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As you will have read in my book Titanic Nation: How To Avoid Icebergs: The Case for Fundamental Change In the American Way Of Life, matters started to go drastically wrong, as far as most Americans were concerned, from roughly 1972. From that period, for a variety of reasons outlined in my book, American business culture abandoned the concept that business should harbor some degree of concern for all the stakeholders (employees, customers, suppliers, the community and the National Interest), and focused entirely on maximizing quarterly shareholder return to the exclusion of all else.
Well, as you might expect, as U.S. corporate interests squeezed one tax concession after another from a largely bought congress, the corporate contribution to our tax base declined – as is graphically shown in the following chart. Add in the dramatic increase in Social Insurance and the results were predictable. The Rich and Corporate Interests got richer and the position of the Middle Class deteriorated. Other factors contributing to the decline of the Middle Class are covered in my book and include: the suppression of unions; the relative decline of wages; a decrease in pension availability; a squeezing of vacation time; competition from both illegal and legally imported labor; outsourcing; increases in financial charges, professional fees, educational costs and health insurance.
The impressive thing is how all this was done while keeping the vast majority of Americans from really understanding what was going on. It speaks volumes to the effectiveness of propaganda by the forces who understand it best – business interests. But it's a sad thing because it adds up to a society where a small minority get richer while most lose ground. Is this inevitable because of global competition? The short answer is: "No," and it is easily proven by looking at what is going on elsewhere. However, most Americans are alarmingly ignorant of alternatives to the American Way of Life, and to the fact that there are highly effective free-enterprise alternatives to the American Business Model.
The source of this data is www.deptofnumbers.com and government sources.
U.S. Tax Revenue as a Fraction of GDP by Component.
Farewell for the moment. Write soon. I miss your wit and your company.