Commentary: Fear and loathing of Occupy Wall Street

Issac Bailey is a columnist for The Sun-News, in Myrtle Beach, South Carolina.
Issac Bailey is a columnist for The Sun-News, in Myrtle Beach, South Carolina. MCT

Frank Luntz, the ultra-popular consultant best known for his work in Republican circles and on the Fox News Channel, came here shortly before the 2008 elections and urged members of the Myrtle Beach Area Chamber of Commerce to brace for hard times and to find a way to sell vacationers on a vision of relaxing in Myrtle Beach, not fighting with lines or hassle.

The American people were having a hard time trusting businesses and were beginning to spend less, he said.

“It doesn’t matter what you sell, it matters what [the audience takes] from it, the visuals, the words, how people react to it,” he told the crowd.

He ended up being right about who would be elected president, Barack Obama, and that the economy was getting bad and the problems would continue for quite a while.

Fast forward almost four years, and just recently Luntz was warning a group of Republican governors to be afraid, very afraid, of Occupy Wall Street.

“I’m so scared of this anti-Wall Street effort. I’m frightened to death,” he said. “They’re having an impact on what the American people think of capitalism.”

Luntz is a smart man but is nonetheless misreading the anger of millions of Americans. They aren’t upset with capitalism – they are upset with the supposed capitalist system that has been set up through a too-cozy relationship between the leaders in Washington and Wall Street.

They are mad at those practicing a form of capitalism of which Adam Smith would not be proud.

Smith envisioned a system in which entrepreneurs and businesses provide a public good or service and are rewarded for their innovation.

More Americans are beginning to understand that’s not the system currently in place, that instead those at the top seem more concerned with protecting concentrated wealth than improving people’s lives.

It is one in which the majority of Fortune 500 companies either pay no corporate taxes or receive a refund and those tax breaks are protected, while the ruling class’s ire is aimed instead at the 47 percent of Americans – the poorest among us – who didn’t pay federal income taxes in recent years because they don’t make enough money to qualify.

It is a system that produced this reality: According to IRS figures, the top 400 richest families have as much wealth as the poorest 150 million Americans combined.

It is one in which the poorest among us are demonized and made to submit to useless drug tests and other hurdles to make sure they don’t waste government dollars – while large corporations and executives who receive billions in government subsidies are spared such indignities.

It is one in which all but the tiniest slice of the income of the richest among us is subject to the payroll tax, while every dollar made by the poor, middle and most of the upper-middle classes is, one in which politicians suggest cutting benefits from those already on the economic edge instead of subjecting just a fraction more of the income of the super rich to fund Social Security.

It is one in which top executives are much more likely to cut hundreds of thousands of employees off their rolls instead of forfeiting their multi-million-dollar bonuses.

It is one in which the executive pay system and hyper focus on short-term stock gains convinces the most powerful among us to take unnecessary risks, and when those risks lead to failure they receive parachute termination packages while the average employee is simply terminated.

It is one in which the poor and middle class are more likely to face tax audits than the super-wealthy.

The fact is one group of people has more power to change that than any other: the super wealthy.

It was recently reported that Eugene Isenberg, chairman of Nabors, an energy services company, earned a combined $108 million between 2008 and 2010, and when he gave up his title as chief executive officer, he received another $100 million, meaning he can buy just about anything he wants, burn some of the cash in the fireplace to keep warm and still never run out.

But he still forces shareholders to subsidize his use of corporate jets and other such perks, many of which are not disclosed or are hidden in legalese.

Several top executives do the same and have been doing so for the past couple of decades.

Such costs add up to millions of dollars a year for not only shareholders but also taxpayers because of the hard-to-discern tax breaks the richest receive. That’s on top of billions of dollars of various tax subsidies these companies receive.

Yet, not many of them believe enough is enough. Not many of them say a $100 million payout is too much compensation, particularly when so many of the employees who help make the company’s profits possible are suffering or afraid of losing their jobs or meager retirement money.

Not many top executives today seem to believe that it would be better for their company, their workers and the everyday American taxpayer if they limit how much they take in so that money can go to reducing the country’s deficit and saving jobs performed by people who make far, far less.

Not many of them say that as long as the corporations they lead receive government subsidies in any form executive bonuses should be capped. Depending on the year and who’s doing the measuring, top executives earn hundreds of times as much as the typical worker. The Institute for Policy Studies said it peaked at 525 times the average worker’s pay in 2000 and was at roughly 263 times in 2009.

What if they only earned 50 times as much instead?

Could they survive on a $2.5 million annual salary instead of $20 million in compensation if the median worker earns $50,000?

If they were serious about protecting the image of capitalism, new government regulations and Wall Street protests of angry Americans would not be necessary to convince them that such gestures would be good for them, their companies and the country.

And if they didn’t want to submit to a cap, their companies would become ineligible for the billions of dollars of government help they now receive. That would transform the system back into a truly free enterprise while freeing up government funding to help the small businesses who could then produce more jobs.

It would also stop forcing poor states such as South Carolina to fork over $1 billion incentive packages to corporations such as Boeing, corporations who don’t need the money but demand it anyway because they know if one poor state refuses to pay the next one will.

Or instead of doing the right thing, executives could adopt a strategy created by marketing maestros such as Luntz, which are designed to convince Americans to not believe their own eyes about our unfair economic system – a system one of our major political parties seems hellbent on preserving.

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