BOOKS: How the 1% screw the rest of us T he appearance of “The Trouble With Billionaires”
2012John Orrett 2012-03Read it in the scan (PDF at ETOL), page 8 →
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and BARRY WEISLEDER could not have been more timely. Published in Can ada by Penguin Books (Toronto, soft cover edition in 2011, 272 pages), the book is to be released in the USA under the title “Billionaires’ Ball: Gluttony and Hubris in an Age of Epic Inequality” on March 27 by Beacon Press.
It’s as though co-authors Linda McQuaig, a Toronto Star political columnist who has written eight books, and Neil Brooks, professor of tax law at Osgoode Hall Law School, had anticipated the Occupy movement and its odious target—the incredible inequality of wealth and income that is a burgeoning North American scandal. The authors provide numerous shocking descriptions of the vastness of the wealth concentrated in so few hands. Here’s one example: if Bill Gates started counting his money at the rate of one dollar every second, every hour of every day, he would have to count for 1680 years to complete the task.
One chapter challenges the notion that immense wealth acquisition is the reward for the sheer brilliance and unique efforts of a precious few remarkable individuals. It draws on the works of famous liberals and conserva tives like Adam Smith, John Stuart Mill, and Thomas Hobbes to demolish the “great man” theory of history. They argue that the greatest innovations and discoveries, by the likes of Isaac Newton and Joseph Marie Jacquard (inventor of the loom), were built on a pyramid of ac cumulated human knowledge and that this knowledge is really the inheritance of us all.
The book looks at the adverse affects of gross inequali ty on human health, social relationships, and democracy. It cites studies that show that a healthier, more politically inclusive society results from a more equal distribution of income and wealth.
The authors compare the era of the Roaring Twenties, Matt Rourke / AP leading up to the great stock market crash of 1929, with the years prior to the economic crisis of 2008. The de regulation of banks and provision of huge tax breaks for corporations and the super rich preceded both global cri ses.
In 1911, U.S. President Howard Taft deregulated the banks in America, allowing them to become involved in the selling of stocks and bonds. Then in the 1920s, An drew Mellon, serving as Treasury secretary under three presidents, was able to reduce corporate and personal income taxes massively in favour of the rich and power ful. A speculative frenzy hit the stock market, with paper values rocketing far above their real worth. This resulted in the market crash of 1929 and the Great Depression of the 1930s.
Under the New Deal, Franklin D. Roosevelt’s pro gramme to save capitalism—greater regulation, higher marginal tax rates, and government spending—started to pull the U.S. economy out of depression, although World War II played a more decisive role. In 1938 Roosevelt signed the Fair Labour Standards Act. It established a national minimum wage. Workers’ pay rose and union membership grew from 12 percent to 35 percent in 10 years. The Glass Steagall Act of 1933 prohibited a bank holding company from owning other financial compa nies. (It was repealed in 1999 by the Gramm-Leach- Bli ley Act.)
The state interventionism of the Second World War was followed by an era of unprecedented growth in capitalist economies, as well as a much greater sharing of wealth production (to divert workers from the path of revolt). But as the authors point out, “The wealthy interests had never given up resisting the New Deal.” President Ron ald Reagan’s crushing of the air traffic controllers’ strike in 1980 signalled a return to blatantly one-sided laws in the interests of the rich and powerful. Through the re gimes of Reagan, the Bushes, and Bill Clinton, progres sive taxation was rolled back. Washington deregulated businesses and banks.
In Canada a similar trend was afoot. In 1987 Michael Wilson, the finance minister in the Conservative Govern ment of Brian Mulroney, began a major overhaul of the federal tax system to reduce the burden on the country’s richest families. Rules on Family Trusts, set up essential ly to avoid taxes, saved Canada’s richest families $7.9 billion between 2000 and 2010. A report from the Senate (continued on page 11, in “Duluth Occupiers reach out to foreclosed homeowners”)