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Posts Tagged ‘CEOs’

GOP Smash-And-Burn Tax Plan Does Nothing for Workers

Friday, October 27th, 2017

Congressional Republicans are selling a trickle-down tax scam times two. It’s the same old snake oil, with double hype and no cure.

A single statistic explains it all: one percent of Americans – that is the tiny, exclusive club of billionaires and millionaires – get 80 percent of the gain from this tax con. Eighty percent!

But that’s not all! To pay for that unneeded and unwarranted red-ribbon wrapped gift to the uber wealthy, Republicans are slashing and burning $5 trillion in programs cherished by workers, including Medicare and Medicaid.

Look at the statistic in reverse, and it seems worse: 99 percent of Americans will get only 20 percent of the benefit from this GOP tax scam. That’s not tax reform. That’s tax defraud.

Republican tax hucksters claim the uber rich will share. It’s the trickle down effect, they say, the 99 percent will get some trickle down.

It’s a trick. Zilch ever comes down. It’s nothing more than fake tax reform first deployed by voodoo-economics Reagan. There’s a basic question about this flim-flammery: Why do workers always get stuck depending on second-hand benefits? Real tax reform would put the rich in that position for once. Workers would get the big tax breaks and the fat cats could wait to see if any coins trickled up to jingle in their pockets.

House Speaker Paul Ryan claimed Republicans’ primary objective in messing with the tax code is to help the middle class, not the wealthy. Well, there’s a simple way to do that:  Give 99 percent of the tax breaks directly to the 99 percent.

The Republican charlatans hawking this new tax scam are asserting the pure malarkey that it provides two, count them TWO, trickle-down benefits. In addition to the tried-and-false fairytale that the rich will share with the rest after collecting their tax bounty, there’s the additional myth that corporations will redistribute downward some of their big fat tax scam bonuses.

A corporate tax break isn’t some sort of Wall Street baptism that will convert CEOs into believers in the concept of paying workers a fair share of the profit their labor creates.

Corporations have gotten tax breaks before and haven’t done that. And they’ve got plenty of cash to share with workers right now and don’t do it. Instead, they spend corporate money to push up CEO pay. Over the past nine years, corporations have shelled out nearly $4 trillion to buy back their own stock, a ploy that raises stock prices and, right along with them, CEO compensation. Worker pay, meanwhile, flat-lined.

In addition to all of that cash, U.S. corporations are currently sitting on another nearly $2 trillion. But CEOs and corporate boards aren’t sharing any of that with their beleaguered workers, who have struggled with stagnant wages for nearly three decades.

Still, last week, Kevin Hassett, chairman of the President’s Council of Economic Advisers, insisted that the massive corporate tax cut, from 35 percent down to 20 percent, will not trickle, but instead will shower down on workers in the form of pay raises ranging from $4,000 to $9,000 a year.

Booyah! Happy days are here again! With the median wage at $849 per week or $44,148 a year, that would be pay hikes ranging from 9 percent to 20 percent! Unprecedented!

Or, more likely, unrealistic.

Dishonest, incompetent, and absurd” is what Larry Summers called it. Summers was Treasury Secretary for President Bill Clinton and director of the National Economic Council for President Barack Obama.

Jason Furman, a professor at the Harvard Kennedy School who once held Hassett’s title at the  Council of Economic Advisers, called Hassett’s findings “implausible,”  “outside the mainstream” and “far-fetched.”

Frank Lysy, retired from a career at the World Bank, including as its chief economist, agreed that Hassett’s projection was absurd.

Hassett based his findings on unpublished studies by authors who neglected to suffer peer review and projected results with all the clueless positivity of Pollyanna. Meanwhile, Lysy noted, Hassett failed to account for actual experience. That would be the huge corporate tax cuts provided in Reagan’s Tax Reform Act of 1986.

Between 1986 and 1988, the top corporate tax rate dropped from 46 percent to 34 percent, but real wages fell by close to 6 percent between 1986 and 1990.

Thus many economists’ dim assessment of Hassett’s promises.

The other gob-smacking bunkum claim about the Republican tax scam is that it will gin up the economy, and, as a result, the federal government will receive even more tax money. So, in their alternative facts world, cutting taxes on the rich and corporations will not cause deficits. It will result in the government rolling in coin, like a pirate in a treasure trove. That’s the claim, and they’re sticking to it. Like their hero Karl Rove said, “We create our own reality.”

Here’s Republican Sen. Patrick J. Toomey, for example: “This tax plan will be deficit reducing.”

