Integrity

The pundits say Greg Smith who left Goldman Sax in a very public way will have trouble getting another job on Wall Street. If I were in a position to hire him for a Wall Street firm, I'd be offering him a job right now. Following is part of the op-ed appearing in the New York Times.
http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=1&ref=business
"It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief."

He is the kind of person Wall Street needs.

Raise My Taxes, Please!

Dear Senator Snowe,
I just read the "Snowe Report" and I agree that the LIHEAP (Low Income Energy Assistance Program) should be funded at a higher rate than in the budget and that deficit reduction is important though the juxtaposition of these two statements in your report is a bit ironic, don't you think? Every spending program (like LIHEAP) is important to some people somewhere which is why spending cuts are so difficult.
There is one thing that the majority of people all across the country and in Maine agree upon as a deficit reduction measure yet you don't mention it. Why? Why don't you support raising the income tax on those of us who are doing well? The answer I keep hearing is that it will kill jobs, that the wealthy who create jobs will not bother to make more money and thus create more jobs if they are taxed too much. That is a bogus answer. We have had tremendous job losses under the low tax on the wealthy for 8 years running which should prove that argument to be spurious.
Did you know that the highest income tax bracket was over 90% throughout the decade of the 50s and that was a time when a family could be raised on one income. Perhaps the reason middle class people could get by on one income in that decade was because there was little incentive for entrepreneurs, business owners, corporate boards, bankers and the like to make gross amounts of money so they paid better wages and charged less for their products and services. That explanation, at least, makes a lot more sense than saying that taxing incomes over $250,000 will stifle job creation.

Wall Street Bonuses

“What to do about those gross Wall Street bonuses?” politicians, “experts” and pundits bewail. They debate how best to regulate such things. Please. The answer is simple. Bring back the 91% income tax bracket.

Those of us who remember the 50s do so with fondness. It wasn’t all “Life with Father”, “Leave it to Beaver” and “Ozzy and Harriet” but it was a time when most mothers concentrated on the most important jobs like raising a family and managing a household. She was able to do that because one income supported the American Dream. Why did employers pay better then? One answer might be that there was little incentive to make gobs of money as the highest tax bracket was 91%. In 1954 income below $75,000 (today’s dollars) was taxed at 20%. Someone earning $1 million (today’s dollars) was in the 62% tax bracket. Anyone earning over $7.5 million paid 91% of every dollar over that amount in taxes.

Consider the fights between millionaire sports stars and millionaire sports team owners over multimillion dollar contracts. They are fighting over figures because in actual money it is too much for any individual to spend reasonably. I would put a cap on individual income. If you make over $2 million a year, you have to either give it away or give it to the IRS. Now the choice is either to make less than $2 million or to give it away which is a good motive, rather than greed, for making money. The sports stars will be easier to negotiate with. The team owners will either be generous to charities or, more likely, they will pay their employees more and charge less for tickets.

The 1954 tax brackets were essentially the same from 1951 through 1963. Want to guess what years the highest tax bracket was lowest? Other than the first three years of income tax in the US the lowest high tax bracket was 24%. Come on, guess the year. It was the year when greed ran amok. That it! 1929! The rate was 25% for the four years leading up to the Great Depression.

One more question in this quiz. When was the second lowest? It was, thanks to President Reagan, 1988-90 and has remained low ushering in the Great Recession.

I’m not talking about wealth redistribution. I’m talking about people making more money than they know what to do with and in the process bringing down a society that would be much better off if families could pursue the American Dream on the income of one wage-earner. I’m really just talking about family values as opposed to greed rules.