In Financial World's July 11 1989 survey of Wall Street's "100 best paid", George Baker, who finished in 71st spot still earned an average of $3,846.00 per hour. {B98} In Forbes's October 16 1989 issue, attention was given to America's highest paid lawyers. Their list of 63 trial lawyers earned $750 million collectively. Based on a 40 hour work week and 52 working weeks per year, this represents an average compensation of $5,723.44 per hour!!

Should anyone be respected who vetoes a raise in the minimum wage to $4.55 per hour, or should someone who gets run off their feet serving fast foods for the minimum wage feel content that this group of lawyers earn on average seventeen hundred (1700) times as much per hour? In a similar way, Michael Milken, who made his money from selling LBO junk bonds, did so at the staggering rate of $213,346.00 per hour.

This wage control approach would at last put reins on members of our society such as the legal profession, who seem content to make their services too expensive for the bottom 90% of society to afford, while taking full advantage of the services of citizens who are, relatively speaking, being paid as slaves. (on $3.35 per hour minimum wage, or even $10 or $15 dollars per hour)

Egyptian slave labor built pyramids, whereas American slave labor builds tall rectangular skyscrapers. The alternate perspective is to view the pyramid builders not as slaves, but simply as workers who derived less benefit from their labor than the pharaohs.

We should not forget for one moment either, that when a corporation is forced to pay a court settlement, the losses (which include the lawyers fees) simply get passed along to the consumer, one way or another.

Even if strict "progressive" taxation on earnings in excess of say 20 times the minimum wage were introduced, the approach would still be susceptible to tax evasion because it would be based on Taxable Income. Safeway, Boeing or Walt Disney could still end up paying less taxes than a pensioner forced to supplement a meager income by fetching your french fries!!

  • 2. Make investment in America mandatory
    Instead of having to show one's loyalty to the country by swearing allegiance to the flag, or feigning one's loyalty by wrapping oneself in a flag, simply pass a law requiring all American citizens to invest at least three quarters of their assets within America. I have a sneaking suspicion that doing so would completely eliminate the unemployment problem. Perhaps even consider allowing Americans to invest abroad only if there is no unemployment at home. This policy would no doubt also ameliorate racial and economic problems involving the minorities.

  • 3. Provide harsh deterrents for white collar crime
    Many business practices that should be illegal, are not. A good example is that few money-laundering bankers are in jail anywhere in the world. Criminal laws have a tendency to ignore the elite as they have since Feudal times. This must be changed. For every crook handling large quantities of money (as with the drug trade), there is a banker! To consider these bankers, who quite obviously turn a blind eye to the source of large deposits, any less of an integral part of the criminal activity is to ignore reality. Because the elite own the banks and benefit directly from money laundering, laws have not been written to deter this type of criminal activity. Laws must be written to convict the elite who benefit from criminal activity. Their wealth should also be confiscated is currently done with the smaller fish who accumulate wealth from illegal activities such as the drug trade.

  • 4. Eliminate the transferability of tax losses
    This would eliminate the additional tax evasion related to the disposition of companies involved in leveraged buyouts, as well as the growing problem concerning the virtual sale of the hundred billion dollars worth of tax losses relating to the failing and failed S&Ls.

  • 5. Disallow interest payments as tax deductions
    North Dakota Democrat, Byron L. Dorgan is again behind a bill which is a modification of one which he introduced only days before the October 19, 1987 market crash. A study by the Securities and Exchange Commission suggests that the original bill (which would have largely removed the LBO tax deduction incentive) may well have triggered the 10% decline in prices on the 14th, 15th and 16th of October 1987, which in turn may have set the market up for the further 20% sell-off which occurred on the following Monday.

    If the SEC findings are to be believed, one would have to accept that corporations are valued less for their capacity to provide products and services, than for their artificial value as profit vehicles for speculators.