If the Pennsylvania politician truly believes that’s the case, it’s not clear why he voted for a budget that would cut $473 billion from Medicare and $1 trillion from Medicaid. If reducing the tax rate for the rich and corporations really would shrink the deficit, Republicans should be adding money to fund Medicare and Medicaid.

While cutting taxes on the rich won’t really boost the economy, it will increase income inequality. Makes sense, right? Give the richest 1 percenters 80 percent of the gains and the remaining 99 percent only 20 percent and the rich are going to get richer faster.

Economist Thomas Piketty, whose work focuses on wealth and income inequality and who wrote the best seller “Capital in the Twenty First Century,” found in his research no correlation between tax cuts for the rich and economic growth in industrialized countries since the 1970s. He did find, however, that the rich got much richer in countries like the United States that slashed tax rates for the 1 percent than in countries like France and Germany that did not.

This Republican tax scam is a case of the adage that former President George W. Bush once famously bungled: “Fool me once, shame on you. Fool me twice, shame on me.”

This blog was originally published at OurFuture.org on October 27, 2017. Reprinted with permission.

About the Author: Leo Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

How the Canadians Are Trying to Use NAFTA to Raise Your Wage

Tuesday, September 19th, 2017

Finally, after nearly a quarter of a century, the North American Free Trade Agreement (NAFTA) is being renegotiated. This is a good thing. NAFTA is called a “trade deal,” but it’s mostly a collection of rules that give corporations more power over the three economies of North America. It gives companies tools to undermine laws and rules that protect America’s working families. It increased threats by U.S. employers to close workplaces and move to Mexico. And once the companies got there, NAFTA provided strict rules for them, but only vague guidelines to protect working people’s rights and freedoms.

NAFTA negotiations have not progressed very far, and it is too early to say whether the effort will bring a New Economic Deal to working people or simply more crony capitalism. But there was some fantastic, surprising, excellent news recently.

The Canadian negotiating team did something big: They told the U.S. negotiators that U.S. laws that interfere with people’s freedom to negotiate on the job are dragging down standards for Canada and need to be abolished. Guess what? Canada is right.

These laws, known as “right to work,” are another example of the wealthiest 1% rigging the rules to weaken the freedom of people joining together in union and negotiating with employers for better pay, benefits and conditions at work. Not surprisingly, states with these freedom-crushing laws are less safe and have lower wages, dragging down workplace standards for those in other states, and apparently in Canada, too.

Canada gets the obvious: These laws take away working people’s freedom to join together and raise their wages. Canada is pushing the United States to be fairer to working people, just as the U.S. is pushing Mexico to be fairer to its working people. Will the U.S. negotiators see the light and agree to this proposal in NAFTA? We certainly hope so. It will tell us a lot about who the president stands with: Corporate CEOs or working families?

Learn more about laws that take away working people’s freedom.

This blog was originally published at AFL-CIO.org on September 19, 2017. Reprinted with permission. 
About the Author: Celeste Drake is the trade and globalization policy specialist at the AFL-CIO, where she advocates for reforms to U.S. trade policy to create shared gains from trade on behalf of working families. She has testified before the Senate Foreign Relations Committee, various House subcommittees and the U.S. International Trade Commission, and made presentations before the European Union’s Economic and Social Committee.

Canadian Mounties to the Rescue of American Workers

Friday, September 8th, 2017

The Canadian Royal Mounties have offered to ride to the rescue of beleaguered American workers.

It doesn’t sound right. Americans perceive themselves to be the heroes. They are, after all, the country whose intervention won World War II, the country whose symbol, the Statue of Liberty, lifts her lamp to light the way, as the poem at the statue’s base says, for the yearning masses and wretched refuse, for the homeless and tempest-tossed.

America loves the underdog and champions the little guy. The United States is doing that, for example, by demanding in the negotiations to rewrite the North American Free Trade Agreement (NAFTA) that Mexico raise its miserable work standards and wages. Now, though, here comes Canada, the third party in the NAFTA triad, insisting that the United States fortify its workers’ collective bargaining rights. That’s the Mounties to the rescue of downtrodden U.S. workers.

This NAFTA demand from the Great White North arrives amid relentless attacks on labor rights in the United States, declining union membership and stagnant wages. To prevent Mexico’s poverty wages from sucking U.S. factories south of the border, the United States is insisting that Mexico eliminate company-controlled fake labor unions. Similarly, to prevent the United States and Mexico from luring Canadian companies away, Canada is stipulating that the United States eliminate laws that empower corporations and weaken workers.

