For another writing project I am reading about the Gilded Age, that period after the Civil War when corporations first established themselves as the principle engines of economic growth and the United States became the most powerful industrial nation in the world.
Reading about this period, between 1865 and 1896, is like reading about Enron, politics and corporate America. “Everywhere there was close alliance between corrupt financiers and corrupt public officials, the historian James Truslow Adams wrote about the Gilded Age.
In his 217-page report on Enron’s internal management, William C. Powers, Dean of the University of Texas law school, condemned the senior management of the bankrupt company as well as its lawyers and accountants for “self-enrichment” at the expense of its shareholders, and for “over-reaching in a culture that appears to have encouraged pushing the limits.”
Is Enron an exceptional case of corporate greed? Or is it a more generalized example of how corporate managers manipulate the legal system to enrich themselves at the expense of their shareholders and workers even as they run their company into the ground?
The problem is bigger than Enron, but don’t expect Congressional investigators to explore the corrupt relationship between politicians and the corporate world. The members of Congress going after Enron now are the very same people who happily took its money and also its advice. There’s nothing illegal about that; for Congress has also passed legislation making bribery legal and influence- peddling the-way-work-gets-done.
What’s happening in Washington tells us a lot about political friendship and the power of money. Ken Lay, Enron’s fallen chief, was George W. Bush’s great pal “Kenny boy” when Ken was giving him money. But now Bush doesn’t want to admit that he even knew him. This is the pattern across the board. Corporate managers ply politicians with money, wine, dine, and play golf with them, and give them use of their corporate jets. But its friendship based on the favors they get in return. Shallow friendships reflect shallow values, shallow politics, shallow people, shallow thinking.
We live in a new Gilded Age with bought politicians and greedy corporate managers. We no longer have a government by and for the people; hell, we don’t even have honest debate. Bush’s $378 billion military budget, for example, needs to be scrutinized. Most of it is going to stop the Russians from invading Europe, a threat that no longer exists. But don’t expect the merits of the military budget to be discussed at all. The defense industry gives politicians millions of dollars to prevent such a debate. Ultimately it will be money rather than merit that carries the day.
The same is true regarding health care and every other social program. National health insurance was first proposed by Teddy Roosevelt. FDR, Truman, LBJ and many members of Congress have taken up its cause. It’s not simply a matter than Congress has ever voted it down; it’s never been fairly discussed. When Hillary Clinton met in secret with lobbyists from the insurance industry to draft her “health reform” bill, her husband, the President, told an advocate of universal health insurance (i.e., a single-payer system), “you win the debate, but I’m going with these guys,” meaning the insurance company lobbyists and other opponents of universal coverage, who between 1979 and 1992, plied members of Congress with more than $79 million. And they are still giving!
But it’s in the area of tax legislation that the system is really corrupt. Daniel Mitchell, a senior fellow at the right-wing Heritage Foundation, argues for a lower tax rate because high rates give wealthy taxpayers “the incentive to hide, shelter and underreport income.” In other words, if the rich aren’t given legal tax breaks they’ll cheat on their tax returns. And they’ll get away with it too! For campaign contributions also buy protection. A 1999 study shows that there is a greater chance of being audited if your income is under $25,000.
Top executives are now making two and three million dollars a year over and above stock options, company jets, tickers to the Super Bowl, golden parachutes, and other perks. Athletes and entertainers make even more. If they were to give up just one million dollars a year in earnings, one thousand working people would be able to earn one thousand dollars more. If free market economics dictate high salaries, as those who get them insist, then some of their earnings ought to be returned to the public in the form of taxation. And now here is the Bush Administration wanting to cut the taxes of these millionaires even more.
Tax-cuts for the rich are just another form of political payback for campaign contributions. In 1998, 234 major corporations, including Enron, not only paid no federal taxes but got a tax rebate of $1.3 billion.
Abraham Lincoln predicted the Gilded Age and would not be surprised to see how money continues to corrupt our political system. Noting that the North had become an industrial power during the Civil War, he said, "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
Honest Abe called it right. The corporate elite has been enriching itself at the expense of the rest of us for a good portion of the past 135 years. Isn't it time we did something about it?
Marty Jezer writes from Brattleboro, Vermont and welcomes comments at firstname.lastname@example.org.
Copyright © 2002 by Marty Jezer