Nathan Rudy, author of Scoundrel's Refuge
Scoundrel's Refuge

August 1, 2002

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The chief business of America should be Americans

The most famous quote used to defend corporate deregulation and tax cuts is from President Calvin Coolidge: "The chief business of the American people is business." It is trotted out time and time again as an example of the long-standing belief that business drives the country, and that we should get out of its way.

But most folks don't know the rest of the quote: "We (Americans) make no concealment of the fact that we want wealth, but there are many other things that we want very much more. We want peace and honor, and that charity which is so strong an element of all civilization. The chief ideal of the American people is idealism."

We lost sight of that idealism in our pursuit of unfettered corporations. We forgot that the creation of wealth - in business, in the stock market, in our homes - is not the goal of the American people. We are so much more than that, a special collection of folks from everywhere in the world who came together - and continue to gather - to promote the fact that people come first.

All the constructs of the people -- the governments and businesses and corporations -- exist to benefit Americans. It is time for us to once again take the long view, to see the goal of America again and stop looking a the tactics for getting there.

For some reason, though, they just don't get it

Even with today's corporate scandals, corruption, earnings misstatements and criminal behavior, there are still calls for cuts to corporate taxes and deregulation of industries in order to make it easier for them to do business.

A great example is yesterday's news that he House wants to give tax breaks to people who lost money investing in public corporations. That way, if a company lies about its earnings and you lose money as a result then the government -- not the fraudulent corporation or executives -- will reimburse you for part of the loss in a tax refund. Your taxes refund stock market losses caused by fraudulent, deregulated businesses.

Changes in the corporate tax laws allow companies like Stanley Tools to sell in America's lucrative markets but re-incorporate in Bermuda to avoid paying U.S. taxes. The top 10 of these corporations that have given up their American citizenship got more than $1 billion in government contracts last year. Your taxes creating profits for companies who move that money overseas.

Even as Bush signed the tougher Senate version of the corporate crime bill, there was an administrative move to continue the deregulation of the oil and electric industries.

The focus is not on how to make corporations more responsive to the will and need of the people, but on how to make it easier for corporations to support their own needs. The thought is that the unleashed corporation will create unlimited innovation and broadly distributed wealth.

That is, of course, not supported by recent or century-old history. A hundred years ago we saw incredible amounts of corporate abuse of employees, communities, the environment and the country. The results were the first significant reforms to corporate structures, the trust busting of Teddy Roosevelt, and significant increases in the standard of living for everyday Americans.

In the past two decades we have seen the airline, telecom, energy and financial industries deregulated at incredible rates. Interestingly, these four industries that were set free from government interference are the ones that rose the fastest during the 1990s bubble. The deregulation crowd ran around crowing, taking credit for their foresight and the return of business to the forefront of America. "The rising tide will float all the boats."

We're taking on water, captain!

Then the bubble burst, and it turned out that most of that growth was based on bad business practices and fraudulent books. Americans who thought they were getting rich in the stock markets were actually being scammed by these corrupt corporations. When the 2000 census numbers came out there were actually more children living in poverty than in 1980, and a wider income gap between the rich and everyone else.

With the tide going out the rich boats moved to deeper water and normal folk's dinghies started taking on water and ran aground.

For some reason, the proud anti-tax/deregulation crowd is not taking credit for the ugly results of their meddling. They say that Enron, Global Crossing, WorldCom, Qwest, Imclone, Arthur Anderson and the rest are just an aberration.

I've heard more than one Sunday morning pundit say, "This is just capitalism at work. The bad apples are being cleared out and this will make the system healthier in the future."

Tell it to the guy who lost his retirement savings

You tell the thousands of Americans who lost their jobs and life-savings at Enron due to outright fraud that this is healthy. Tell the employees of Lucent, Nortel and Corning who have been laid-off because their companies based their futures on WorldCom's false books that this is just normal. You tell the 62 year old who was ready to retire but can't because her nest egg was invested in Tyco and Imclone that this is a good thing.

It's not a good thing, because these good Americans got screwed. It's possible that in 10, 20, 30 years there may be a benefit to the economy from this shakeout, but these folks have lost houses, cars, careers, retirements, medical coverage, and more due to the fraud and outright criminality of the "few bad apples." Even worse, these same scamsters got their employees' and investors' hopes up by promising bright, shiny futures all the time knowing that someday the entire Ponzi scheme would collapse.

I'm not a Pirates fan. Or anti-business.

There are folks who will read this and say that I am anti-business. Nothing could be further from the truth except maybe to say I am a Pittsburgh Pirates fan.

I believe that commerce is a vital part of our society, culture and government. The fact that anyone with a good idea, some moxie and a connection or two can create a viable business is a great thing. Someday, I hope to do it myself.

But a corporate business that is truly viable and deserves the protections and rights accorded to it by the government does not focus on the short term. That only leads to poor planning and in some cases corruption.

Instead, a healthy business works to create a good product that people need, to produce that product at a reasonable cost, and to sell it at a good price so people can buy it. It should also seek to pay a reasonable wage to its employees.

Henry Ford had this one right. He was asked once why he paid his employees so well, and he replied that when people had money they could buy his cars. It only made sense that to get money, they had to be paid a good wage.

Ford understood that the purpose of working was not to get paid, but to get the means to have a good life. As Calvin Coolidge said in the quote above, "We make no concealment of the fact that we want wealth, but there are many other things that we want very much more. We want peace and honor, and that charity which is so strong an element of all civilization."

Unfortunately, too many of us have forgotten that. It is time to get it back.

Comments are more than welcome, in fact encouraged, at

Nathan Rudy, a columnist, is a Democratic
Councilman from North Plainfield.