After I saw “The Muppets,” I wondered how long it would take for someone to claim the film was some sort of thinly veiled liberal brainwashing scheme.
After all, the story is based on that classic trope of the ruthless businessman plotting to swipe land out from under the protagonists’ feet so he can drill for oil — and in this case, the cartoonish villain (played by Chris Cooper) is named “Tex Richman.” Hey, the Muppets have never been about subtlety.
Eric Bolling, host of Fox Business’ “Follow the Money,” gladly took up the challenge and last week he and his guests blasted the movie for being, among other things, a flagrantly liberal attempt at indoctrinating children to the left’s anti-capitalist agenda.
This is just the latest accusation — mostly from the right — of people trying to trash capitalism, but, like the Muppets, the people spouting this “Oh please, won’t someone think of the oligarchs?” sentiment are eschewing nuance and painting the issue with a broad brush. What they’re failing to understand is that few people are railing against capitalism; they are fighting BAD capitalism.
For starters, let’s all remind ourselves exactly what the capitalist model is. In the most general sense, capitalism revolves around the concept of private ownership of a for-profit business enterprise in a competitive marketplace. The United States is technically a social market economy, wherein business operates mostly within the much-ballyhooed “free market economy” and experiences minimal government involvement; supply and demand, rather than the government, dictates price, but the government intervenes in matters pertaining to regulation, monopolization, taxpayer-funded security net programs such as unemployment, and labor rights.
In a capitalist model, there is a working class: a group of people who are paid by those who privately own a business to produce the goods or deliver the services. The working class is a necessary element; big businesses cannot operate without them, and — let’s all accept this as a hard truth — not everyone in the world has what it takes to become self-employed, or even the proprietor of a very small business, so their only chance to earn a living is by playing drone to someone else’s queen bee.
Those who truly despise capitalist economies will cry that those in power are simply exploiting the rank-and-file, as opposed to, say, a socialist model*, wherein the working class shares in the fruits of the labor, which they also share. But, as mentioned above, there are many people — average Americans, if you will — who lack the intellect, creativity, motivation, business savvy, and/or desire to be completely financially self-sufficient and (I make this argument assuming that a miraculous windfall such as winning the Lottery or inheriting a bundle from a long-lost uncle is not a probability) must earn their living through the sweat of their brow.
(* = Please note that I am talking about a REAL socialist economic model, not the disingenuous interpretation of socialism you hear about from arch-conservatives, wherein the government takes money from those who generate capital and gives it to those who contribute nothing back; I am talking about a true “all for one, one for all” model: everyone contributes, and everyone benefits proportionately to their individual effort.)
Generally speaking, this is a fine model, in part because it provides everyone with an opportunity to participate as something other than a worker bee — and many people take advantage of that opportunity, and successfully so. The US Small Business Administration found that of the approximately 27 million businesses operating in the U.S., 99.9 percent have fewer than 500 employees, 98 percent have fewer than 100 employees, 89 percent have fewer than 20, 78 percent have fewer than 10, and 61 percent have fewer than five — and, collectively, community-based small businesses have generated 64 percent of all new jobs created within the past 15 years.
That, people, is good capitalism. That is capitalism that works (pun intended). It creates jobs, puts money in people’s pockets that they can spend on the goods and services — necessary and discretionary — which in turn leads to more job creation. It’s a positive self-perpetuating cycle.
That is not the kind of capitalism that people hate.
No, hate-worthy capitalism is the kind that consolidates the capital generated by the for-profit enterprise in the hands of a precious few at the expenses of the workers they need to support the business, through their efforts or through their spending.
I’ll pick on Exxon-Mobil for my example. CEO Rex Tillerson earned in 2010 $29 million in total compensation: $2.2 million in straight salary, a $3.4 million bonus, and $15.5 million in stock awards. The company’s revenue for that year was $383 billion, $30.46 billion of which was straight profit.
Since 2007, the corporation has added 2,800 jobs — this following a decade of job cuts totaling 126,100 — but the company has declined to clarify to anyone how many of these jobs were created in the United States (and I am counting only direct, sustained employment, not any temporary construction jobs created by the company opening up new facilities).
According to SalaryList.com, Exxon-Mobil pays as little as $41,838 and as much as $270,000 for non-executives, with $96,900 the median annual salary. For fun, I figured out how many new jobs at the median salary could be created with the company’s profit margin for 2010: 314,344.
Obviously, a company in not going to invest ALL its profit on its human resources, but if Exxon-Mobil invested just 10 percent of its profit in U.S. job creation — they are supposed to be job creators, after all — that’s still 31,434 new jobs.
For the sake of debate, let’s leave the profit margin out of this for a second: even if the company dedicated only some of the money is spends on its CEO’s salary, say everything beyond his base pay, that’s 268 jobs created in one year.
I know, you might argue, “So what? Who cares about 268 new jobs when there are 13.3 million people out of work?” I say you have to start somewhere, and — speaking, I admit, a bit idealistically — if all 2,700 companies employing more than 500 people created 268 jobs, that’s 723,600 people off the unemployment lines — people who will no longer be relying on taxpayer-supported government safety next programs, will pay taxes, and will spend money in the economy that will come back around to create more jobs and move even more people off the government dole and into the position of consumer and taxpayer.
But that is not the kind of capitalism we’re seeing from our so-called “job creators.” We’re not seeing major corporations, many of which benefit from very lucrative tax breaks while reaping record profits, create jobs. We’re seeing them pad top executives’ and investors’ personal bank accounts, as if making more millionaires will lead as directly and as efficiently to job creation as a straightforward investment in human capital would.
That is the kind of capitalism that people are hating on, the “trickle-down economy”-based capitalism that believes the way to bolster the economy is from the top down, not the bottom up, as if the poor and middle class were less important to the formula than those who are, so we’re told, going to shower their largesse upon the “99 percent” and save the nation’s foundering economy — as long as they keep getting tax breaks they, frankly, don’t need.
The rich do have the power to be job creators. All they have to do to release that awesome power is relinquish some of the money they now hoard to the working class — and by extension, the country — that needs it. Socialism? No; a smart investment in the future of the United States…perhaps the best investment they could ever make.