The most infamous of these laws is referred to, bogusly, as right-to-work. Really, it’s right-to-bankrupt labor unions and right-to-cut workers’ pay. These laws forbid corporations and labor unions from negotiating collective bargaining agreements that require payments in lieu of dues from workers who choose not to join the union. These payments, which are typically less than full dues, cover the costs that unions incur to bargain contracts and pursue worker grievances.

Lawmakers that pass right-to-bankrupt legislation know that federal law requires labor unions to represent everyone in their unit at a workplace, even if those employees don’t join the union and don’t make any payments. These dues-shirkers still get the higher wages and better benefits guaranteed in the labor contract. And they still get the labor union to advocate for them, even hire lawyers for them, if they want to file grievances against the company.

The allure of getting something for nothing, a sham created by right-wing politicians who prostrate themselves to corporations, ultimately can bankrupt unions forced to serve freeloaders. Which is exactly what the right-wingers and corporations want. It’s much easier for corporations to ignore the feeble pleas of individual workers for better pay and safer working conditions than to negotiate with unions that wield the power of concerted action.

Canada is particularly sensitive about America’s right-to-bankrupt laws because they’ve now crept up to the border. Among the handful of states that in recent years joined the right-to-bankrupt gang are Wisconsin and Michigan, both at the doorstep of a highly industrial region in Ontario, Canada.

So now, the governors of Wisconsin and Michigan can whisper in the ears of CEOs, “Come south, and we’ll help you break the unions. Instead of paying union wages, you can take all that money as profit and get yourself even fatter pay packages and bonuses!”

Then those governors will make American workers pay for the move with shocking tax breaks for corporations, like the $3 billion Wisconsin Gov. Scott Walker promised electronics manufacturer Foxconn to locate a factory there. That’s $1 million in tax money for each of the 3,000 jobs that Foxconn said would be the minimum it would create with the $10 billion project.

Right-wing lawmakers like Walker and U.S. CEOs have been union busting for decades. And it’s been successful.  In the heyday of unions in the 1950s and 1960s, nearly 30 percent of all U.S. workers belonged. Wage rates rose as productivity did. And they climbed consistently. Then, one wage-earner could support a middle-class family.

That’s not true anymore. For decades now, as union membership waned, wages stagnated for the middle class and poor, and compensation for CEOs skyrocketed. And this occurred even while productivity rose. By January of 2016, the most recent date for which the statistics are available, union membership had declined to 10.7 percent. The number of workers in unions dropped by nearly a quarter million from the previous year.

This is despite the fact that union workers earn more and are more likely to have pensions and employer-paid health insurance. The median weekly earnings for non-union workers in 2016 was $802. For union members, it was $1,004.

It’s not that labor unions don’t work. It’s that right-wing U.S. politicians are working against them. They pass legislation and regulations that make it hard for unions to represent workers.

It’s very different for unions in Canada. For example, union membership in Canada is growing, not dwindling like in the United States. In Canada, 31.8 percent of workers were represented by union in 2015, up 0.3 percentage points from 2014. That is higher than the all-time peak in the United States.

And it’s because Canadian legislation encourages unionization to counterbalance powerful corporations. In some Canadian provinces, for example, corporations are prohibited from hiring replacements when workers strike; striking workers are permitted to picket the companies that sell to and buy from their employer; labor agreements must contain “successorship” rights requiring a corporation that buys the employer to recognize the union and abide by its labor agreement; and employers must submit to binding arbitration if they fail to come to a first labor agreement with a newly formed union within a specific amount of time.

The second round of negotiations to rewrite NAFTA ended in Mexico this week. The third is scheduled for later this month in Canada. That’s a good opportunity for the northernmost member of the NAFTA triad to showcase its labor laws and explain why they are crucial to defending worker rights and raising wages.

Getting language protecting workers’ union rights into NAFTA is not enough, however. The trade deal must also contain penalties for countries that fail to meet the standards. This could be, for example, border adjustment taxes on exports from recalcitrant countries.

Canada’s nearly 20,000 Royal Canadian Mounted Police only recently filed papers to unionize. That occurred after the Canadian Supreme Court overturned a 1960s era federal law that barred them from organizing.

Canada’s Supreme Court said the law violated the Mounties’ freedom of association, a right guaranteed to Americans in the U.S. Constitution. Now, Canada is riding to the rescue of U.S. and Mexican workers’ freedom of association by demanding the new NAFTA include specific protections for collective bargaining.

This blog was originally published at OurFuture.org on September 8, 2017. Reprinted with permission. 

