Robber Baron Redux

Posted: Thursday, December 13, 2012 7:00 pm

By DOUGLAS COHN
and ELEANOR CLIFT
WASHINGTON — At the end of the 19th century, before President Theodore Roosevelt, a Republican, launched his trust-busting policies (1901-09), a handful of very rich men ruled. These Robber Barons thrived on unchecked business monopolies, an absence of federal regulations, and the wanton destruction of labor unions. Later, when unsuccessfully running for president in 1912 as a progressive, Roosevelt’s New Nationalism called for national health insurance, a minimum wage for women, an eight-hour workday, workers’ compensation insurance, women’s suffrage, old age pensions, unemployment insurance, a federal minimum wage, child labor laws, safety standards, an income tax on the wealthy, and other programs. It would take decades, but all of these would become law.
Today, a new breed of Robber Barons has arisen. Their money has brought power and bought legislation, undercutting much of the Roosevelt dream. On balance, they pay a far lower percentage in taxes than their secretaries as billionaire Warren Buffet aptly noted. They are paid incredible sums far out of proportion to their input and astronomically more than their employees. Through like-minded or obedient legislators and judges they have gutted campaign finance laws. They regularly break securities and banking laws, but when caught, extricate themselves by having their corporations pay fines that are made back in profits over a few days or weeks.
Two Robber Baron spectacles are currently in full swing, and their perpetrators make no effort to disguise them, so blatant has become their use of power.
The first has the U.S. House of Representatives refusing to continue the Bush-era tax cuts for 98 percent of the population unless the top two percent of earners are also included. For House Republicans to hold 98 percent of the people hostage for the benefit of our wealthiest citizens is despicable and indefensible.
The second spectacle is the ongoing effort to destroy unions. Even General Douglas MacArthur, himself a conservative Republican, understood the need for collective bargaining when he served as the supreme commander overseeing the reconstruction of Japan following World War II. But his ideological soul mates today do not see it that way. They are union-busters, pushing their agenda with the euphemism, “right to work,” which President Barack Obama rightly explains means “right to work for less money.”
Republican Rick Snyder never held elective office before he was elected governor of Michigan two years ago. He was an accountant and a venture capitalist in his former life, a true member of the two percent. And now he has signed a right-to-work law in that state, the home of the United Auto Workers, a blue state that voted by a large margin for President Obama.
Given his background in the business world and the fact that Michigan has a stubbornly high unemployment rate, Snyder thinks he can create more jobs in his state if manufacturers feel freer to relocate without the worry of being unionized.
Michigan became the 24th state to enact right-to-work legislation, and it raises the specter of a domino effect as states compete with each other to attract new investment. It’s not lost on unions or the business community that many auto plants have re-located to South Carolina, a right-to-work state where there are no concerns about meeting union demands.
And this returns us to Teddy Roosevelt and his New Nationalism. If his progressive agenda had been left up to each state, today some states would have no minimum wage or restraints on child labor. Some would have no Social Security or Medicare. There are clearly laws that belong in the purview of the states, and just as clearly, there are laws that do not. Right-to-work laws are a case in point. Eventually, all states will enact these union-busting laws or they will be unable to attract businesses, and the only result will be lower wages. Some unions have also misused power, and should be brought to account, but the destruction of unions means the end of collective bargaining, and this, as MacArthur foresaw, would be a net negative for the nation. Published in The Messenger 12.13.12