Growing up in the Reagan Republican dominated 1980’s, we were always told that tax cuts for the richest Americans and consequently the businesses they created and/or owned, managed etc. was the fuel that spurred the engine of job growth. In other words, that there was a direct connection between cutting taxes on the wealthy and how many new jobs were created in America.
Well that’s questionable. In retrospect, was the damage to the deficit and the creation of debt worth the creation of jobs many that were temporary and/or paid the lowest wage possible?
But allowing that as a valid point for the moment, what was “true” a decade or longer ago is definitely not “true” anymore.
Why do I say this? Because the oft discussed growing distance between the 1% superwealthy and everyone else indicates that this connection if it ever existed does not exist any longer.
The superwealthy in this country are no longer tied directly to job creation in the USA for wealth acquisition. Rather, they invest in companies that have moved overseas to take advantage of lower wages, no environmental laws, etc. This is what Globalism and NAFTA has wrought.
They are also able to grow their wealth through investments outside of the normal stock market shares in companies. The repeal of the Glass-Steagall act in 1999 by President Clinton working hand in hand with Republicans got rid of the separation between commercial banks and investment banks. The creation of a number of complex and unethical investment instruments (derivatives) allowed people to invest in the predicted collectability of bundled debt. It was like a form of gambling and what they were betting on was if people could pay their mortgages and credit card debt when it was exposed that in fact this was a house of cards and people were funding their mortgages and credit card debt with more debt everything collapsed.
But the superwealthy were not affected too badly by this. The government bailed out the big players under the excuse that bank failures affect the little guy too.
The bottom line is the lack of a real safety net, the lack of real government assistance in education and in health care is creating a permanent underclass without access to these services and without access to jobs in depressed economic times.
The paying of taxes at this point is a necessity for the other 99% to live decent lives. Those jobs supposedly created by the Bush tax cuts are not coming, were never coming. The acquisition of wealth among the superwealthy is no longer reliant on the American worker.
I also commend the Occupy movement for advancing bringing back something like Glass-Steagall-Let’s get rid of the notion of “Too Big to Fail” once and for all.