Is It Time for a Capitalism Limit Amendment?
By Allen
J Duffis
Published: July 5, 2008
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"We can have a democracy or we can
have great wealth concentrated in the hands of the few. We cannot have both." Supreme Court Justice Louis Brandeis (1856-1941)
Those unchallengeable words of truth and undeniable wisdom appear to be lost on many of my Conservative brethren, even those who declare themselves to be - Middle of the Road. Like their more extreme fellow travelers, they honestly adhere to the 'belief' that - allowing the wealthy to keep most of their money, in the long run, renders the economics of the rest of us - better. 
Via a contrived mythology very much akin to that employed by the 'Dixicrats' of the old south to retain power, by pitting poor Whites against poor Blacks, America's corporate elite and their advocates in both political parties have strived to establish this absurd and patently false viewpoint as truth. And they have gone out of their way to meet every move toward change in the opposite direction with the cry - Socialism. When I speak of 'limiting capitalism', I am addressing its excesses at the hands of a few, not its obvious virtues to the country as a whole. I would be the last person to deny that it was the force of Capitalism, freely applied, which crafted the United States into the economic and military superpower that it was for most of the 20th century. The historic builders of our industrial society, synonymous with the names Rockefeller, Carnegie and Mellon (aka 'robber barons'), lined their pockets and family coffers with American gold. But in their wake they left us railroads, steel mills, manufacturing plants, banking systems, well funded philantropic foundations and a fabulous oil extraction and refining technology that remains the envy of the world. 
They are gone now, but in their place have evolved something far less beneficial to America and its people. In the place of those benevolent rogues of the past, we now have the Gordon Gekikos of the new order. That's right, Gordon Gekko the factious and infamous Wall Street trader and power broker, so aptly portrayed by actor Michael Douglas in the 1987 film, "Wall Street." Such individuals are not builders and givers, they are breakers and takers. These are the people who invented 'greenmail', an extortion system whereby they can economically force the breakup a successful profit making company, and sell off its parts (like an auto theft chop shop) for a profit that exceeds its worth as a whole. And if in the process hundreds of working Americans lose their jobs and benefits, so be it - that's business. In the film, when asked by an associate with some conscience, why he wants to break a healthy company, Gekko responds coldly, "Because its breakable!" And for those of you who are tempted to regard this as simply a cinematic exaggeration, I suggest you read the book (or see the film) "Barbarians at the Gate" by Bryan Burrough and John Helyar. This book details the deliberate breakup of a century old healthy company that had never failed to be profitable, Nabisco. "Greed, for want of a better word, is good! Greed is good!" Gekko proselytized to the audience in the film, and in the real world we could almost hear a multitude of corporate CEO's applauding in rapacious agreement. But is greed good for everyone? Absolutely not! Therefore, we must ask ourselves, without succumbing to political partisanship, if greed is good for a nation? And again, the answer has to be - absolutely not! I am also fully aware that there are some of you who will not only question my proposals to limit capitalism, but who will outright reject my ideas because of avid allegiance to one political philosophy or another. All I ask is that you simply give it some honest nonpartisan though, take careful inventory of the present state of America and - "Think!" Today's America: A Modern Day Company Town Polonius wouldn't have gotten very far in America today. He's the Shakespeare character in Hamlet who warned, "Neither a borrower, nor a lender be." Unfortunately, modern day America is overrun with both borrowers and lenders. How We Got Here: 
The mortgage meltdown did not happen over night, but was deliberately directed along a course, fueled by greed, by those in who's hands rests the economic security of our nation - the banking and securities industry. As an overall average, encompassing credit cards, mortgages, student loans and more, American consumers owed a grand total of $1.9773 trillion in October 2003, according to statistics on consumer credit from the Federal Reserve. That's about $18,654 per household, a figure that doesn't include mortgage debt. And that number was up more than 41% from the $1.3999 trillion consumers owed in 1998. The majority of consumer borrowing, about 63%, is represented by so-called "non-revolving" debt such as automobile loans. But "revolving" credit, which most typically involves credit cards, is an increasingly significant part of the equation. Revolving debt currently totals $735.3 billion; that's about 31% higher than it was only five years ago. And it is important to note that the figure has more than doubled in a decade. During this time period, the average amount of
credit card debt in households with more than one card was more than $8,000
(based upon data from CardWeb.com): And that was 167% more than the $3,000
average for households in 1990. Do you see
where we were headed and how we finally arrived here in 2008? Among the key drivers of debt expansion in
years quoted:
During this same crucial time period, Lydia Sermons-Ward, spokeswoman for the National Foundation for Credit Counselors stated the following: "Credit for consumers with fair or poor
credit ratings typically comes with higher fees and interest rates. And while
that access to capital helps some disenfranchised consumers, the availability of
risk-based credit has also greatly increased the amount of debt per household,
and could lead to more financial problems for families." In the here and now, 18 years later, the portrait of American citizenry debt, as incredulous as it may seem, is even bleaker. All of our people, from the top of the Middle Class to the bottom of the Lower Economic Class (the Working Poor), have become a new generation of indentured servants: very much like the ones who came over from England to work in the new 'Land of the Free.' 