About the Author: Leo Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

Working People Have 17 Recommendations for NAFTA. Here’s #2

Wednesday, August 23rd, 2017

By now, you’ve probably heard of the North American Free Trade Agreement (NAFTA). You might have heard that some businesspeople think it’s a great deal, while average working families—and those who stand with us—think it only works if you’re already at the top.

If you’ve been reading our blog regularly, then you know NAFTA is being renegotiated. That means working people like us have an opportunity to fix it. And we laid out the first step: open the negotiations so that average citizens, not just corporate lobbyists and CEOs, can participate. So far, it’s not clear the negotiators heard us—but you can help us keep up the pressure.

Even if they do keep the doors closed on the talks, we have to address the rules of the deal. The first rules that need replacement are the labor rules. The labor rules determine whether the playing field is fair for all workers or whether global corporations can treat us like pawns, bidding down our wages and working conditions as they increase their profits at our expense.

Given our long experience of trying to use trade rules to protect rights and freedoms for working people, we know what works and what doesn’t. We won’t fall for vague promises about NAFTA being the best deal ever for working people. Instead, we will be looking for specific provisions.

A fair North American deal will:

  • Ensure that all three countries protect fundamental labor rights as set for in the International Labor Organization’s eight core conventions.

  • Establish an independent monitoring and enforcement entity so that governments can’t use delay tactics to deny our rights.

  • Establish prompt enforcement tools.

  • Ensure that goods traded between the countries are made by workers being paid living wages.

  • Protect migrant workers from fraud and abuse.

  • Protect all workers from discrimination and trafficking.

  • Contain effective tools to continually lift our wages and working conditions, rather then putting a ceiling on what we can achieve.

  • Ensure that no communities are left behind—we must all prosper together or we won’t prosper at all.

Since the dawn of the modern trade era (roughly 1990), no trade deal has ever put working families first. But we know the rules we need to make it happen. But no one will fight for those rules if we don’t lead.

Are you ready to join us? Urge your representative to call for open, transparent NAFTA renegotiations.

This blog was originally published at AFL-CIO on August 22, 2017. Reprinted with permission.

About the Author: Celeste Drake is the trade and globalization policy specialist at the AFL-CIO, where she advocates for reforms to U.S. trade policy to create shared gains from trade on behalf of working families. She has testified before the Senate Foreign Relations Committee, various House subcommittees and the U.S. International Trade Commission, and made presentations before the European Union’s Economic and Social Committee.

Tell the Labor Department Not to Repeal the Persuader Rule

Monday, June 19th, 2017

The Labor Department issued a proposal on Monday that would rescind the union-buster transparency rule, officially known as the persuader rule, designed to increase disclosure requirements for consultants and attorneys hired by companies to try to persuade working people against coming together in a union. The rule was supposed to go into effect last year, but a court issued an injunction last June to prevent implementation. Now the Trump Labor Department wants to eliminate it.

We wrote about this rule last year. Repealing the union-buster transparency rule is little more than the administration doing the bidding of wealthy corporations and eliminating common-sense rules that would give important information to working people who are having roadblocks thrown their way while trying to form a union.

AFL-CIO spokesman Josh Goldstein said:

The persuader rule means corporate CEOs can no longer hide the shady groups they hire to take away the freedoms of working people. Repealing this common-sense rule is simply another giveaway to wealthy corporations. Corporate CEOs may not like people knowing who they’re paying to script their union-busting, but working people do.

If the rule is repealed, union-busters will be able to operate in the shadows as they work to take away our freedom to join together on the job. Working people deserve to know whether these shady firms are trying to influence them. The administration seems to disagree.

A 60-day public comment period opened Monday. Click on this link to leave a comment and tell the Labor Department that we should be doing more to ensure the freedom of working people to join together in a union, not less. Copy and paste the suggested text below if you need help getting started:

“Working people deserve to know who is trying to block their freedom from joining together and forming a union on the job. Corporations spend big money on shadowy, outside firms that use fear tactics to intimidate and discourage people from coming together to make a better life on the job. I support a strong and robust persuader rule. Do not eliminate the persuader rule.”

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

Republican takes aim at your right to know how high CEO pay is compared to typical workers

Friday, February 10th, 2017

As of January 1, companies will have to make public how much their CEOs make compared to what their average workers make. They don’t like that rule so much — enacted thanks to Dodd-Frank — and they might be able to get it killed.

On Monday, the acting chairman of the Securities and Exchange Commission (SEC), Michael Piwowar, called for reconsideration of the rule that went into effect on January 1, hinting that it could be reversed.

