Clawing Back Some Billions

I have thought the following for a long time (by Les Leopold in the Huffington Post--online of course) but of course it won't happen, because those same billionaires control both the politicians and the bulk of the mass media. In other words, we are not really a democracy at all but a plutocracy (aka oligarchy):

For the past thirty years we have minted billionaires, and we have created
the most unequal distribution of wealth since 1928-29. This didn't happen by
accident. We deliberately deregulated the financial sector and we deliberately
eliminated the steep progressive taxes on the super-rich that had kept in check
our income distribution.

By unleashing capital and finance we were supposed to get an enormous
investment boom in real goods and services. Instead we got a fantasy finance
boom as Wall Street marketed derivatives to those with excess capital. We
also got the biggest crash since the Great Depression.

Perhaps the most dramatic measure of our emerging billionaire bailout
society is seen by comparing compensation for the top 100 CEOs and to that of
average workers (the 100 million or so non-supervisory production workers). In
1970 the ratio was 45 to 1. By 2006 it was 1,723 to one. (The Looting of America
p.167)

Perhaps the most damaging feature of our billionaire bailout society is the
"jobless recovery." This oxymoron refers to an economy that is growing, but that
can't produce nearly enough jobs to reach full employment (an unemployment rate
below 5 percent). Our current jobless recovery will be the worst ever. Right now
the BLS (U6) jobless rate stands at 17.0 percent -- and climbing. (This counts
those without work plus those who have part-time jobs because they can't find
full-time work.) If the billionaire bailout society becomes permanent, we may
never see full employment again.

Why is that? Because you don't need a full employment society to mint
billionaires. Reflect for a moment on Goldman Sachs. They do not have individual
depositors. They are not public brokers. They do not make loans to small
business. They are in the business of making money by playing the financial
markets, from mergers and acquisitions, from trading, and from creating and
selling fantasy finance instruments.

In our billionaire bailout society these are unquestioned
positive activities. But what value do they produce in the real economy? What is
their contribution to market efficiency? How do they lower the cost of capital?
How do these activities create jobs in the real economy? Good luck answering
those questions because they don't do any of that. They just make money for
themselves while producing little or no value to our society.

It's obvious we need to break up these large institutions so that
we won't have to bail them out the next time around -- which may come sooner
than expected given the lack of jobs and the fact that the financial casino is
open again.

But we can't solve the bailouts without addressing the billionaire part
of the equation. Two years ago the richest 400 Americans had a combined
wealth of $1.57 trillion. Last year during the crash their wealth dropped to
"only" $1.27 trillion. Now they are set to rise again. We need to tie their
wealth of our richest to putting our people back to work.

Here's the simplest and most controversial approach: a 10 percent
wealth tax on all those with more than $500 million -- until unemployment drops
below 5 percent. The money collected would come to about $150 billion a year.
That money should be directly invested in public works programs to put our
people to work -- a Green Corps to weatherize every home and office in the
country -- a Youth Corps to provide work for unemployed high school and college
graduates.
(I realize that many Americans detest the idea of taxing anyone's
assets, even billionaires'. But let's be realistic: That's where our society's
wealth has gone and we need that wealth to put people back to work. Some
billionaires do create large numbers of jobs, but not enough. They can
contribute more and not feel a bit of pain or suffering.)