The end result of all of this loose credit and 'pay tomorrow philosophy', is that our fellow citizens are now almost totally addicted to Credit and, in the process, indebted to the Corporate structure - for life. Welcome to the New American Company Town. The average American has been professionally weaned by Corporate America, to earn just enough to barely keep up the payments on their futures. And now, their minions in the federal government would like to 'privatize' your Social Security because they say - it will be better for you! Think - of the transformation of our working class fortunes in the last three decades, all at he hands of Corporate America - and as evidenced and reflected in the daily news: the tobacco companies, the S&L scandals, Enron, the pension rip-offs, the 401K looting of failed companies and corporations, and the mortgage crisis - to name just a few. It would also not hurt to keep in mind that it is from this same 'corrupt dirty pool', that many in Congress advocate we choose the talent to entrust our Social Security System to. That's right, it is from this 'morally bankrupt corporate neighborhood' that we are being asked to entrust the welfare of Social Security funds under the proposed - Privatization of Social Security. After careful reflection, if anyone out there
is still willing to buy this argument - please contact me. I have some slightly
waterlogged land and a famous bridge in New York City to sell to you. The Advocates of Super Wealth 
There are those among us who advocate limitless economic growth via investor wealth, gained at the hands of the few. They feel that there is absolutely nothing economically or morally wrong about the wealth of a nation being held in a stranglehold by less than 2.0 percent of the population. Such a personage is lawyer, former university professor and wealthy economist - Ben Stein. Some have called Stein a "Nixon apologist" due to his fervent defense of Nixon's legacy. As recently as 2005, in the American Spectator, Stein said, "Nixon was a peacemaker. He was a lying, conniving, covering-up peacemaker. He was not a lying, conniving drug addict like JFK, a lying, conniving war-starter like LBJ, or a lying, conniving seducer like Clinton—a lying, conniving peacemaker." Despite his prominence as a commentator on politics and economics, Stein is best known for his career as a Hollywood consultant, and by his performance as a monotonic high school teacher delivering an - unscripted - economics lecture, in the 1986 film, "Ferris Bueller's Day Off." Though labeled as a political and economic Conservative, Stein has criticized the U.S. tax code for being too lenient on the wealthy. He has also heralded the observation made by Warren Buffett, one of the richest individuals in the world (who pays mostly capital gains tax), that Buffet pays a lower overall tax rate than his secretaries (who pay income taxes). Stein has advocated increasing taxation on the wealthy. Yet despite this admirable stance, Stein continues to defend the outrageous and sometimes astronomical salaries and Golden Parachutes of American CEO's, and the 'wind-fall' profits of the energy companies. 
Another person of interest in this category is the late Leona Mindy Rosenthal Helmsley (July 1920-August 2007). Helmsley was a billionaire hotel operator and real estate investor, with a flamboyant personality and a reputation for tyrannical behavior that earned her the nickname the "Queen of Mean." This image of Helmsley became indelibly etched on the mind of the public at large, when a former housekeeper testified that she had heard Helmsley say: "We don't pay taxes. Only the little people pay taxes." She was later convicted of federal income tax evasion in 1989 and served 19 months in prison, and two more months under house arrest after receiving an initial sentence of 16 years. To the end of her life, Helmsley continued to espouse her belief that the general public (the 'little people') was an unconscionable drain on the fortunes of the wealthy. She also bequeathed her 6-8 billion fortune to her dog. 
Then of course we have the likes of Tyco International CEO, Dennis Kozlowski, and his company's equally notorious CFO, Mark Swartz. Both men were convicted of looting the industrial products and services company of more than $600 million to fund extravagant lifestyles featuring expensive jewelry, an opulent Manhattan apartment and a gaudy Mediterranean birthday party for Kozlowski's wife, that cost millions. Both Tyco officers were sentenced to eight and one-third years to 25 years in prison for stealing hundreds of millions of dollars from the company. It is important to note that despite the losses to their company's investors, and the massive layoffs that were incurred due to their actions, either man felt they had done anything wrong. These type of individuals, both walking the streets and serving time, are members of that 'less than 2.0 percent' of the American population, that control almost 80 percent of its wealth. Now, their brethren in the private sector want to control your Social Security. Scares the hell out of you, doesn't it? It should! The Most Destructive Addiction "...more is better and too much is enough" We must all be willing to accept the fact that there are many people, maybe all of us to some degree, who are addicted to the pursuit of greater personal wealth. And some of us are more successful at achieving great wealth than others. Unfortunately however, there are those who are extremely talented at manipulating the system, and gaining great wealth with total disregard to the ultimate welfare of others. They place no moral limits on the pursuit, and will continue the destructive gathering of excessive revenue - right to their graves. And they simply refuse to understand or take heed of the fact that a company, corporation and a nation is the sum total of its people - all of them. They do so because what they really crave after they have gained all they desired materially, is power. Power is the final derivative of that limitless pursuit - raw power! And once they have it, they will do anything they feel the need to do to retain that power. In today's America, we need to apply the brakes to those who seek to gain so much they can never use and, in the process, give nothing back unless they have a gun placed to their heads. We have to put s stop to orchestrated Greed by limiting the Profit Factor. Excess Profit: An American Economic Cancer The Profit Incentive (or motive as some refer to it) has been the driving force behind the economic instrument of capitalism, and I would be the last person to deny that it has worked well. In fact, I will go even further and state, emphatically, that the America we have come to know and love could not have been built without the profit motive. However, I remain rooted in my opinion that we have to place a limit on the specter of - Profit. We must install limits because every force on earth and in the universe has limits. Limits are placed there by nature, so that the purpose of the force is not exceeded beyond destruction. 
