Methods of Wealth Transfer
by Zoltan Abraham
November 28, 2004
Back in the 1950's most of the wealth of our nation was held by
the middle-class, who made up the majority of the population.
Sounds reasonable, right? Well, not if you're a corporation. Not
if you're a super-rich guy who wants even more. So how can all
that wealth be transferred from the middle-class to the dirt
rich? Let me count the ways!
Taxes: When a politician says, "I will cut your taxes,"
what do you say? "Hurray! Hurray! Thank you! Thank
you!" Most likely. But then the Bush tax cut, for example,
primarily benefits those who make $200,000 a year, or more, much
more, which is a very small segment of our society. They are
paying much less in taxes proportionally than the middle-class
and the poor. But, hey, that doesn't matter, as long as I can
save a few thousand or hundred dollars a year. Right? Well, no.
The reduction in taxes also means a reduc tion in social
services, such as education, road repair, health care coverage,
police protection. You will either have to go with less, or you
will have to pay out of pocket - which, I can guarantee you, will
cost much more than the few thousand or hundred dollars you
saved.
But won't the rich also be going without these social services?
Well, yes, but they have more money to pay out of pocket. They
have no problem paying for the best healthcare, the best
education for their children. They can afford to live in gated
communities, and hire their own guards to protect their homes.
Don't worry. They won't be lacking anything. Plus, to the extent
that they do enjoy public social services, you can rest assured
that they didn't have to pay for them. The middle-class and the
poor did. But then, perhaps the easiest way for the rich to
increase their wealth is simply not to pay taxes, thanks to tax
cuts and a variety of loopholes. The middle-class and the poor
will pick up the tab, co me April 15.
No income tax: The federal government, of course, has an income
tax, but some states do not. Cool! Fewer taxes. But, no. When a
state doesn't have an income tax, it finds other ways to collect,
especially through the sales tax. But the sales tax isn't so bad,
is it? The trouble is that the wealthy spend much less of their
income proportionally than those who are barely getting by from
paycheck to paycheck. So the middle-class and the poor once again
pay more in taxes, proportionally, than the rich. Not bad if you
a millionaire. But kind of depressing if you're having a hard
time buying clothes for your kids and paying for their
medications.
Corporate tax brakes: In the last 15 years, 65% of American
corporations have paid zero taxes. 95% have paid 5% or less, well
below the mandatory 35%. Corporations, therefore, barely pay
taxes, if at all. No taxes means greater profits - which means
more money for the wealthy CEOs, who then in turn pay litt le to
no taxes themselves.
But, you might say, is this not illegal? I mean, won't the feds
come after you for tax evasion? Oh, but Republicans like to keep
government small and weak. Just make sure that the agency
prosecuting tax evasion is under-funded and under-staffed. That
way they'll never catch up with you. You can commit corporate
crimes right outside their windows, and they will not have the
resources or the personnel to go after you. That's what I can
public service!
No more estate tax: The estate tax, renamed by the Republicans as
the "death tax," had the goal of returning to the
public at least a portion of the immense fortunes accumulated by
the extraordinarily wealthy. The estate tax was not threatening
the inheritance of farm owners or small business owners. Instead,
it helped to counteract, at least to some extent, the
aristocratic stratification of wealth in American society. The
elimination of the estate tax, one of the most cherished
victories o f the Republican Party, has helped to make sure that
the rich can keep their wealth untouched for many generations to
come.
Military spending: Of all global military expenditures, the
United States spends 40%. Why does such a small percentage of the
world's population need so many weapons? The US already has the
capability of wiping all human life off the face of the earth
several times over. So why spend so much? Because the
corporations associated with the military make an incredible
amount of money off of military spending.
War: War has several advantages. A lot of weaponry and ammunition
get used up, so the government has to buy more - from the
corporations profiting the most from the military. Also,
deployment of troops and combat require a long list of supplies,
which the corporations are all too happy to provide, for a
handsome profit. One way to make a killing is through no-bid
contracts, which are given to the friends, that is to say, the
great est campaign contributors, of the war-time administration.
Requesting bids for a contract is like shopping around; you want
to make sure that you get the best for your money. But a no-bid
contract simply accepts whatever terms the company in question
names, even if the price is outrageous. The company can
overcharge for anything, like $60 for a roll of duct-tape. No
problem. No questions asked.
