Fat cats bringing us down with them

by J Scott Christianson, Columbia Daily Tribune Columnist

If you ever needed evidence that there are “two Americas” in our country, last week was it: One America that makes its income from investments and another America that makes its income from work.

Only now are most of us starting to understand the realities of our new economy. The demise of manufacturing and the rise of financial services have created a situation where increasingly more money is made by owning other people’s work and owning other people’s debt. The creed of the Michael Douglas character from the movie Wall Street now dominates our economy: “I create nothing. I own.”

“The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around,” said Raymond Dalio of Bridgewater Associates in 2004. “Forty-four percent of all corporate profits in the U.S. come from the financial sector, compared with only 10 percent from the manufacturing sector.” Since 2004 the situation has only gotten worse.

Oddly, investment bankers were surprised last week when the average working American — “Joe Six-Pack,” as Gov. Sarah Palin would say (wink, wink) — didn’t like the idea of coming to the rescue of Wall Street. For some reason Joe didn’t trust that his tax dollars would be spent in a way that would ultimately benefit his family and not just subsidize the exploits of Wall Street.

Gee, why would anyone would be skeptical when Washington passes legislation directly benefiting corporate America while claiming it will benefit working Americans? Perhaps because the money never seems to make its way back to Main Street?

Consider an example from the Clinton years. The Telecommunications Act of 1996 deregulated the telecommunications industry — providing billions in benefits — to bring broadband access to every corner of America. It was supposed to have a ripple effect on small business growth, education and community development. Instead of investing in new infrastructure, the telecommunications companies pocketed most of the money, and the United States now ranks somewhere around 20th worldwide in terms of broadband access. Asked what we should do to regain our lead in telecommunications, the big telecom companies know what they need: more deregulation and government handouts.

Even when government steps in to regulate, it does so to protect corporate America from the…