Democratic Underground

Sacrifice? Unity? Patriotism? Who Says?
September 26, 2001
by Prodigal Son

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Last Thursday night Bush spoke of a need to support each other. To tighten our belts, for the upcoming conflict with organized terrorism. This apparently does not include CEO's , the extremely wealthy, and Wall Street. Just us little guys.

Some Republicans, the usual suspects like DeLay and Lott, are wanting to take advantage of the current tension to force through a capital gains tax cut. Shameful. As a general rule, I believe capital gains tax cuts can sometimes stimulate a sluggish economy, but should be used rarely. Definitely not now...

The street sold off sharply last week in response to the horrific tragedy of the WTC. This is not surprising, but the patriotism we were all displaying apparently was not felt by the short sellers and short-termers pulling whatever money they could off the table and converting them to cash and short-term bonds. $1.6 trillion in market value has gone up to money heaven, but "After all," they seem to say, "Supporting America is one thing, but we are talking about MONEY here."

One sign of the flight from stocks into short-term debt is the steeper Treasury yield curve, which tracks the difference in yields between short-term and long-term securities. Cash deposits are bulging in our nation's banks. The sellers are the trusts of the super-wealthy, and institutions. The ordinary Joe is the only one showing any guts.

Now these turkeys are lobbying hard for a tax break on the profits they will make in the very near future, as they took advantage of the grief our nation suffered. Imagine the message of American resilience if the market had closed UP last Monday.

To heck with the lot of them. Raise taxes on their unpatriotic profits. If we really are at war, as Bush says, then we should fine them for war profiteering. I think a 70% tax on any profits made from last week is entirely appropriate.

Now to CEO's. As I hear these guys speaking about all the layoffs they are are going to do, and all of our tax money they need to survive, one thing I don't hear from them is how they, and top management, are going to suck it up. The airline industry alone is going to get an $15 billion bailout package, and they are still going to layoff 100,000+ Americans with families to support. What gives?

The everyday CEO gave himself, through a board vote (other CEO's sit on these boards), on average a 22% raise this year. Executive pay jumped 571% between 1990 and 2000. If the minimum wage, which stood at $3.80 an hour in 1990, had grown at the same rate as CEO pay over the decade, it would now be $25.50 an hour, instead of $5.15 an hour. Think of the strength our economy could have, right now, if the little guy would have had successive purchasing power through minimum wage increases (what second Bush recession?)

It would show great solidarity if these executives joined the rest of this country, only make a half-million bucks or so (a serious sacrifice), using the extra dollars to keep people employed, until America regains its economic confidence. We are all in this together. But apparently patriotism only extends just so far...

Many blessings on those companies that gave millions to the NY and DC victims, and to rebuilding.

Patriots all.