President George Bush and Gilded Age

[Michael Hoover <hooverm@xxxxxxxxxx>]

comments of Yoshi
Tsurumi, Professor of International Business, Baruch
College, the City University of New York, who taught the
world's most famous Harvard MBA in the 1970s:
http://www.glocom.org/opinions/essays/20040301_tsurumi_president/

Glocom
Japanese Institute of Global Communication
March 1, 2004
President George Bush and the Gilded Age
Yoshi Tsurumi (Professor of International Business, Baruch College, the
City University of New York )

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Something really strange has happened to the U.S. under the Bush
Administration. With her ever bulging budget deficits and foreign debts,
America's skewed income distribution is rapidly making the U.S. resemble
Argentina or Mexico. The "Jobless Recovery" is not a political mirage,
but a serious problem. America's GDP is increasing at an annual rate of
about 4.0% this year. But, only those Wall Street "money gamers" and
self-dealing "management aristocrats" of Corporate America are dizzy
with their huge bonuses, padded salaries, and self-dealt stock options.
The remaining hard working Americans cannot eat "GDP." The U.S. has
widening income gap between a few "haves" and many "have-nots."

During the last economic recovery period of March 1991 to April 1993, a
10% increase in GDP increased manufacturing jobs and service jobs 3% and
5.9% respectively. However, for the present economic recovery since
November 2001, a 10% increase in GDP is increasing manufacturing and
service jobs only 0.7% and 0.9% respectively. Just to keep up with her
population growth, the U.S. needs to create about 230,000 jobs a month.
If the U.S. wants to employ the 3 million unemployed workers thrown out
of work under the Bush Administration, the U.S. would have to create a
lot more jobs monthly. Last month, however, the U.S. only created
115,000 jobs. President Bush has now abandoned his earlier declared
promise of "creating 2.6 million jobs by the fall of 2004."

The unemployed rate of January this year was 5.6%, dipping only 0.1
percentage point. President Bush hailed it as the "unemployment declines
for four months in a row." In reality, however, the U.S. has had four
months of consecutive decline in the unemployment rate because so many
formerly "unemployed" became too discouraged to keep seeking jobs and
were eliminated from the unemployment statistics. The U.S. has over 5
million part-time job holders who want full time jobs but cannot find
them. In addition, the U.S. has 8 million persons who have had to settle
for full time jobs paying far less than their previous jobs. The
"jobless recovery" and the widening income gaps are aggravated by
massive migrations of good paying manufacturing and service jobs abroad.
Such migrations have been accelerated by President Bush's misguided tax
cuts.

At Harvard Business School, thirty years ago, George Bush was a student
of mine. I still vividly remember him. In my class, he declared that
"people are poor because they are lazy." He was opposed to labor unions,
social security, environmental protection, Medicare, and public schools.
To him, the antitrust watch dog, the Federal Trade Commission, and the
Securities Exchange Commission were unnecessary hindrances to "free
market competition." To him, Franklin Roosevelt's New Deal was
"socialism." Recently, President Bush's Federal Appeals Court Nominee,
California's Supreme Court Justice Janice Brown, repeated the same
broadside at her Senate hearing. She knew that her pronouncement would
please President Bush and Karl Rove and their Senators. President Bush
and his brain, Karl Rove, are leading a radical revolution of destroying
all the democratic political, social, judiciary, and economic
institutions that both Democrats and moderate Republicans had built
together since Roosevelt's New Deal.

In June 2003, Bill Moyers said that "Karl Rove has modeled the Bush
presidency on that of William Mckinley (1897-1901) and modeled himself
on Mark Hanna, the man who virtually manufactured McKinley. Mark Hanna
saw to it that Washington was ruled by business, railroads, and public
utility corporations." President Bush's tax cuts have given over 93% of
their benefits to large corporations and well-to-do households with over
250,000 dollars of annual income (about 10% of the U.S. households).
Moreover, President Bush's tax cuts are abolishing taxes on such
asset-based income as stock dividends and capital gains. He is opposed
to taxing management aristocrats' self-dealt stock options (salary
payment in kind). He is opposed to requiring the corporations to treat
such stock options as their personnel expenses. More than anything else,
management aristocrats' stock options are encouraging many corporations
to abandon manufacturing-and-supply procurements at home and switching
to imports from China and other lower-wage countries. He is phasing out
estate taxes. All these measures are transforming the past "potbelly
flower vase" shape of the U.S. income distribution to the "bottom-heavy
hour glass" shape.

This was the same kind of income distribution that the U.S. built during
the McKinley-Gilded Age. There was no Securitiesy Exchange Commission to
check "creative accounting" and Enron-WorldCom like malfeasance of
corporations. America had poor public schools and medical care. There
was no minimum wage or labor standard. Both federal and state
governments and courts were hostile to labor unions and civic groups
protesting the "injustices" of the society. The natural environment was
ravaged by railroads, mining, lumbering, and newly emerging oil and gas
firms. Abortion was illegal. Women did not even have the vote. In the
South, Christian fundamentalists were pressuring public schools to stop
teaching Charles Darwin's evolution theories. During the McKinley-Gilded
Age, America's democracy atrophied. And America embarked on her
imperialistic expansions of colonising Cuba, Panama, and the
Philippines.







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