“[I]t is my understanding that some issuers have begun to encounter unanticipated compliance difficulties that may hinder them in meeting the reporting deadline,” he wrote. So he called for a new period of public input over the next 45 days, after which he will direct the SEC staff to “reconsider the implementation of the rule based on any comments submitted and to determine as promptly as possible whether additional guidance or relief may be appropriate.”

Translation: Companies don’t want people to know how much more their CEOs make than the median worker, and rather than admitting that they don’t want people to know that, they’re calling it “unanticipated compliance difficulties.”

This rule isn’t something Republicans can just kill off immediately, but that’s clearly the direction they’re headed. Businesses have a lot to hide, after all. Like how CEOs make 276 times more than typical workers, while the corporate world lobbies against policies that benefit workers, like paid sick leave, paid family leave, or increased minimum wage.

Meanwhile, Donald Trump is stocking his cabinet with former CEOs.

This article originally appeared at DailyKOS.com on January 28, 2017. Reprinted with permission.

Laura Clawson is a Daily Kos contributing editor since December 2006. Labor editor since 2011.

Everything That's Wrong With The NFL Is Wrong With America, Too

Saturday, September 27th, 2014

Richard EskowSexism. A culture of violence. Untrustworthy leadership. Runaway wealth inequality. An indifference to workers’ health. Employees who are above the law. Hush-hush financing. Multimillion-dollar tax breaks.

We’re not talking about corporate CEOs or the Christmas parties on Wall Street. We’re talking about the National Football League.

NFL Commissioner Roger Goodell’s handling of Ray Rice’s videotaped brutality has brought the NFL back into the public eye. It’s a sorry spectacle which others have addressed at length, so we’ll just repeat the cliché: It’s the cover-up, stupid.

For my personal assessment of Goodell, we can turn the mic over to Bill Simmons and UltraViolet.

As for the NFL itself, let’s just say it’s America in microcosm.

Capital in the 21st Century NFL

While the league’s finances are largely kept secret from the public, we know the following from public filings (form 990) and news reports (including a leaked copy of the NFL’s audited financials for 2010):

The NFL organization has 1,856 employees and paid $107.7 million per year in salaries last year. Goodell was paid more than $44 million. That means more than 40 percent of the organization’s entire payroll went to one individual.

Most of Goodell’s income was in the form of a “bonus” based on performance standards which, like that of many corporate CEOs, have never been publicly defined.

Roger Goodell is not a “job creator,” even by the right’s loose definition. He – like most corporate CEOs nowadays – invented nothing, made nothing, and built nothing. And the gravy train doesn’t stop at his house. Jeff Pash, the General Counsel, was paid $6,199,000. The EVP of Business Ventures got $4,180,000. The CFO made nearly $2 million. The EVPs of Operations and Human Resources made more than $1.6 million each. (Another executive, the EVP of media, was paid $26 million by an “affiliated” organization.)

All told, more than 54 percent of the organization’s entire payroll went to five individuals – the organization’s top 0.0027 percent. The remaining 43 percent or so was divided among 1,851 employees- the 99.9973 percent.

Now that’s inequality.

Government of the rich, by the rich, and for the rich

The NFL doesn’t even make a profit – at least on paper. To the IRS, it’s a “nonprofit organization.” But “nonprofit” work pays well for some. The top guy’s salary has certainly soared in recent years:2014-09-25-Goodellpay[1]

A bipartisan bill called the “PRO Sports Act,” which would have ended the nonprofit status of the NFL and similar organizations, appears to have died in committee. It’s reasonable to assume that Goodell, the son of a Senator, had something to do with that.

Executives like Goodell – or, for that matter, bank CEOs like JPMorgan Chase’s Jamie Dimon – seem to be compensated more for their ability to influence elected officials than for their business acumen. On that score, at least, he’s been a good investment. In addition to protecting its tax status, Goodell’s NFL has brokered loans, bonds and tax concessions for its franchises.

Payback

The NFL had annual gross receipts of $184.3 million in 2010 – and that doesn’t include earnings for the individual franchises which own it. It reported $788,113,036 in total assets on the tax-exemption form which is its only public disclosure. It gave exorbitant salaries to its top executives – and it paid no taxes.

Goodell’s hypocrisy and apparent dishonesty is a shameful but very CEO-like display, one for which he’s not likely to be held accountable …

…that is, unless he becomes a financial liability.

But that day may be coming. More than half of those polled by Reuters/Ipsos said that sponsors should sever their ties with the NFL over its handling of violence scandals involving Rice, Minnesota Vikings running back Adrian Peterson, and other players. A number of sponsors have said they don’t want their ads running during games involving the Vikings or Rice’s former team, the Baltimore Ravens, according to  The Hollywood Reporter.

