Pre-Boomer Musings

A century ago, companies such as Standard Oil and American Tobacco as well as giant trusts (a combination of companies such as meat packers) used whatever means necessary to reduce competition and control prices in certain industries to gain greater market share and ultimately increase their respective profits.  City governments were corrupt, and business easily bought off the greedy politicians while the federal government did nothing to control commerce.  This led to strong populist reactions, the formation of labor unions and the rise of Progressive politics.

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The movement appealed to those in the middle class who wanted to improve conditions for the working citizens.  The concept crossed over party lines, with Theodore Roosevelt and Woodrow Wilson both espousing Progressive ideas.  This resulted in trust-breaking, child labor laws, improved working conditions, inception of food inspection, better education and women’s rights to name a few. 

Dirty politics at the local level meant many of the municipal jobs were filled through patronage, a system of rewarding those who helped elect or did favors for the politicians in power.  So Progressives fought for civil service reform, secret balloting and direct primaries, which allowed the people to vote for the party candidates rather than having them selected by party bosses in smoke-filled rooms.  This leveled the playing field for average Americans, but the movement didn’t stop there.

Progressives pushed for greater involvement by the federal government.  This produced the Pure Food and Drug Law, Farm reform, the Federal Reserve Act to establish the banking system that is in place today and the Anti-trust Act.  It also gave Congress the right to tax what people earned, which is the Income Tax.   Progressives wanted to redistribute wealth; and as the federal government began to collect taxes, its thirst for spending made Washington politicians willing allies.  Over the years, the people’s effort was swallowed up by governmental bureaucracy and became a top down philosophy.

Today, big companies such as General Motors and AIG Insurance are deemed to big to fail, so the government bailed them out instead of letting them fail like other poorly run companies.  In addition, big financial institutions are bigger, because the government loaned money to the major banks at the expense of the regional and local ones.  So, Main Street and individuals suffer while Wall Street is protected by the government.

Washington is pushing for financial reform; but both the federal government and Wall Street have gotten to the point where they need each other, no matter what they tell the public.  Unlike a hundred or so years ago, big business is not the only culprit.  They now have the government as a willing accomplice. 

Maybe the answer is two-pronged.  Break up the goliaths of business.  And, break down the power of government.  Because anything that’s too big doesn’t care about little you. 

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