I met an old friend for coffee Sunday and we had a heated discussion on the bailout of financial institutions by the taxpayers in this so-called Capitalistic society. I always argue that we really don’t live under the banner of Capitalism. Instead, in a large part, we live by some of the ten basic doctrines of the Communist Manifesto published by Karl Marx in 1848. One of Marx’s proposals was a heavy progressive or graduated income tax. And that is exactly what we have today.
In 1862, fifteen years after Marx’s publication, the democratic United States Government enacted the first income tax law to finance the civil war. Inheritance tax also made it debated debut in the same year.
The 1862 act also established the position for a commissioner of internal revenue. The commissioner had the power to levy and collect taxes and to seize property and income through prosecution. Sound familiar? In 1913, the 13th Amendment to the Constitution made income tax permanent. In 1943 withholding income tax was enacted, shoving the final dagger in the heart of the working class American citizens.
Marx knew how to deal with rebels and enemies of the state. His manifesto recommends the confiscation of property held by rebels. Today, we freeze bank accounts and seize property owned by foreign governments or terrorist who threaten to rebel against us.
We followed the example of Marx’s ideas on education and child labor. Thanks to Horace Mann, the first Secretary of the Board of Education for Massachusetts, the public funding for a free elementary education began. Mann started the “common school” movement and by 1870, all the states provided free elementary education for our children enrolled in k-8.
While the socialist Marx and his Communist party argued to protect children from being exploited in factories the U.S. Demanded children enter the work force. As late as 1852, the City of Philadelphia still mandated that all children had to work.
It took the great depression, years after Marx wrote his manifesto, for the American government to take his advise. During that time adults were willing to work for the same wages as children. So in 1938, President Franklin D. Roosevelt signed the Fair Labor Standards act. It didn’t end all the child labor practices but it did limit many forms of child labor abuses.
Marx believed in the centralization of credit by means of a national bank with state capitol and an exclusive monopoly. Heading the philosophy of Marx , our Congress passed the National Bank Act in 1864. It established a national currency and a state security holding body to handle the monetary policy of the government. It also authorized the Treasury Dept. To examine and regulate the nationally-charted branches of the central bank. Now the central banks and the treasury department are using at least a $trillion of taxpayers money to provide corporate welfare for mortgage and financial companies.
We should have seen this coming. Back in 1979 Chrysler was almost bankrupt. The U.S. Government loaned Chrysler a reported $1.2 billion in loan guarantees. By July in 1983 chairman Lee Iacocca announced that Chrysler would pay off the debt and it didn’t cost the taxpayer anything. He also stated that he would push for more government intervention in American business and industry. Quoting a heritage foundation article, Iacocca said federal loan guarantees will be the key to American corporate success in the years ahead. It seems Iacocca was 25 years ahead of the times.
On September 7 of this year, the Federal Government officially took control of Fannie Mae and Freddie mac, giving them a monopoly in the mortgage business. Last Tuesday the government injected over $85 billion into AIG, one of the largest insurance companies in the world. And let’s not forget the Bear Stearns deal that will cost the taxpayer $29 billion. And there is more to come.
Following Iacocca’s lead, the auto manufactures are asking the taxpayers for a $50 billion loan to bail them out because they can’t compete in the so-called free market of capitalism. And there are more bailouts on the way.
The treasury department recently spent over $150 billion giving “free money” to taxpayers in bush’s stimulus package because capitalism doesn’t work for the working class either.
So, have we seen the last of the hypocrisy and failure of our free market-capitalist society. Maybe.
Dan Seiver, finance professor at San Diego State uUniversity said, “Perhaps this idea that unfettered Capitalism is the way to go has finally been put to rest.”
My friend and I finished our coffee. On the way to the car he said “David, you make some good points regarding Karl Marx and I still don’t totally agree with you. But if I had to choose between Karl Marx and Bush as president, I would choose Marx. It isn’t Marx’ or Socialism we should be concerned about; it’s Bush. Bush has failed in his foreign policy, economic strategy and social reform. We don’t have to worry about terrorists, the Russians, the Iranians or anyone else destroying our great country or our way of life. Bush has done it for them.”
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