So here we are again, in economic LaLa land, waiting for the life raft that will save us from ourselves. The financial news this week is bittersweet for both Wall Street and Main Street. We are told the economy is getting "better," yet the reality experienced on both sides of the Street reveals the truth.
DealBook reports that Wall Street is about to embark on massive layoffs. Credit Suisse, UBS, Morgan Stanley, Goldman Sachs, Bank of America, Deutsche Bank are poised to be among the first to reduce staff. Subprime mortgage traders who against all logic have floated to the top of the heap for the past two years as the rest of us struggled not to sink find their once secure jobs on the line.
So brace yourself- it's going to be a bumpy ride. For those of you cheering for Wall Street's soon-to-be unemployed, you might want to reconsider that. After all, if the financial hardship we have experienced since the mortgage market collapse has taught us anything--it has revealed that we are all connected-economically that is. In New York alone, these thousands of layoffs could hurt small business even more than it already has. Those with high paying jobs are often the customers that local businesses and restaurants rely on to pay the overhead. Income taxes support the public workers whose jobs and benefits are at risk.
Sadly, the era of economic responsibility that the Big O promised has never arrived for corporate America and the largest financial institutions. The big banks, as we have reported at Good-b, have followed an anti-capitalist too-big-to-fail model that leaves their profits their own and their losses ours . It has enraged the pull-yourself-up-by-the bootstraps population on both sides of the Street. It has also put us into a deeper hole than before.
My wonderful research assistant and a 26 year old PhD student, Debbie asked me one day: "Why are we paying for Social Security if we are never going to get it?" I replied, "Because you are paying for your Grandma who can no longer work." Deb who is devoted to her 77 year-old grandmother understood that shared responsibility. Surely, Grandma paid into the program far less than she receives-given the higher cost of living since her employment days. But we understand that this is the Deal : those who can , pay for those who cannot. My generation has long been warned that Social Security and Medicare are endangered species. In the decades it will take us to reach retirement, we expect the system to be ruined by reckless mismanagement. But more than fiscal irresponsibility, it is an ideology at work--the rather primitive socially unconscious idea that we owe nothing to anyone else except for ourselves.
Like most small business owners, I am saddled with tax burdens. I often hear from either the super wealthy or hired hands the virtues of paying taxes. However, those who "love to pay taxes" usually do not represent small business who responsible for double taxation at every turn. Small business shoulders the cost of unemployment more than anyone else through "payroll taxes." Who is legally required to pay for unemployment insurance that they are not personally eligible for? Small business owners. Who pays twice as much for Social Security and Medicare as individuals? Small, medium, and big business. Unlike big business, however, small and medium sized businesses have no offshore tax havens to avoid responsibility. Nor are we able to "issue debt" in the form of corporate bonds borrowed from government supported banks to pay the bills.
Yet despite all of these outrages, I have never resented doing my duty for the older generations that went before me -- those that built the amazing country that we inherited and subsequently severely damaged. They fought wars that had deeper purpose and ended wars that did not; they struggled and worked hard to create a system that has benefited all of us--given us back far more than we deserve or could ever repay. And yet for all of that, we ask those who can no longer work to shoulder the burden for our misdeeds.
What gives, America? Why do we not understand that those who created the economic demise we suffer from should shoulder the greatest financial responsibility? And those that are innocent victims of outrageous fiscal irresponsibility should be spared more hardship in every possible way?
Meanwhile, our mainstream media has paid the bills this past week by focusing on how our twitter-happy lawmakers look in their boxer briefs, almost completely ignoring the issues the public really depends on. Cutting Social Security is a moral outrage and a social and political tragedy--nothing short of the expensive Iraq war debacle that continues to weigh our nation down. Unlike the media, however, our elected officials are paid to serve the public. They should spend less time espousing the fairytale family values they claim to represent, and more time focused on how their constituents are being treated in a land that promises equality, democracy and the right to pursue happiness for all. There are some things like educating our children and caring for our elderly that should be simply non-negotiable.
Monika Mitchell -- Good Business -2011
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