Another way to cash in is through subcontracting. Remember that
clip in Fahrenheit 9/11? If the government pays you $1,000,000
for a certain task, and you subcontract it to a smaller company,
paying them only $60,000 for that same task, you make a pretty
nice profit. Is this illegal? Is this war-time profiteering? No.
It's just good business.
Oh, yes. Since it's usually the poor who do the serious combat,
war can also kill off a lot of the good-for-nothing riffraff in
your society. Thus, you reduce overpopulation, and you bring down
the number of people relying on social ser vices. You save.
Slash veterans' benefits: If the rank-and-file soldiers do not
die, they can become a serious monetary burden, especially if
they are wounded. So slash their benefits. Close veterans'
hospitals. Refuse treatment when possible. That way, more of the
war budget can go toward making the war-friendly corporations
rich.
The Federal Debt: Why is it good for the federal government to
borrow money? Because then we have a federal debt. The federal
debt comes with huge interest payments. We're talking hundreds of
billions of dollars. Where do the interest payments come from?
From the taxpayers. Who do the interest payments go to? To the
debt holders. Who are the debt holders? That's a good question.
Much of the US debt is owned by foreigners. But is it possible
that somehow, in some way, the interest payments on the debt find
their way to the coffers of some of the super-rich in our
country? Is it possible that the national debt is really a clever
ly disguised form of wealth transfer from the middle class to the
extraordinarily wealthy of our nation? Just a thought.
But there is another good reason for the federal debt. You see,
our spending has gotten completely out of control. We cannot
maintain all this money being thrown about indefinitely. Sooner
or later we must reign things in - and start setting aside some
cash to pay off the debt. Which means that we'll have to work on
austerity programs. Which means that we have to cut out all the
wasteful stuff from our budget. Especially those pesky social
programs. We can't afford them anymore! Healthcare, schools,
domestic violence prevention - we can't fund that sort of stuff
anymore. Of course, such austerity programs cannot impinge on the
military budget, because we are still under threat by (name your
favorite global evil-doer). Never mind that, as mentioned before,
our military spending is already 40% of all military spending in
the world, combined. That's barel y enough!
Technology at public expense: The US has a long history of
spending public money to develop new technologies, and then
handing each technological achievement over to private
corporations, allowing them to reap all of the profits. The
railroads, the air travel infrastructure, computers, and the
Internet are just some of the examples. The public pays, while
corporations get the trademarks, the copyrights, the patents -
and the big bucks. Not bad!
Bail-outs: When corporations fail or falter through mismanagement
or extravagant CEO remuneration, not to worry. The government
will often step in to bail them out, using taxpayers' money to
help the companies in question get back on their feet. Cool! This
way CEO's can go through all sorts of money, knowing that
everyday taxpayers' will pick up the slack later. Who said that
welfare societies were bad?
Public buildings for private profit: Does the following scenario
sound familiar? A community raises taxes, often in the face of
serious objections, to build a sports field. When construction is
complete, the field is handed over to a company or a particularly
wealthy individual. The profits then go not to the community, but
to the new owner. Thanks, guys! That was so generous. Please keep
working hard, to keep corporate welfare chugging along just fine.
College loans: Three or four decades ago, a high school diploma
was often enough to secure a fairly well-paying job, one which
could help you raise a family. You probably know quite a few
older men and women who have done pretty well financially over
time, but never went to college. However, in today's world, a
college diploma is essential for even a moderately well-paying
job. Furthermore, in many fields, a simple BA is not sufficient;
you need the MA, or even the PhD.
But this stuff is expensive. Sure, there are those who get
fabulous, full-ride scholarships, but their number is small .
Most people have to pay out of pocket. So, if you're not rich,
you have to borrow. How much? From $10,000 to about $60,000, or
even more, depending on your field, the school, and how far you
want to go. Add to that compound interest, and you are looking at
paying about twice the amount that you originally borrowed.
But not to worry. A good education guarantees that you'll have a
high paying job, right? Possibly, if you can get a job in the
first place. But a college loan will also guarantee that you'll
be paying a good chunk of your paycheck to your lender every
month. Not bad for the lender. Of course, the lenders' kids will
never have to worry about this sort of stuff. Their families are
pretty well off, thanks to you.
Subsidized loans: Subsidized loans are cool. After the repayment
starts, you can return to school, put the load on hold (if you're
enrolled at least half-time), and no interest is collected.
