Citicorp executives are using $45 million corporate jets for luxury family vacations in Baja at $12,000-a-night hotel rooms, all courtesy of bailout money from you and me.
Banks across America are laying off Americans by the tens of thousands and replacing them with workers in India, The Philippines, and imported foreign highly-trained white collar workers who'll do work for less than half the prevailing wage for Americans.
Meanwhile, most of the banks getting our bailouts have overseas tax shelters to hide their profits; the practice is so pervasive that worldwide corporate tax rates have dropped from 38 percent in 1993 to 26 percent last year, and a significant number of Fortune 500 companies in America pay no corporate income taxes whatsoever. (While we have the second highest corporate income tax rate in the industrialized world at 35 percent, we also have the second lowest percentage of taxes actually paid because of tens of thousands of loopholes drilled into federal tax laws by lobbyists, and these offshore tax havens.)
But our problem isn't "greedy" bankers and corporate executives. The problem we have is structural.
Thirty years ago, America was still held together by policies, laws, and systems put into place during the last Republican Great Depression to prevent a repeat. But since Reagan's election, in the name of "free trade," "the free market," and "freedom" - euphemisms for destroying the New Deal - those structures have been systematically dismantled by four successive administrations and their attendant congresses.
We've lost the wall of separation between banking and gambling (investment). We've lost the ability to tax American corporations on their profits (globalism). And we've lost the ability to protect our domestic industries (particularly our small businesses) and American workers from the predation and unfair competition of companies and countries that use fifty-cent-an-hour labor as a weapon against us ("free trade").
It's easy to take potshots at Citigroup's Sandy Weill for ripping us (and Citigroup) off. But he's just a symptom of a larger problem that has gone by a variety of names over the past thirty years. Reagonomics. Thatchernomics. Clintonomics. Free Trade. Globalization. The World Is Flat. Economic Freedom.
All are just fancy ways of saying that we should play the game of business without any rules other than those defined by the businessmen.
Imagine if this same logic was applied to football:
Goalposts? Yard Lines? Those limit the freedom of players!
Fouls? You're trying to stifle creativity!
Referees? You must be some kind of protectionist, a gestapo who wants to over-regulate everything!
The fact is that we give businesses a lot of special privileges, tax advantages, and liability protections when we set up the game of business. We do so because we want entrepreneurs to play the game of business in a way that makes them money but also - and, actually, first and foremost - serves the public good. Which means having a reasonable playing field, transparent rules that everybody plays by, and referees who catch malefactors and actually throw them out of the game or penalize them.
Thirty years of repeating the 1921-1933 Warren Harding/Calvin Coolidge/Herbert Hoover Republican mistake of "deregulating" business has led to the exact same result it would if we "deregulated" football - chaos.
We must immediately reinstitute our structures. Enforce the Sherman Act (no more "too big to fail" companies, from autos to banks to media). Reenact Glass-Stegall (no more gambling by banks). Pull out of the WTO and go back to the National Industrial and Trade Policy put into place by Alexander Hamilton in 1792 that worked just fine for this country until Reagan, Bush, Clinton, and Bush tore it apart piece by pice.
If we rebuild our field, repaint the lines, reinstall the goalposts, and give whistles and enforcement power back to the referees, we may again have a nation where the business of business is a net positive to We The People. Until that day, Sandy Weill and his cronies are laughing all to the bank...in Liechtenstein.
