Why Capitalism Thrives–and how it self-destructs

The Most Important Two-Minute Video for Election 2020

If you ever wondered why even union members have voted for anti-worker Republicans, check out the most important two-minutes of video that voters should see and understand.

The video demonstrates:

  • How conservatives can use half-truths to tell whole lies,
  • Why general economic principles will not work if government does not implement them properly, and, in general,
  • How conservatives have been able to con workers into voting against their own best interests.

The two worldly, sincere, well-dressed, polished gentlemen you saw were either deliberate liars and hyporcrites, or they’d been conned by deliberate liars and hypocrites.

Every voter should see and understand this video. It clearly demonstrates how conservatives have deliberately turned economic absurdities into “truths” that are generally accepted by the average voter today.

It was part of a productivity improvement program that was developed by General Motors and The American Productivity Institute in the 1970s. GM documented multimillions of dollars of savings as a result of it, and it was made commercially available to other corporations and businesses. It was probably the most popular productivity improvement program during a two-year period, and was seen by millions of union and nonunion employees.

Democrats must do a much better job of educating the public about:

  1. The real reasons America’s economy was the best in the world, until Republicans gained control of the government, and
  2. Exactly how (propaganda techniques) Republicans are deliberately lying to the public about economic and social issues, and
  3. What those specific issues are.

The key to winning elections: educate the public about key economic issues that affect their daily lives.

The two narrators here made what seemed to be purely logical assertions about how working-class Americans improved their standard of living. Actually, they demonstrate how conservatives deliberately confuse factors that allow something to happen, with factors that cause them to happen.

This deliberate confusion between causing economic phenomena to happen, with allowing them to happen, is the foundation of the conservative attacks on common sense.

Economic Absurdities vs. Reality

Briefly, consider what the narrator said, with the historical reality:

“You know, the reason we have jobs in this country is because of high productivity. The reason we have fewer work hours than we had before is because of higher productivity. Why do we work only a 40-hour week now when we used to work 65? Because of productivity. Absolutely.”

Flat-out wrong! The 40-hour workweek had absolutely nothing to do with worker productivity. It was the direct result of the 1938 Fair Labor Standards Act, which required employers to pay time-and-a-half if they worked over 40 hours. Overnight, the 6-day 60-hour workweek went to 5-days, 40-hours. It also dictated that children under 16 could no longer work full-time jobs, and the minimum wage would be 29 cents an hour. 

Since it was federal legislation, it applied to all states. To a great extent corporations were then limited in their ability to pit states against each other by offering lower wages and worse working conditions.

Today’s Republicans would love to overturn the FSLA legislation. Most workers not covered by the act now work much more than 40 hours a week, and are lucky if they have decent health care and keep up with inflation.

“Look at the other countries that don’t have high productivity. They work much longer hours. Productivity got us there where we are.”

Sheer nonsense. Workers in other countries work very long hours, get low wages, and have terrible working conditions because their governments’ policies give them no protections from ruthless employer demands. Their governments often support employers who threaten, torture and even murder labor union organizers. Worker productivity has nothing to do with how much workers share corporate profits with the top executive and their investors.

“Controls are not the answer. Government policies, generally speaking, while some of them feed inflation and some of them can help, that isn’t the place to look for the answer.”

A direct opposite of reality. Government is the answer. When investors abandon the market, for whatever reason, government has to step in and pay unemployed workers to do public service work. When workers have money to spend, investors come out of the woodwork to invest in new or expanding businesses, as happened in the New Deal. 

Without government setting minimum standards for work conditions and worker incomes during the New Deal, corporate greed and materialism would have dominated our economy the same way it is dominating us today.

“The place to look for the answer is right on the job, every person’s job, and if we do that cumulatively, in a better way, we can beat inflation.”

A total distortion of reality. To begin with, the Federal Reserve’s management of monetary policy affects inflation more than worker productivity. If it floods the market with money, banks have more money to finance investors and businesses. Our own history has demonstrated that rich people and investors benefit far more than workers from this kind of government largesse. As the wealthy buy more products and services, they drive up prices for workers whose increases in income don’t keep pace with inflation.

