The Better Business Climate Model

1038 Words5 Pages
The Better Business Climate model is a plan that was used to bring renewed prosperity to the United States. It actually became the operating policy for both Republican and Democratic administrations since 1980 (Leopold, p. 33). The Better Business Climate model follows three simple steps: “1.) Cut taxes on corporations and the super-rich, 2.) Reduce regulations, especially on Wall Street, and 3.) Pare government social services” (Leopold, p. 93). The idea behind the model was to inspire the wealthy people of the United States to invest, which would create more jobs in order to raise incomes for everyone working. According to the chart in the textbook, the Better Business Climate model in theory should cut taxes, cut regulations, and cut government…show more content…
The American federal government slashed effective tax rates for large corporations and the rich, mainly the top one-percent. The major drop in taxes really began in the late 1980s in which large corporations have been reaping the benefits ever since. Regulations, which keep corporations and departments in check, were severely cut. The cuts in regulation really helped Wall Street in which Wall Street firms now had greater economic freedom. The model eliminated the Glass-Steagall legislation, which prevented large firms from making risky financial investments. Deregulation is the key to runaway equality and deregulation allowed it to happen (Leopold, p. 35). Lastly, reducing government social spending eliminated many safety net programs that aided and protected workers and families during tough economic times. The cutting of safety net programs does the exact opposite of what the Better Business Climate model promised. The model is supposed to bring renewed prosperity to the United States but it brought more inequality and stripped safety net programs that actually helped most Americans. This lack of assistance means that struggling people are struggling even more and they have less money to spend and to put back into the economy. Since the creation of the Better Business Climate model, government spending on food stamps, unemployment insurance, and other social programs has been cut as…show more content…
The model is creating vast opportunities for the wealthy and stripping away opportunity for the rest of the country. The model is also wreaking havoc on organized labor in the United States. Unions are an important entity in the field of work in which they create more job security for workers and fights for their rights in a collective and organized way. Unions are also the strongest regulatory force that corporations face (Leopold, p. 36). This allows union workers to be protected against greedy corporations. After all, a corporation’s main job is to increase profit and make stockholders happy. Therefore, corporations will do anything to increase revenue, even if it means punishing the corporation’s own workers. Workers of a corporation are often viewed as liabilities, not assets. The Better Business Climate model undermines unions and makes this worse for workers. When unions are strong, they can bargain and win better wages, working conditions, and benefits. Also, according to the Jobs, Wealth, Income, and Our Future Handout, as unions decline, the middle class disappears. With no middle class, there is just the upper class and the lower class, which means great income and opportunity gaps. Therefore, according to the same handout, the top 1% has accumulated nearly 40% of America’s wealth. The Better Business Climate model tries, and usually succeeds, at giving more money to corporations
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