The Oligarchic Rule, Financial Parasites, and Fordism

Get this: Amazon made a profit of $11,200,000,000 in 2018. How much are they going to pay in federal income taxes? Nothing! Rien! Nada! Anneyo!

This is one of the most pathetic and duplicitous activities that has come to dominate much of our present age. The people who are making billions upon billions of dollars want to free themselves from any economic  responsibility, but if you are trying to put food on the table, well, too bad that you got screwed with more taxes! Perhaps we need another person who will drive the money changers out of the temple because the money changers themselves have astronomically used all kinds of deceits and malicious activities to cheat the system.

So when Trump promised that his tax plan would give most Americans a tax cut, he was inadvertently talking about the rich and powerful, not the average American who was still struggling to raise a family and make ends meet. Listen to this:

“Many in the middle class have been shocked to find that instead of the nice little chunk of change they were expecting with their return, they actually owe money to Uncle Sam. What’s the reason for this financial switcheroo? It stems from President Trump’s tax reform, which was passed in 2017 and was touted by Trump and the GOP as a win for the middle class.

“However, with the new tax system now in place, Americans are discovering that most of the tax relief from the bill is actually being experienced by corporations. Meanwhile, many people are seeing an increase in taxes due to the bill eliminating many of the deductions that were used by middle-class families in order to lower the amount of taxes they were required to pay. Most notably, the tax reform placed a cap on deductions for taxes on both state and local levels.

“Unsurprisingly, people have not been happy to discover that what they expected to be a decrease in taxes paid is actually an increase. Those who had been supporters of Trump are especially infuriated, as many were under the assumption that he would provide financial relief for middle-class families, something that he consistently promised during his Presidential campaign. Many have even taken their anger online, with #GOPTaxSCAMStories trending on Twitter as more and more members of the middle-class express their feelings of betrayal towards Trump and Republicans.”

Dennis Jordan lamented:

“I am a Republican voter. I just did our taxes. The @GOP tax bill cost my family THOUSANDS of dollars this year on our return due to changes, thereby hitting us with the LARGEST tax increase of our lives. We are middle-class homeowners, and you raised our taxes. Infuriating!”

Similarly, Matt Davis regretted:

“@realDonaldTrump I trusted and voted for you, now, screwed by you. I fall JUST above a tax bracket, I don’t get the 5000 return I’ve gotten the last 3 years. Money my family depends on to start us over. I served my country honorably. I will not make the same mistake twice.” David Hoffman said: “Last year I got a tax refund. This year, with unchanged salary, I owe $1,300. I’m middle class. Yet the wealthy got huge cuts. #ThanksRepublicans.”

Joel Serbin declared:

“@POTUS thank you for screwing the middle class with your tax reform. I have never in my life, I’m 49 years old, had to pay into the IRS until this year. We have a combined income of 150,000. The middle class voted for you. I will not make the same mistake twice.”

Was Trump’s move really a surprise? Not really. Trump passed his tax bill plan in 2017, and the oligarchs couldn’t be happier. If you make less than $100,000, you more than likely will see a rise on your taxes, but if you make more than that, then you don’t have to worry—you will pay less taxes, and perhaps no taxes at all.

Trump obviously knows that the average American doesn’t make $100,000. In fact, “approximately 80 percent of American households” do not even come close to that figure.[5] So the only people Trump was actually representing were the oligarchs and the money changers, the very people who always end up destroying economic progress through their usurious contracts. As historian Robert S. McElvaine put it then:

“The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us.

“The [Republican] party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.

“In 1926, Calvin Coolidge’s treasury secretary, Andrew Mellon, one of the world’s richest men, pushed through a massive tax cut that would substantially contribute to the causes of the Great Depression. Republican Sen. George Norris of Nebraska said that Mellon himself would reap from the tax bill ‘a larger personal reduction [in taxes] than the aggregate of practically all the taxpayers in the state of Nebraska.’ The same is true now of Donald Trump, the Koch Brothers, Sheldon Adelson and other fabulously rich people.”[6]

McElvaine moved on to add Republicans have already tried deregulation, and it failed miserably. Their solution? Well, they “deny its failure and try it again. And again. And again.”[7] Quiggin would call that zombie economics. This diabolical activity again only works for the rich and powerful, and the average guy will get screwed again. Pay close attention:

“Since the Senate passed its version of the tax bill on December 2, 29 companies have announced $70.2 billion in stock buybacks, a maneuver that uses company cash to buy its own shares, which then drives up the price of those shares, rewarding major investors and executives whose compensation is directly tied to the company’s stock price.”