Far more important, however, is today’s power-to-negotiate differential between employer and worker. The increase in worker productivity literally exploded between 1993 and 2019, which actually resulted in stagnant or low increases in wages.

Worker productivity became totally irrelevant once employers realized that NAFTA and later trade deals gave them the power—without penalties—to move operations to lower wage countries. 

In fact, employers were already moving from unionized states to right-to-work-for-less states because of the 1947 Taft-Hartley law. Whereas NAFTA gave corporations the power to pit nations against each other, Taft-Hartley gave them the power to pit states against each other.

Now, for the serious minded, the rest of the story:

In 1938 the unemployment rate was 19.9%, children under 16 were working full-time jobs in factories, and many workers were making less than 29 cents and hour. Government leaders felt that the rich and powerful were taking too much of worker productivity for themselves and needed to share more of their profit with them.

So, the Fair Labor Standards Act dictated that workers should get time-and-a-half for working over 40 hours a week, children under 16 shouldn’t be working full-time non-farm jobs (especially when millions of adults were walking the streets in search of employment), and all workers should make a minimum wage of at least 29 cents per hour. And thus, the 40-hour workweek became the American standard.

Here’s where the “allow” vs. “cause” issue again becomes important. The cause of the 40-hour workweek was government action. Government action was able to overcome investor and corporate greed, and conditions for working-class Americans dramatically improved.

Technological innovations and increased worker productivity then allowed the entire economy to progressively get better for everyone, investors, consumers and workers alike.

By 1941, the unemployment rate dramatically dropped to 1.5%. Those who say that WWII was the cause are again deliberately confusing cause with allow. The fact that we built tens of thousands of airplanes, tanks, shipping vessels, Jeeps, and so on, and sent them overseas to get blown up is NOT what caused the end of the depression.

What the war did was it allowed President Roosevelt and a liberal Congress to pass legislation which raised the top income tax on our wealthiest citizens to 88%, and to pay millions of formerly unemployed persons for service in the military or their work in the defense industry and its supporting businesses. Much more money in the hands of formerly poor and middle-class Americans is what caused our passage out of the depression.

When consumers have money, investors will come out of the woodwork to get it. If this period in our history demonstrates anything, it’s that the best way to stimulate an economy is to cut taxes and increase incomes of the poor and middle-class, not increase incomes and tax cuts for the ultra wealthy.

(Unfortunately, the only time Republicans will allow Congress to raise taxes on the rich is when it promises to declare a war on someone, and to blow things up. Actually, although that was true in 1941, it seems to be no longer true, as evidenced by their refusal to finance our three current wars with taxes on those who are profiting most from it.)

Democratic capitalism vs. aristocracy

Let’s face it. Republicans don’t really believe in democratic capitalism. They believe in aristocracy, and, since the public can’t be trusted to make the right decisions, they think it’s perfectly moral for the aristocracy to lie to the public in order to control the economy.

From the administrations of Louis XV of France prior to the French Revolution, to President Hoover prior to the great depression, to President Roosevelt prior to the greatest economic recovery in our history—a government’s policies always determine how classes of its citizens share the productivity of the people who actually provide the products and services of society.

And right now, politicians like Mick Mulvaney are creating government policies that greatly benefit the rich and powerful, at the direct expense of the poor and powerless.

If you want to watch a video of Chuck Kelly analyzing this video, go here: Chuck’s Analysis

And if you want to read the verbatim text of the tv dialogue you just heard, click here: videotape dialogue.

The biased conservative
financial press

Read what America's five most prestigious financial publications, The Wall Street Journal, Forbes, Fortune, Barron’s and Bloomberg Business Week have been reporting over the years.

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The most Important
Two-Minute Video...

...for election 2020. Voters have been thoroughly conned into believing absurd economic myths. This video was instrumental in convincing even unionized workers into voting for Republicans and against their own best interests.

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