This morning’s headlines in Dawsonville GA, contained a story about a 71 year old man, Norris Therlow Goss, working on a three man crew, clearing a lot, who was killed by a falling pine tree.
Wait let’s think this through. Why was he out there?
OK who remembers Stagflation?
Let me take you back to a time when gas was 25 cents a gallon, we drove fast muscle cars and left our doors unlocked. Ah those were the days. Of course minimum wage was only a couple of bucks an hour, and I was working for old Mr. Clark on his dairy farm, doing everything from milking the cows, cleaning up behind them, spreading manure to slinging 50 pound hay bales in the Fall. My first jobs were tough physically and the rewards were small financially but there was little to be concerned about.
As time passed so did the peace I grew up in. The Kennedy assassinations, Dr. King’s murder, the Vietnam war, gas lines and then Watergate. During this period America’s economy stalled and unemployment shot up. About 10 years of rising job loss and inflation, which became known as Stagflation.
Now I am not an economist, nor do I play one on TV. I couldn’t debate Keynesian demand-stimulus economics verses the supply-side economics movement of the day, that supported what became known as Reaganomics. To the best of my recollection, President Nixon was clamping down on the economy, with oil and gas, price and wage controls. Still things seemed to be getting worse. Under President Carter a man named Paul Volcker was in charge of the Federal Reserve and he basically initiated a contraction of the money supply. Then President Reagan introduced his plan to turn America around and the economy got better.
On looking back at what happened under the Reagan administration I am mystified by what actually took place. One most glaring factors would have to be that the Baby Boomers were at the crux of their impact on the economy. During the Reagan administration years, they were caught up in a flurry of buying (or financing) their share of the American dream. There were more workers/ consumers than at any time in history and I have to wonder if the sheer number of workers, added to the volume of products purchased would equal what appeared to be a booming economy on the surface. No one seemed to notice the dark monster crouching in the shadows. The monster called Debt.
So what did Reaganomics actually change that would have impacted our economy? Taxes!
First the oil windfall tax was removed, the oil companies made more and suddenly the oil crisis was a thing of the past. (Of course so was the 25 cent a gallon fuel) President Reagan’s tax changes were wide and sweeping, shifting the tax burdens from the wealthy (notice this: a tax cut from 70% down to 28% for everyone who made more than $1 million) to an increase in payroll and new investment taxes. This shift in tax focus from individuals earning more than $1 million to the middle class was enacted while our actor from Hollywood Presdient claimed to be”cutting taxes” for everyone. It was masterfully executed. The way I see it, the Baby Boomers were the sheep and Reaganomics collected the wool. The trickle down theory.
Reagan also increased the national debt from $900 million to $2.8 trillion dollars during his reign. This “spend what you don’t have” economic theology permeated our culture and I believe all this leads us to where we are today as a country. The “free enterprise” systems that were in place before the Great Depression, were reinstituted and the effects have been realized on the economy over the last 2-3 years.
One of the greatest impacts on the country credited to the Reagan administration was deregulation. The fact is that deregulation was not a high priority for President Reagan and much of the credit for it could be attributed to the Democratic administrations before and after his presidency. Either way there were some disturbing trends (in my opinion) that started during the early 80’s. Manufacturing was moved abroad and the tax burden was shifted to the average Baby Boomer. Less jobs, more taxes for us and an increase in off shore investments by big corporations.
Having set this background I have to circle back now to Norris Therlow Goss. A quintessential Baby Boomer who perished today working on a three man team, clearing a lot. I googled his name and found about 20 single paragraph stories that say nothing at all about him, only what happened. Everything else is conjecture. My guess is that Mr. Goss is one of many Baby Boomers who have had to stay in the work force, well beyond retirement years, because of our economy. In fact the American Dream is quickly becoming an elusive dream, a fantasy for most.
This leads me to a headline on Bloomberg today that caught my breath. President Obama is going after Tax Cheats and they are all major corporations. It seems that companies like GE, Citi Group, Proctor and Gamble, Hewlett-Packard Co, Intel Corp and Oracle Corp. are all avoiding taxes with offshore entities. It didn’t take much research to find out which companies were in the news for using “tax havens” (aka Financial Privacy Jurisdictions) to hide money off shore in countries like the Cayman Islands. You can find them yourself by searching with the following text “Tax Haven (blank)” on Google or any other search engine and “blank” would be your favorite corporate entity.
An example of what I found: Morgan Stanley has 273 subsidiaries in tax havens, 158 of them in the Caymans!
This is not a new issue. President Kennedy went after these loop holes in 1961. He didn’t have much luck. We will see how effective President Obama can be in his crusade.
I think the “aha!” moment for me today though was the fact that every one of the companies that we the people/ the tax payers bailed out, in the middle of our financial crisis, at the end of the Bush error (not a typo) was listed as taking advantage of these shelters.
The tax cheats were bailed out by the tax payers….
I don’t even want to go down that road mentally right now… to even think that we taxpayers were bailing out corporate tax cheats. No… this leads me to a place I like to call… Agonizesthai.