They say payback is a bitch. But in today’s America, the only payback that matters is counted in cold cash. If the day comes that owners are forced to choose between Roger Goodell and their own profits, the response will be swift and sure. The commissioner’s instant gratification will turn into instant karma.

Goodell will be fine, of course, no matter what happens. That can’t be said about most Americans. As for his accomplishments, well … Under his leadership the NFL fought reports of player head injuries for years. Its security apparatus and legal teams have intervened when its players are arrested, often for violent crimes, securing special treatment which ordinary citizens don’t receive. It has fostered a culture of misogyny, brutality, and amorality in the field of sport, whose stars were once considered examples for young people to follow,

Goodell’s football league isn’t an example for today’s corporatized America. It’s a reflection of it.

This blog originally appeared in Crook and Liars on September 25, 2014. Reprinted with permission. http://crooksandliars.com/2014/09/what-s-wrong-nfl-wrong-america.

About the Author: Richard Eskow is a Senior Fellow with the Campaign for America’s Future and the host of The Zero Hour, a weekly program of news, interviews, and commentary on We Act Radio The Zero Hour is syndicated nationally and is available as a podcast on iTunes. Richard has been a consultant, public policy advisor, and health executive in health financing and social insurance. He was cited as one of “fifty of the world’s leading futurologists” in “The Rough Guide to the Future,” which highlighted his long-range forecasts on health care, evolution, technology, and economic equality. Richard’s writing has been published in print and online. He has also been anthologized three times in book form for “Best Buddhist Writing of the Year.”

 

Oh Great, More CEOs Telling Us We Need to Cut Social Security and Medicare Benefits

Friday, January 18th, 2013

Jackie TortoraAs if we didn’t already have enough on our plates (having to fend off attacks from the “Fix the Debt” CEOs), now there’s another group of CEOs, the Business Roundtable, telling us we need to “modernize,” a.k.a. cut, Social Security and Medicare benefits by raising the eligibility ages and reducing cost-of-living adjustments (COLAs). How helpful. 

R.J. Eskow took on the Business Roundtable in his latest blog, How Extreme Is the Business Roundtable? Check Out Its Attack on the Elderly.

Yesterday, Gary Loveman, CEO of Caesars Entertainment Corp. and head of the Roundtable’s “health and retirement committee,” told Politico that “[a]ny effort to address the country’s fiscal problems has to have as a centerpiece reform of its principal entitlement programs.”

Added Loveman: “None of us [CEOs]—very few of us—are ideologically driven. We’re pragmatists….”

“I am encouraged by how relatively easy these remedies really are,” said Loveman. “… (and) they have a tremendously sanguine effect on the government’s fiscal health.”

That’s true. It is pretty easy. Just kick in a few rich people’s doors, seize their belongings…oh, wait. That’s the other extremist scenario. Loveman’s is the one where people who have paid for Social Security and Medicare coverage throughout their working lives must give some of their benefits up—for him and his friends.

These CEOs are the same people cutting back on pensions and retiree health benefits. Now they want working people to have even more economic insecurity in retirement by cutting the few benefits that keep seniors afloat. 

Raising the Social Security retirement age is especially damaging. Not only is it a benefit cut, workers 55 and older have the longest bouts of unemployment. The average time unemployed is nearly a year (51.3 weeks, compared to 34.3 weeks for workers younger than 55).  

Eskow points out that 8.9% of American seniors already live in poverty, while 5.4% are on the edge. The average Social Security recipient collects $1,164 per month.

Anyone who claims they can cut those benefits by 3%—and use those meager benefits to end elder poverty—is selling snake oil.

Snake oil indeed. There’s nothing more cynical than calling devastating cuts to vital lifelines “modernization proposals.” Working people know the difference. 

This post was originally posted on AFL-CIO on 1/17/2013. Reprinted with Permission.

About the Author: Jackie Tortora is the blog editor and social media manager at the AFL-CIO. Interviewing union musicians was her introduction to the labor movement. Her first job after graduating college was in Syracuse, New York, where she wrote and edited the International Musician, the monthly magazine for the American Federation of Musicians (AFM). Protecting Social Security and Medicare from benefit cuts brought me to Washington, D.C., where she spent two years as a new media coordinator at the National Committee to Preserve Social Security and Medicare. She came to the AFL-CIO in the summer of 2012, just in time to re-elect President Barack Obama. When she’s not tweeting about America’s unions, it’s likely she’s watching Syracuse basketball and football. 

