America used to be different. During World War II both blue collar men and the elite served in the military. Everyone lived with rationing: sugar, butter, tires bicycles, automobiles, coffee and a host of other consumer items. The tax rate in 1944 on incomes over $200,000 was raised from 93% to 94%. Hardly anyone complained.
Labor journalist Sam Pizzigati argues that this shared sacrifice from the top down helped define the “Greatest Generation” and pulled the country—including the elites—together in wartime. See Shared Sacrifice, Shared Glory.
Today we are mired in a global financial crisis and two wars on foreign soil, Iraq and Afghanistan. But our prior generation’s shared sacrifice is noticeably absent. What happened?
“Buy an SUV”
Perhaps the defining change in our national character came after 9/11. What was our response to this vicious attack? We did not re-institute mandatory military (or even national) service. We did not raise taxes. We did not demand or undertake dramatic new energy savings initiatives. Instead Americans were encouraged to keep shopping and buy SUVs. In fact, Congress enacted large tax incentives in 2003 to buy SUVs. In effect, we encouraged energy profligacy in light of deadly attacks by Saudi Arabian. Did the always unstable Middle East (with the exception of Israel) suddenly become our greater ally by attacking us?
Greed is Good
The eminent (if fictional) philosopher Gordon Gekko insisted “greed is right, greed works.” See Wall Street. And we have become Mr. Gekko’s devout followers:
- The Petulance of Jamie Dimon – The United Kingdom proposed to tax banker bonuses above 25,000 GBP and require some bankers to defer bonuses for three years. In response, Jamie Dimon, CEO of JP Morgan Chase threatened to cancel a 1.5b GBP project in the Canary Wharf financial complex. See JP Morgan Plans in Doubt.
- The Blindness of Public Sector Unions – Cleveland public employee unions were given an ultimatum to accept a modest 4.17% wage reduction or face large layoffs. See Showdown in Cleveland: Unions Refuse Nominal Pay Cuts.
- The Blindness of Private Sector Unions – Ford Motor Company proposed a concession package along the lines of the UAW agreements with Chrysler and GM management. The UAW rejected these concessions. While Ford has recently reported improved car sales, the company is saddled with debt, pension and health care obligations.See UAW Reject Ford Contract Concessions.
- Record Wall Street Payouts – As I previously chronicled, see What Went Wrong? Disconnecting Effort and Reward, Wall Street firms have reported record bonuses this year. In many cases they will be paying out more than 50% of revenue.
I Want it Now
Like the very spoiled Veruca Salt, our ethos has become: I want it and “I want it now. What’s the matter with those twerps down there?” See Willy Wonka & the Chocolate Factory. Maybe we have become fatalistic and believe the end is nigh. Should we grab as much as possible before the end? Our two intractable wars are remote for most Americans. With no universal draft, these conflicts are being fought by mercenaries. This is virtually unprecedented in our history. Why should we care? We have the NFL playoffs, college bowl games and American Idol to look forward to.
So, as a nation we have come a long way from the Greatest Generation. Will future historians call us the Greediest Generation?
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