That's wonderful! But does that mean that the comp any lending
you the money doesn't get any interest payments? No, that would
be unfair. What it means is that federal government picks up the
tab, using taxpayers' money. So, don't worry, the lender still
gets rich. Thank God!
Insurance: Insurance companies love to collect your premiums, but
they don't like to pay out money. No, that would be bad for
business. So, after you have dutifully paid your premiums for
years, if you actually have to ask the company for some coverage,
they might just raise your fee. After all, they have to recover
the cost of what they paid out to you, so that your previous
premiums can just be pure profit. And, if you're too much
trouble, if you are too needy, repeatedly applying for coverage,
they might just drop you. They like the customers who pay, pay,
and pay, but don't actually pester them for money.
More roads, more cars: European cities tend to have excellent
public transportation systems, allowing people to move to an d
fro without much hassle, at low cost, often without even needing
to own a car. But that's socialism. Here in the States, we are
more advanced. Only those weird New Yorkers have the public
transportation thing. The rest of the country just builds more
roads, which is great business for the companies that make them.
Then, to travel on the roads, we buy more cars, which is great
for the companies that make them. To fuel our cars, we buy gas,
gas, gas! That's wonderful for the tremendously rich oil
companies. What is more, car dealers tend to push the big,
gas-guzzling vehicles, not the puny little energy efficient ones,
which just reek of European socialistic notions. Cool! More oil
profits.
All these companies might be found lobbying against the creation
of an efficient public transportation system. You see, that
public transportation business would just crash the great party
they're having. So, instead, let's continue with things as they
are. Your tax dollars pay for more roads. Your paycheck pays for
the car you need - and the gas you also need. And what else do
you need to drive your car? Insurance! Which brings us back to
premiums.
Low pay: Paying employees can really cut into your profit. Plus
there are the socialist ideas, such as sick leave, vacation,
mandatory holidays, overtime, comp time. Yikes! Does the
government not think about your bottom line? I mean, you as an
employer have a living to make. In Europe, that den of socialism,
the CEO of a company does not make more than about 25 times what
his lowest ranking employee makes. But here, in the land of
opportunity, a CEO can make over 400 times what the little guy
makes.
How? You know. For starters, you've gotta cut out ludicrous stuff
like vacations, sick time, family leave, and the like. Take away
medical benefits. Keep the pay as close to the minimum wage as
possible. Lobby like hell against raising the minimum wage.
Ensure high turn-over in your workforce, so that employees do not
advance to higher pay brackets and do not stick around long
enough to unionize. Wage war on unions. Union members are the
socialist evil-doers who forced companies to give in to all this
bleeding heart stuff in the first place. Fire anyone who tries to
organize a union. Yes, that's illegal, but don't worry. First of
all, you can always come up with an excuse, like she was five
minutes late, or dropped something and broke it. But what is even
sweeter is that even if you give no excuse, the feds won't come
after you. The agency investigating wrongful union-related
firings is so under-funded and slow to work that you have very
little to worry about.
Also, lobby against the 40-hour work week. The President says
it's bad, so it must be bad. Pretty soon, Republicans will have
it so employers will no longer have to pay overtime if they force
people to work more than 40-hours per week. Way cool!
Plus, pay women less than men. Almost everywhere in our c ountry,
women routinely make about 75% or less, often much less, of what
equally qualified and experienced men make. Let's keep things
that way. Less pay, more money in the bank.
So, aim high. Keep the profits in focus. To hell with the
schmucks who work for you.
Outsourcing: The problem with the US is that the minimum wage is
far too high. Plus, even after you've cut out all the
namby-pamby, socialist, pro-worker stuff you can, there are still
far too many labor-related rules and regulations to contend with
- like safety standards, and that sort of bleeding-heart,
anti-business nonsense. Of course, it's every capitalist's sacred
duty to lobby against such prohibitive restrictions. But in the
meantime, you still have a business to run and a profit to make.
What's the answer? Outsourcing. There are lots of countries in
the world that have not been infected with European socialism.
Imagine a place where you can set up a factory without
environmental regulat ions, without worker safety standards,
without medical benefits, days off, vacation time, overtime pay,
and all that. Imagine if you could pay your workers just 23 cents
an hour, an extremely low wage even by standards of the poorest
countries. Surely, this is paradise. You have died and gone to
heaven.
