chief business of America should be Americans
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
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
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
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
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
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
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
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.