Letter: Share the wealth
Quote from Supreme Court Justice Louis Brandies: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few. But we can’t have both.”
The Glass-Steagall Act of 1933 was to prevent commercial banks from gambling with depositors’ money.
Let’s get back to some kind of fairness. The middle class must get back to sharing the wealth of this country.
In 1978, Congress passed a tax bill that gave the wealthy more than $1 trillion in tax cuts for the past three decades. Then the George W. Bush tax cuts added another $1 trillion.
In the 1940s through the ’60s, American productivity rose 96.8 percent, and workers’ wages rose 95 percent. What this meant was that the American working class was sharing in the nation’s gains, and corporate profits were going up.
From 1973 to 2011, productivity of the American work force rose 80 percent. The average compensation rose just 10 percent. The U.S. Census Bureau in 2012 reported that the average wage of a male worker was the same in 2011 as in 1973, adjusted for inflation. In that same period, the pay of a CEO went from 40 times of an average worker to 360 times. The incomes of the top 1 percent of America multiplied sixfold, while the middle class showed no increase. That’s redistribution.
Henry Ford said, “Pay your workers well, and they can afford to buy the Model T.” That is what happened in the boom times after World War II. Workers got paid well, and they went out and spent the money, which created huge consumer demand, which meant businesses had to expand and hire more people.
The job “creators” are middle-class Americans. Today, businesses are sitting on roughly $2 trillion of capital. The problem isn’t a shortage of capital — it is a shortage of consumer demand. Low pay equals low demand equals low growth and longer job recovery.
Why in Germany has worker pay increased five times what it has in America, and why does Germany have a trade surplus of $2 trillion while America has a trade deficit of $6 trillion? Germany has 21 percent of its work force in manufacturing, and we have 9 percent. The answer is the way the income gets divided up.
Think about this: If there is a demand for goods in America and abroad, is that going to create jobs? How can we create more demand? Doesn’t it make much more sense that if we increase workers’ pay, we will create more demand? Aren’t millions of middle-class Americans out buying goods much better than 1 percent of the population buying large second homes and gambling your money in the stock market?
I think the things we can start with is never to let any person serve more than two terms in public office, to lower their pay and to reinstall the Glass-Steagall Act. Then demand that your elected representatives pass laws that get the middle class its fair share of this nation’s wealth.