Real wage growth, related to worker productivity gains, have been diverted to corporations, their boards of directors, and the rest of the ONE%, via stock dividends, for over three decades. Just look at what happened:
Not only did the income and wealth of the ONE% exceed any ethical valuation, the bank accounts of corporations snowballed with the remaining stolen wages, and savings from reduction in benefits, shipping jobs overseas, and automation in the workplace. These growing profits were invested by the banks to generate even more money by loaning them back to the workers. One investment was collateralized loans. Another was millions of unsolicited credit cards to the middle class and poor. The repackaged wages buried in these loans would help appease the workers, who lacked real wage growth and weren’t inclined unionize to get real wage growth.
But repackaging stolen wages and other excessive profits as loans wasn’t enough for the ONE%. They decided to repackage all that loaned money as collateralized debt obligations (CDO) and sell them as a ‘safe’ investment. In addition, they created and sold Credit Default Swaps (CDS), or insurance for all these ‘safe’ asset backed securities, which included mortgage backed securities. They could even sell multiple CDSs for the same derivative. Some, who saw the end coming, even got richer with CDSs. (This was like everyone in your subdivision, buying house insurance for your home – everyone wins if your house burns down, especially if some saw the fire smoldering and bought a second or third policy before the alarm was sounded.)
Then the believed value of all that greedy investing collapsed. The middle class and the poor were not only robbed of real wage growth, but left with high unemployment and an empty bag of all those ‘safe’ derivatives that the ONE% had been trading back and forth and insuring against failure.
The ONE% owes America, the middle class, and poor – BIG – for their unethical behavior and their grossly excessive greed. The tax rates and progressive tax schedule from 1975 should be reinstated, the Citizens United decision must be declared unlawful, and democracy must be extended from its place in politics to the workplace: abolish boards of directors – the “double high” ONE%ers who orchestrated this destruction of America’s once caring democracy.
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Love your blog, very thorough. I would like to reprint part of it in an upcoming free virtual magazine I sometimes publish to alert people to the variety of information that exists out there on the web. If you would like more information contact me at the email above. Thank you for all you work.
E. Joesph Davis
P.S The Magazine is called Revolutionary's Voice, old editions can be found at Scribd.com (search The Ten Magazine, Revolutionary's Voice)