The central issue is that the oligarchs always try to play dice with the economy, a pernicious enterprise which goes all the way back to the Ciompi Rebellion which took place in Florence in 1378.[8] The end result has always been the same: whenever the oligarchs suppress the masses with heavy taxes, whenever the average person cannot support his family, then insurrections ensue.[9] As our dear friend E. Michael Jones has meticulously documented in his 1400-page tome Barren Metal: A History of Capitalism as the Conflict Between Labor and Usury, the oligarchs always try to cheat labor out of the workers. As he puts it,

“From the time of Roger Bacon to the Medicis to John Dee to Isaac Newton to George Soros in the present, alchemy [another word for usurious enterprise in the economic sphere] has exerted its unique attraction over the mind of man who is interested in getting out from under the necessity of labor as the road to wealth.”[10]

The oligarchs don’t really want to pay taxes, but the government and the oligarchs want to bury the average worker beneath the avalanche of taxes. This is contrary to true economic businesses. The only person who understood this in recent history was Henry Ford.

Ford knew that the national economy cannot grow if the average person cannot afford to put food on the table, therefore Ford did what was unheard of in 1914: he paid his workers $5 a day, when they were being paid less than $3 elsewhere. What was the result? Economic growth!

“This is not to suggest that Ford single-handedly created the American middle class. But he was one of the first business leaders to articulate what economists call ‘the virtuous circle of growth’: well-paid workers generating consumer demand that in turn promotes business expansion and hiring. Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits in contracts like the 1950 ‘Treaty of Detroit’ between General Motors and the United Auto Workers.

“Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today… From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation.”[11]

The working class and the average American loved Ford precisely because his company allowed them to build nuclear families, which are the salt of any nation. Ford essentially helped create the baby boomers. “The opening of a Ford factory in Detroit during the 1900s resulted in a population boom as workers and their families migrated to grab the available job opportunities.” The financial editor at the New York Times thought that Ford was out of his mind when he was paying his workers enough money to support their families. “He’s crazy, isn’t he? Don’t you think he’s crazy?”[12]

Ford also reduced the work day from 9 hours to 8 hours, “a significant drop from the 60-hour work week that was the standard in American manufacturing.”[13] This also allowed him to have the best workers. Ford said: “If the floor sweeper’s heart is in his job he can save us five dollars a day by picking up small tools instead of sweeping them out.”[14]

Ford’s formula was straightforward: keep wages high and prices low, then you will eventually have prosperous workers, prosperous businesses, and a prosperous nation. Ford continued:

“The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”[15]

Was Ford right? Well, you be the judge: “In 1914, the company sold 308,000 of its Model Ts—more than all other carmakers combined. By 1915, sales had climbed to 501,000. By 1920, Ford was selling a million cars a year.”[16]

Ford concluded:

“We increased the buying power of our own people, and they increased the buying power of other people, and so on and on. It is this thought of enlarging buying power by paying high wages and selling at low prices that is behind the prosperity of this country.”[17]

The Saturday Evening Post reported, “In 1919, Ford raised his minimum wage again, this time to $6.00 a day. Again, the wage hike produced higher production numbers.”[18]

Ford obviously understood the dark vision of the oligarchs of his day when he said: “We believe in making 20,000 men prosperous and contended rather than follow the plan of making a few slave drivers in our establishment multimillionaires.”[19]

The wage of the average worker, said Ford in his autobiography, “determines the prosperity of the country.”[20] He called the average worker “partners.” “It is not usual to speak of an employee as a partner,” he wrote, “and yet what else is he?”[21] He moved on to say:

“The moment a man calls for assistance in his business—even though the assistant be but a boy—that moment he has taken a partner…No man is independent as long as he has to depend on another man to help him. It is a reciprocal relation—the boss is the partner of his worker, the worker is partner of his boss. And such being the case, it is useless for one group or the other to assume that it is the one indispensable unit…

“It is foolish for Capital or for Labor to think of themselves as groups. They are partners. When they pull and haul against each other—they simply injure the organization in which they are partners and from which both draw support. It ought to be the employer’s ambition, as leader, to pay better wages than any similar line of business, and it ought to be the workman’s ambition to make this possible.”[22]

That was devastating to the oligarchs and usurers, who saw their workers as expendables or subjects to be used and reused at will. Of course, there are limits to wages, and Ford understood that concept. But Ford was against employers oppressing or abusing their employees, and vice versa:

“The employer can gain nothing by looking over the employees and asking himself, ‘How little can I get them to take?’ Nor the employee by glaring back and asking, ‘How much can I force him to give?’ Eventually both will have to turn to the business and ask, ‘How can this industry be made safe and profitable, so that it will be able to provide a sure and comfortable living for all of us?’”[23]

Contrast Ford’s workable way of doing business to our day, where companies like Goldman Sachs treat their customers as “muppets,”[24] and where oligarchs like Jeff Bezos pay no federal tax, despite the fact that they have amassed billions of dollars.[25]

The solution? Very simple.

The average person is not really coveting the wealth of the oligarchs. What the average person is asking is A LIVING WAGE. A working person has to be able to support his family, otherwise the family itself will be in ruins. And when the family is destroyed, then the nation will eventually crumble. It’s just that simple. This is not socialism or communism. Ford was not implementing socialism when he paid his working a living wage. In fact, Ford was against socialism and subversive movements.

If the government doesn’t understand that simple formula, then they can kiss a prosperous economy goodbye. If this seems farfetched, then I would highly recommend economist Michael Hudson’s Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.[26]

• [1] For a historical study on this, see E. Michael Jones, Barren Metal: A History of Capitalism as the Conflict Between Labor and Usury (South Bend: Fidelity Press, 2014).
• [2] Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Picador, 2007).
• [3] John Quiggin, Zombie Economics: How Dead Ideas Still Walk among Us (Princeton: Princeton University Press, 2010).
• [4] See Paul Mason, “The end of capitalism has begun,” Guardian, July 17, 2015.
• [5] Robert S. McElvaine, “I’m a Depression historian. The GOP tax bill is straight out of 1929,” Washington Post, November 30, 2017.
• [6] Ibid.
• [7] Ibid.
• [8] For a historical study on this, see E. Michael Jones, Barren Metal: A History of Capitalism as the Conflict Between Labor and Usury (South Bend: Fidelity Press, 2014).
• [9] See Samuel K. Cohn Jr., Creating the Florentine State: Peasants and Rebellion, 1348-1434 (Cambridge: Cambridge University Press, 1999); Michel Mollat and Philippe Wolff, Popular Revolutions of the Late Middle Ages (London: Allen & Unwin, 1973).
• [10] Jones, Barren Metal, 855.
• [11] Hedrick Smith, “When Capitalists Cared,” NY Times, September 2, 2012.
• [12] Jeff Nilsson, “Why Did Henry Ford Double His Minimum Wage?,” Saturday Evening Post, January 3, 2014.
• [13] Ibid.
• [14] Ibid.
• [15] Ibid.
• [16] Ibid.
• [17] Ibid.
• [18] Ibid.
• [19] Quoted in Richard Bak, Henry and Edsel: The Creation of the Ford Empire (Hoboken, NJ: John Wiley & Sons, 2003), 64.
• [20] Henry Ford, My Life and Work (Grand Rapids, MI: Credo Four Publishing, 2016) kindle edition.
• [21] Ibid.
• [22] Ibid.
• [23] Ibid.
• [24] Greg Smith, “Why I Am Leaving Goldman Sachs,” NY Times, March 14, 2012.
• [25] Joel Shannon, “Amazon pays no federal income tax for 2018, despite soaring profits, report says,” USA Today, February 15, 2019.
• [26] Michael Hudson, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (Petrolia, CA: CounterPunch Books, 2015).