But where do you find such a land flowing with milk and honey?
Lots of places in the third world, especially Latin America and
Asia. In fact, many third-world governments will vie with each
other to offer you the best business environment - that is to
say, if you grease the pockets of the corrupt leaders a little. A
comparatively small payoff at the top, and you've got a country
at your disposal. Third-world workers, here we come! Let's hope
you don't get sick, or tired, or want to celebrate family
occasions, or wish to get away into the mountains for a few days
now and then. You'll be much too busy for all that. Give me
sixteen hours of your day, every day of the week, eve ry week of
the year, and I'll be spending my time jetting around in the
Bahamas, enjoying the fruits of your hard work.
But, you might ask, why would anyone choose to work under such
conditions, when they get far less pay than they need to live on?
Easy. Let's just make sure that there is plenty of unemployment
in the country. Not hard to do. Just pull the right economic
levers, and, bingo, you've got a workforce eager for any work.
Come on in. My factory is waiting.
Slave labor: How did the American South of the 19th century come
by its fabled wealth? Easy - slavery. The trouble with most
workers is that you have to pay them. 23 cents an hour can add up
after a while. So, don't pay them. Of course, some would say that
workers paid no more than a few cents an hour are already slave
laborers, but that's just the socialist bleeding-hearts talking.
How can you have slave laborers? One of the easiest ways is to
force parents to bring their children with them to work. Don't
pay the child, and threaten to fire the parents if the child
stays home. So you get sixteen hours of unpaid work out of the
kid. The parents win because they don't have to worry about
childcare while at the factory. Plus, everyone wins because you
don't have to spend money on schools.
Another way to have slave laborers is to employ illegal aliens in
the US. When it comes time to pay them, just call the feds on
them, and they'll be deported. They have no legal voice, so you
don't have to worry about any ramifications.
The stock market: Throughout the 90's the stock market went sky
high. The profits were amazing. All Americans were encouraged to
invest, not just their extra pennies, but their life savings and
their retirement funds. But the party had to come to an end. As
the new millennium began, the wealthy CEOs of companies quietly
started dumping their stocks. Then, when the big players had
safely pulled their money out, stocks star ted to plummet. The
plunge was horrific. People throughout America lost their
investments, their savings - lost all their money. But not the
CEOs. They laughed all the way to the back, as they say. Was this
a conspiracy? No, how could you be so paranoid? It was just bad
luck.
Fashion: How long do clothes last? One year? Five years? Ten
years? Do you ever wear something from a previous decade? If not,
why not? Because you look stupid? Who says you look stupid? Oh,
the fashion police. Who are the fashion police? The people who
make new clothes.
If well-made and well cared-for, a lot of clothes could last a
long time. But then we wouldn't be giving money to the clothes
companies to buy new outfits. Profits would be down. Bad. So why
not just make people believe that they must wear the newest
clothes, or they'll look like dorks.
Or take this example. A couple of decades ago, women in Eastern
Europe tended not to wear bras. Sometimes they did, but often
they did not - not because they were morally depraved, but
because they usually felt no need for them. Today, after over ten
years of Western presence in Eastern Europe, women wear bras.
Why? Because bras are big business. Make them fashionable, and
the money starts rolling in.
Defrauding Women: Women are officially working now. They have
been doing the bulk of the work of civilization since the dawn of
humanity, but now it's official. They are actually working.
That's good. Except now you have to pay them. That's bad. Even if
you give them less than half of what an equally qualified and
experienced man makes, that's still money they get to keep. How
can you get all that green stuff back from them? Let's look at
just two strategies.
1) No child care: Now that women are often outside the home,
working full-time, they need someone to watch their kids. Will
husbands do it? Probably not, especially if they are working.
Will relatives do it? Possibly, if they are availabl e, but
chances are, they are not. So what about an affordable, universal
child care system, underwritten with federal funding, that would
make it possible for any woman to have someone watch her child
when necessary. Oh, but that would be another one of those
wild-eyed ideas. That socialism thing again. Yikes!
Instead, let's keep child care private and expensive. That way,
if a mother wants to earn money, she can give it right back, to
pay for others to watch her kids while she's working. Excellent!
2) Clothes: Here is that fashion thing again. Men have to spend a
lot of money on clothes to remain fashionable. But women all the
more so. A man can wear the same suit, slacks, sweater, or
whatever, over and over again. But a woman must have a much more
variable wardrobe to display at work. Otherwise she might be
considered slovenly. Bad for her career! So, spend, spend, spend.
