, not one, I repeat, not one, Wall Street executive who created bogus securities from junk mortgages that they paid the rating agencies to classify as AAA has even been indicted. The chairman of Goldman Sachs was quoted in Der Speigel as saying that crisis was the fault of greedy homebuyers who took out mortgages they couldn’t afford. In actuality the homebuyers were the proverbial kids in the candy store who had free money thrown at them by – Goldman Sachs (and others) and sold to your 401K and IRA as a safe investment. At the same time they pushed that crap on your portfolio, they bet against those investments with their own money. Their reward? Corporate bailouts and barely a crimp to their annual bonuses. That is not class warfare, that’s insanity.

We need to fix a broken system and we need to do it soon. The problem we face is that come November we will have a choice between more of the same or more the same from before that. I have no interest in class warfare and I hope the well off amongst us get to keep their money. I just want to live in a democracy where the majority still rules, not where less than 1% of us in reality does.