How the 1% is Hurting the Country (part 2)

In my last blog post--How the 1% is Hurting the Country (part 1)--I linked to an article that explains how the country has been harmed by those whose wealth is used to influence politics in a way that is unfair to the majority of us. That article very brilliantly enumerates the ways that this oligarchy has been detrimental to the greater economy and even to the long term interests of those in the so-called 1%.

The aforementioned article offers some great insight into the macroeconomic issues facing the country. This week, I'd like to focus in on a microeconomic aspect that ties into the previous article and illustrates the stark danger of the plutocracy that our country has become.

So, imagine that there is a business in a community and the business is doing well, paying all of its employees and therefore the entire community is thriving because everyone is working and everyone has money to spend. Then let's say that someone sees this all going on and decides: I would rather have all that money for me! That person buys the company, runs up its debt to pay himself hundreds of millions of dollars then, when the business cannot repay the new debts, closes the business, fires the workers and files for bankruptcy, hanging the company's debts on the taxpayers (some of whom were just fired from the company). Seem fair?

Of course, that scenario is not hypothetical. It is how private equity firms, like Mitt Romney's Bain Capital, sometimes operate. I bring it up because I often see comments from people online, suggesting that people who voted for President Obama may now be regretting their vote, as if Romney/Ryan was a viable alternative. I also bring it up because people still blame the poor economic recovery on the housing bubble, bank bailouts, the "takers" getting too much welfare, Obamacare, the wars, etc. Although most of those things may also be to blame, the business practices of private equity firms is certainly one of the most destructive forces and it is an issue that desperately needs to be addressed. It is also an issue that is largely ignored by the mainstream media, while people are all-too-eager to talk about the other possible causes. We are not going to have a strong economy again as long as people are more inclined to chase large, short-term profits as opposed to long-term growth and stability.

Personally, I could not vote for a person like Mitt Romney. The types of business practices he was involved in at Bain should be illegal. We certainly don't need a president that champions such business practices and might perhaps help others make out the way he did: by essentially stealing wealth from the common worker.

This relates to Joseph Stiglitz' article because, through the magic of plutocracy, such unethical business practices have not only been made legal, but the profits from such travesties are taxed at a rock-bottom rate, far lower than you or I pay on our income we receive from working and producing things. You see, when you or I request things from government--like tax relief, clean air and water, transparency and accountability in government, etc.--government usually yawns. But when a very wealthy and powerful person approaches government and asks to legalize theft and then get a sweetheart tax break on those ill-gotten gains, the government tends to listen and bend over backwards (and bend us over forward) to accommodate them.

We citizens in the so-called 99% are the majority in this country. And it is supposed to be a democracy. Therefore, if the majority of us are intelligent, we could come together to demand changes to the system so that it is no longer rigged against us; we can make destructive business practices illegal and we can make profits from "carried interest" deals taxed at the full rate. If...

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/