Transcript: Thom Hartmann: The Big Picture: Big Business wins...small business loses. 6 October '11
99ers aren't just the rich one percent average person against the other 99 percent average person of us.
They're also the 1 percent of super-rich corporations eating the lunch of the other 99 percent of small businesses in America.
Here's how it works:
The Small Business Administration defines a “small business” as a firm that employs fewer than 500 people - which frankly doesn’t sound very small at all - but compared to transnational behemoths like General Electric - which employs 300,000 people - or McDonalds which employs 1.5 million people - or Wal Mart which employs 2.1 million people - 500 is pretty small.
These small businesses make up more than 99% of all the businesses in America - the giant transnational corporations are fewer than 1% of American companies.
And when it comes to job creation - these 99% of the small businesses employ more than half of the workers in America - and have employed 65% of all new workers over the last 2 decades.
So if there were such a thing as “job creators” - they’re the bosses at mom and pop shops and your local restaurants - and not on Wall Street.
When our economy went in to full meltdown mode in 2008 and 2009 - the Fed opened up a secret lending window and dished out trillions of dollars to keep banks on Wall Street afloat.
But they didn't just lend to banking giants on Wall Street - they lent to that top 1 percent of mega corporations exclusively.
As the New York Times reported:
The Fed’s efforts to stave off a financial crisis reached far beyond Wall Street, touching manufacturers like General Electric, the Detroit automakers and Harley-Davidson.
General Electric, McDonald’s, Caterpillar, Verizon, even foreign corporations like Toyota, got handouts courtesy of the Fed.
And thanks to this help - these transnational giants are doing just fine - profits are up - and their CEOs are laughing all the way to the bank.
But someone forgot about the small businesses - you know - the ones that make up 99% of all businesses in America and employ more Americans than the big corporations.
The Fed didn't give them a penny.
And today - small business are in big trouble.
Senator Bernie Sanders was wondering what the heck this is all about - so he asked Fed Chairman Ben Bernanke that question on Tuesday during a Senate hearing:
Sen. Sanders: Unemployment is crisis situation now. Why aren't you doing for small business what you did for the large financial institutions?
Ben Bernanke: Well, we are addressing unemployment, and I just discussed in my testimony the aggressive steps we're taking to ease monetary policy, which is our main tool to...
Sen. Sanders: Are you prepared to provide low-interest loans to small businesses in the same way you provided it to large financial institutions around the world?
Ben Bernanke: I don't think that's our role. And I'm sure we don't have the authority to do that.
There you have it - the Fed doesn't give loans to small businesses - but does give loans to massive corporations.
This is a symptom of a form of government that goes by a variety of names - plutocracy, aristocracy, oligarchy.
It's the form of government that our nation's Founders fought to overthrow.
For example, the largest stockholders in the East India Company in the 1770s - whose tea was thrown in the harbor in Boston in 1773 because Parliament gave that company a massive tax cut - yes, it was a tax cut, a corporate tax cut that provoked the Boston Tea Party - the largest stockholders in that company were members of the Royal Family and members of Parliament.
The United Kingdom was an oligarchy with a monarchy - a form of government they'd had for almost a thousand years.
We threw them out of our country, and built a solid middle class and strong businesses at the core of that middle class.
Until Reagan stopped enforcing the Sherman Anti-Trust Act in 1982, and cut the top tax rate on millionaires and billionaires from 74 percent down to 28 percent.
The explosion of Mergers and Acquisitions in the early 1980s - the "M&A" mania - the so-called Reagan Revolution - was the beginning of the rise of the modern oligarchs in America.
Reagan - in perfect reverse Robin Hood manner - began a systematic looting of both the middle class and the commons - all that infrastructure, all the pieces of our nation.
We stopped building schools in the Reagan era, never picked it up again, but we did start building the fortunes of just a very, very few thousand rich people.
When the Forbes 400 richest individuals was first measured in 1982, their combined wealth was $91 billion.
Today it's 1.5 trillion, that's a 1600 percent increase - and instead of paying 74 percent income tax, the Forbes 400 richest individuals in America average, on average the pay 18 percent federal income tax because the top federal tax rate for billionaires and people like Paris Hilton who make their money sitting around the pool waiting for the dividend check is far lower than average working Americans.
When the Bush Crash happened in 2008, both the American Middle Class - and the small businesses they own - were in trouble, and so were some of the oligarchs.
And Bush and Bernanke decided to exclusively bail out the oligarchs.
And so today we have thousands of people in the streets representing the bottom 99 percent of America, saying they no longer want the fruits of their labors to go to support a system of oligarchy.
And now even the President is calling out the Oligarchs - saying that they should at least pay what their secretaries and janitors pay in taxes.
Frankly, if you want to really undo the oligarchy, we need to go a whole huge step further.
Break up the big banks, the big media giants, the big pharma giants, the big healthcare giants - right across the board. You know, virtually every major industry in America is now dominated by a handful of giant companies.
We need to break them back all up. The last president who did this was Jimmy Carter breaking up AT&T.
And as to the massive wealth these oligarchs have sucked out of us and our nation over the past thirty years?
Simple remedy - roll back the Reagan tax cuts.
That's The Big Picture.