We all agree to this principle in the worlds of Science and Basic Economics. But whenever the point is brought up in the company of learned individuals or even the working class, a terrible cold silence of disbelief evolves. Immediately will follow shouts of "Socialism!" and Communism!" You see, what I am speaking of is limiting the Profit Incentive for both the - Wealthy and the Working Class. Yes, the Working Class has also made its not too small contribution to this economic mess the country finds itself in. The massive Automobile Workers of America unions, over the years, have extorted huge hourly pay rates and scandalous benefit packages, which have all but killed off the auto industry when it faced rising international competition. As a further example, New York City once hosted 30 thriving daily newspapers and over 100 book publishers. But the printers unions, over the years and before computerized typesetting, priced them all out of business. Amendment as a Working Draft Therefore, for better or worse (which at present we appear to be experiencing the latter) I propose an actual amendment to the Constitution of the United States, to place a workable limit on the economic instrument of Capitalism. While we are at it, like it or not, let us all bite the bullet and accept that the only real instrument to limit runaway capitalism is - ready? - Taxation. What I am advocating is that a properly set system of taxation, one that does not leave the Middle Income taxpayer in the lurch as the flawed Alternative Minimum Tax (AMT) system did. The ATM was set up to prevent the very wealthy from employing an endless field of tax loopholes for their lawyers and CPA's to exploit, to avoid paying any tax at all. The ATM system's basic flaw was not being set to an automatic cost of living adjustment (COLA). As it was set up, all cost of living adjustment had to be, not only approved by congress, but initiated as well. Naturally, such bills were subject to the usual addition of other legislative bills and proposals, that in most cases sunk any chances of passage of that bill. And in time, the Middle Income Taxpayer, due to the affects of inflation on his property value and income, fell victim to the ATM. What I suggest to effectively replace this damaged system, in the form of a Constitutional amendment, is the following draft proposal: The Minimum Tax Amendment The Congress shall install an addition to replace the present tax system, whereby all taxpayers, which shall be inclusive of corporations and individuals who are incorporated, will be compelled to pay a minimum tax on their gross income of ten percent. To this system shall be incorporated a secondary functional component that will allow tax relief to individuals who earn at the top level of a determined income range, set by Congress in committee and conjunction with the General Accounting Office and the Internal Revenue Service. And all necessary adjustments to the taxable level and cost of living adjustments shall be set shall be set at the end of each congressional elective period, or every three years at the latest - before a new congress shall be considered sitting and legitimate. The taxpayer level in reference shall be officially listed as Middle Income. To this system shall be incorporated a tertiary functional component, one that shall be referenced and limited to corporations and individuals whose fortunes and incomes are incorporated. The purpose of this component shall be to set a limit on excessive profit or on the so-called windfall profits that result from excessive price increases in all elements that affect the well being and life, liberty and pursuit of happiness so entitled in the American Bill of Rights. Such excessive profits shall be considered real and potently dangerous to the well being of the nation and all its inhabitants, and said taxes on such, in total, shall be appropriated in conjunction with that collected from the Middle Class, to be returned to the treasury as a leveling factor to the economy as a whole to the benefit of all. It is also hereby stipulated that any elected or appointed federal employee accused of any attempts to circumvent this amendment for the purposes of self aggrandizement, or on behalf of any private interests, is to be tried for said crimes against the state. It is also hereby stipulated that such trials that may come about for such misdemeanors shall be held in open federal courts only, and be judged solely by appointed justices of the court. Congress shall have no power to bring open or closed trials of said cases before it, or in any corresponding committee set up or to be set up within its body. A System that Works for Everyone Can such a modified taxation system work? Many others and I think it can. However, there are those who feel that for Capitalism to work effectively, it must be allowed to function openly and without any limits - sort of like the old Wild West. And the opponents of such a restriction often refer to the effort as - taxing success. Knowing and experiencing what America is going through at present - what do you think? Remember now, I said - "Think!"
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