Subscriptions: What are some of the services you subscribe to?
Phone? Cell-phone? Internet? Cable? Let's say you pay $70 per
month for cable; $50, for Internet; and $80 for phone and
cell-phone combined. That's $200 a month, and $2400 a year. Wow!
Do you take home at least $2400 every month?
Of course, these are essential services, which you couldn't live
without. They might be. But the bottom line is that you are
paying perhaps as much as one whole month's paycheck toward your
subscriptions every year. Or, even if you make far more than
$2400 a month, you might be paying half of one whole month's
paycheck for your subscriptions. That's a lot, no matter how you
look at it.
Christmas: I love Christmas. But let's face it. We have gone nuts
with this holiday. Many, many households spend far more on
Christmas than they can afford. They might save up during the
year and then splurge. They might take out credit card debt and
then spend the rest of the year struggling to pay it off. But
it's worth it, isn't it? So what if people forget what you gave
them by Valentine's Day? That's over a month of joy you've given
them!
Eating and Dieting: Our society is saturated with high calorie
foods. If you are forced to eat out often, as you might be if you
have a busy life, it is very difficult to find meals that do not
make you fat. Americans are becoming overweight at an alarming
rate. At the same time, a nonstop barrage of media messages tells
us that we must be as fit as an Olympic athlete. So what's the
solution? Many companies are more than happy to sell you low cal
food for an extra penny or two. Or expensive dietary products.
Not to mention the bonanza for the health clubs where people can
attempt to work off the extra calories. The obesity epidemic is
not bad. It's great business for the people who sell the food -
and for those who sell slim-down products and services.
Drug costs: Drug companies have some of the most fabulous profit
margins in the United States. We're talking up to 23%. So how
come people are not up at arms about the high cost of
medications? Easy, just convince them that pharmaceutical
companies need all this extra profit to do research for future
drugs. Never mind that these immense profit margins come after
the cost of research has been factored in. Shush! Don't let the
public find out!
Buy and be happy: What could be worse than having a population
content with themselves and with the things they have? I mean,
these people wouldn't buy anything! What we need is an all-out
assault of advertising telling everyone that they are no good,
cannot be good - until they buy our product! You are not fit for
this world without the newest car. Your home is worthless without
the latest dishwasher. You will never have a good relationship
without these clothes. Buy my product and be happy. Of course,
the beauty of this approach is that they'll never be happy with
just that product. But now that they are conditioned to seek
their happiness in shopping , they'll be back for more. The cycle
continues, and the merchants make out like bandits.
Built-in Obsolescence: The above principle is good, excellent, in
fact. But there are those who are not swayed by it. There are
those people in America who want to hold on to a product for
several years, perhaps even decades. They do not realize the
financial damage they are causing to corporations! But even these
diehards can be dealt with. What's the secret? Built-in
obsolescence. Make a product so that it can last only for just a
few years. Then they'll have to buy the new thing. Forget the old
"built-to-last" motto. That was in the years when
merchants obviously were not interested in making money.
Changes in technology come in handy too. Just when you have
finally mastered the latest software, the latest gadget, the
latest computer - voila, it's obsolete. Buy the next one. And if
you think that you're VHS tape collection is pretty complete?
Here come the DVDs - t hen, after them, whatever is next. But
first you'll have the chance to create an extensive DVD library.
Why not force people to buy the same movie at least once a
decade! The same goes for music of course. Records, tapes, CDs,
MP3 players. Cool!
Credit: Getting people to buy is good. But what's even better is
to get them to buy stuff they can't afford. Give'em plenty of
credit! Send credit offers even to two-year-olds. They'll be
paying for the product, plus for the interest on the credit, so,
all-in-all, you can get them to pay much more than they had
bargained for. Sometimes much, much more. And if they can't make
the payments? All the better. They'll have bad credit, which
means that their credit rate will be even higher in the future.
So they'll be forced to pay an even higher percentage.
Conclusion: Whew! Well, this has been quite a trip. Now you can
see how corporate America has solved the problem of too much
middle-class wealth in this nation. In just fifty years, they've
made off with most of the wealth of the middle-class. Not bad!
But the game is not over yet.
Zoltan
Abraham's article was originally published on GrassrootsHope.