    In any case, Congressman Dorgan's bill, even in its present watered down form, would serve to discourage the continuing wave of takeovers. Unfortunately by now (two years later), most of the takeovers have already occurred, but better late than never.{B99}The very least that should be done is to invalidate the tax deductibility of interest payments on indebtedness which exceeds the owner equity. {B100}

  • 6. Raise bank owner's equity to at least 25%
    Limit the amount of money taken in by banks as deposits, to three times the amount of equity put up by the bank's shareholders. In other words, raise the matched equity from 4% to 25%. Gambling within the economy only occurs to the extent that it does, because the gamblers are basically not risking their own equity.

  • 7. In bankruptcies, make family wealth partially accessible.
    Make it impossible for the unscrupulous to grow steadily richer while leaving a trail of unpaid creditors and bankrupt businesses. Consider making wealth owned by spouses and dependent children at least partially accessible to the bankruptcy creditors.

  • 8. Back the currency with REAL wealth
    Ensure the currency is backed by real wealth, perhaps even by returning to the gold standard.

  • 9. Privatization and Deregulation
    Lastly, I must mention two extremely important topics which were only very briefly addressed in this chapter. They are:

    Both are essentially concessions to the economic elite, and have already cost the bottom 90% of Western societies an incredible loss of benefits. Each affects the working man's standard of living in no less a fashion than the bailout of banks and S&Ls, or the loss of tax revenue following LBOs. Neither topic was dealt with adequately because each merited more coverage than I was prepared to devote in this book. The media has largely avoided discussing either topic objectively or in depth, mainly because both yield benefits to the economic elite by the removal of benefits from the rest of the country.

    Privatization amounts to a politically motivated, quid pro quo distribution of previously developed national wealth to the richest 10%.

    Deregulation gives the unscrupulous a freer hand to sacrifice standards and service for profit maximization.
    Just as deregulation in the banking industry caused the taxpayer a $300 billion S&L mop-up headache, deregulation in other industries has had similar drastic repercussions.

    Deregulation of the airline industry, for instance, allowed for profit oriented reductions to maintenance programs. Within no time at all, planes were breaking up in mid air, cracked fuselages were being sent up till the doors blew off and the sky was visible from the passenger section, etc.. Competition was drastically reduced as the industry was reduced through mergers and acquisitions to six mega-carriers which fly about 90% of all passengers. To add to the problems, foreign airlines funded some of the industry takeovers. But worst of all, the cost of financing the LBOs was passed directly on to the passengers in the form of ticket price rises. {B101}

    Other sectors of our economy have been given the opportunity to set their own standards, with similar benefits to the general public. The reader should, out of self defense, become more concerned and informed regarding these two additional issues. However, discussion of the rip-offs must of necessity terminate to get on with other equally important issues.

    Let's now turn our attention to the democratic process itself to expose just how and why politicians elected by the bottom 90% continue to churn out legislation that does not serve the best interests of the majority whom they supposedly represent. As we shall see, gaining control over the writing of the tax avoidance legislation may not be as simple a task as those who trust in their democracy may think. Don't forget that the politicians voted in by the bottom 90%, are the very same politicians who pass the tax avoidance legislation favoring the elite!!

    The next chapter is therefore devoted to showing that just as the nation has been manipulated and victimized economically, it has been manipulated and victimized with respect to democracy. In America, democracy is as much a hoax as equal opportunity and equitable prosperity. Does that sound unreasonable or even impossible? Then read on.


    : to trick into believing or accepting or doing something
    : play upon the credulity of as to bring about belief in or acceptance
    of what is actually false and often preposterous
    : take in

    {B98} "Wall Street 100" Financial World (Jul 11 1989): p33
    {B99} "Trigger-pulling on hostile takeovers" Insight (Jun 19 1989): p44
    {B100} "Washington's war against LBO debt" Fortune (Feb 13 1989): p92
    {B101} "Memo to the airlines: Deregulation days are numbered" BusinessWeek (Nov 13 1989): p59