When it Comes to Finding Workers, CEOs Suddenly Forget ‘Free Market’ Principles

Friday, October 28th, 2011

adele_stan_140x140Examining the complaints of some CEOs that they just can’t find qualified workers, economist Dean Baker lays waste to that argument on several fronts, most notably the CEOs’ apparent inability to apply the laws of supply and demand to fulfilling their stated workforce goals.

Baker, who co-directs the Center for Economic and Policy Research (CEPR), first crunches some data to show that, in fact, the ratio of unfilled jobs to employment is “down by almost a third from its pre-recession level,” Baker reports in a column titled, “A Generation of CEOs Who Don’t Know How to Raise Wages.” He writes:

According to standard economics, when businesses can’t fill job openings, they are supposed to offer higher wages. If these businesses offered higher wages, then they could lure away workers from their competitors…If these CEOs raised wages high enough, then these workers would be willing to work for their companies.

[…]

Since it would be rude to imply that CEOs are not being honest when they complain about the lack of skilled workers, we should assume that they don’t know how to raise wages. This is a problem that could be easily remedied. The government could offer short courses to CEOs and other top executives that would teach them how to raise wages and why this would be beneficial to their firms.

Of course, CEOs aren’t total strangers to methods of upping compensation packages — when it comes to their own, that is. The AFL-CIO annual PayWatch data shows that in 2010, CEOs of the largest companies received, on average, $11.4 million in total compensation last year.  Overall, CEOs of the 299 companies in the AFL-CIO Executive PayWatch database received a combined total of $3.4 billion in pay in 2010, enough to support 102,325 jobs paying the median wages for all workers.

In 1964, the apex of performance of the economy, CEO pay relative to average wage-earners was 24 to 1. Now it is 340-1.

This blog originally appeared on AFL-CIO Now Blog on October 27, 2011. Reprinted with permission.

About the Author: Adele Stan is a journalist and lifelong member of the labor movement, reports on a timely forum on inequality and jobs at Georgetown University today.

A COUNTRY is Not a COMPANY: CEOs Should Sit Down and Shut Up

Tuesday, September 13th, 2011

Jonathan TasiniI am continuously amazed by the reverence accorded company bosses. Put aside the incompetent ones, who get huge severance packages when they leave, or those who have looted their companies of tens of millions of dollars in pay and benefits, even when the companies lose money or collapse. I’m talking about even the ones who oversee profitable companies.

Why would anyone think that a CEO knows how to run a country? A country is not a company, as Paul Krugman wrote many years ago.

I’m struck by this point today because of three different public pleas by CEOs who essentially say, “the country is screwed up, I know what’s best so listen to me…you fools”. I’ll come back to the pleas in a moment. First, to Krugman.     Back in 1996, Krugman wrote a trenchant article entitled, “A Country Is Not A Company” (which was published as a short book). The beginning of the book is on the mark:

What people learn from running a business won’t help them formulate economic policy. A country is not a big corporation. The habits of mind that make a great business leader are not, in general, those that make a great economic analyst; an executive who has made $1 billion is rarely the right person to turn to for advice about a $6 trillion economy.

Krugman’s book talks about two areas that CEOs claim expertise but demonstrate they nothing about: Exports and Jobs, and Investment and the Trade Balance. I don’t think you need to know the specifics of his argument on those specific areas (but they are pretty interesting) to be able to move to his general observation:

Yet even if a business leader may not be very good at formulating general theories or at explaining what he or she does, there are still those who believe that the businessperson’s ability to spot opportunities and solve problems in his or her own business can be applied to the national economy. After all, what the president of the United States needs from his economic advisers is not learned tracts but sound advice about what to do next. Why isn’t someone who has shown consistently good judgment in running a business likely to give the president good advice about running the country? Because, in short, a country is not a large company.

Many people have trouble grasping the difference in complexity between even the largest business and a national economy. The U.S. economy employs 120 million people, about 200 times as many as General Motors, the largest employer in the United States. Yet even this 200-to-1 ratio vastly understates the difference in complexity between the largest business organization and the national economy. A mathematician will tell us that the number of potential interactions among a large group of people is proportional to the square of their number. Without getting too mystical, it is likely that the U.S. economy is in some sense not hundreds but tens of thousands of times more complex than the biggest corporation.

Moreover, there is a sense in which even very large corporations are not all that diverse. Most corporations are built around a core competence: a particular technology or an approach to a particular type of market. As a result, even a huge corporation that seems to be in many different businesses tends to be unified by a central theme. [emphasis added]

The point is that actually CEOs, and business people generally, are quite narrow-minded. I don’t, in this context, mean that pejoratively. It is simply that they think in terms of their industry, their product–and they have almost no capability to think in broader terms that we need as a country.

Finally, Krugman says:

The next time you hear business-people propounding their views about the economy, ask yourself, Have they taken the time to study this subject? Have they read what the experts write? If not, never mind how successful they have been in business. Ignore them, because they probably have no idea what they are talking about.[emphasis added]

This argument is elegant and simple–and does not even take into account the most obvious reason not to put economic policy in the hands of business executives: today’s CEOs generally are not interested in the plight of their workers, the middle-class or the poor.

Which brings me to a whole roster of business people who want to give us advice on how to run the country: Steve Schwartzman, Howard Schultz and today’s Heinz-like concoction of 57 varieties of business people et al who are squawking about the phony debt and deficit crisis. Let me take them in turn.

Leading off is the almost comical, if not pathologically perverse, CEO of Blackstone, Steve Schwartzman. Hand-wringing today in the Financial Times, Schwarztman calls for “shared sacrifice” and writes in a piece entitled–hold your laughter, please–“An olive branch to Obama: I will share the pain”:

This problem began when the administration sought to attribute blame for the financial and economic crisis and alienated large segments of the business and banking community. They cast them as villains regardless of their culpability. Predictably, business reacted with fear and limited economic expansion, hiring and new lending. A second response to this was the rise of the Tea Party, which in turn attacked the administration and the Democrats. Unless we end targeted class warfare in the US, we cannot solve our economic problems or stop a long period of potential decline.

So, let me get this “economic logic” straight: the president mildly castigates an industry that was clearly and demonstrably responsible for the financial crisis that obliterated trillions of dollars in wealth and because the president hurt the feelings of the people running this industry and others stopped investing? You mean, as opposed to the economy freezing up because of plummeting demand?

Forget for a moment the whining about “class warfare” (which, in Schwartzman’s mind, is the criticism of the super-wealthy who have robbed the country). How can anyone take seriously a man who connects criticism to the cause of the massive economic crisis? That’s just loony.

Now, in fairness, I understand where Schwartzman is coming from with his bruised feelings because, as I wrote about in The Audacity of Greed”, he’s truly a party man:

Here’s a question to ponder: does Stephen Schwarzman still stare at the giant portrait of himself that hangs in his living room and thinkabout what a financial genius he is—even though his company, the private equity firm Blackstone, lost $232 million in the first quarter of 2009? I’m going to bet that a man who has the desperate need to constantly look at a larger than life representation of himself is not capable of admitting that the vision he has of himself as a financial wunderkind is, based on real world results, a fantasy.

…On top of earning a lot of money, Schwarzman also seems to have a compulsive need to flaunt his wealth, as he has engaged in some ostentatious spending sprees over the years. His sixtieth birthday party in 2007 is already the stuff of society legend in over-the-top self-indulgence. Held in New York City’s cavernous Park Armory, whose entrance was redone to resemble the birthday boy’s apartment, the event included performances by Patti LaBelle, who sang a song about Schwarzman, and Rod Stewart. The emcee was comedian Martin Short. The tab for the party: $3 million. And, to top things off, the massive portrait of Schwarzman was temporarily borrowed from his living room and hung in the Armory for all to gaze upon.

The birthday party was just the tip of the iceberg when it came to Schwarzman’s spending orgy. As detailed in The New Yorker, “In May, 2000, Schwarzman paid $37 million—reportedly a record sum at the time for a Manhattan co-op—for a thirty-five-room triplex on Park Avenue that was once owned by John D. Rockefeller, Jr. In 2003, he paid $20.5 million for Four Winds, the former E. F. Hutton estate in Florida, which occupies a choice spit of land between the ocean and the Intracoastal waterway.…In 2006, he paid $34 million for a Federal-style house, on eight acres on Mecox Bay, in the Hamptons, that was previously owned by the Vanderbilt heir Carter Burden.” In addition to those homes, Schwarzman also owns a coastal estate in Saint-Tropez and a beachfront property in Jamaica. The total value of the five properties: $125 million. “I love houses,” Schwarzman told The New Yorker. “I’m not sure why.”

Based on the grandiose and very public expressions of his wealth, you would at least think that the actual financial performance of the Blackstone Group under Schwarzman’s leadership would be strong. Guess again. In fact, many of the investments that the company has made under Schwarzman’s watch have turned sour.

So, why would anyone consider this CEO fit to be listened to?

Exhibit #2: Howard Schultz, CEO of Starbucks. You probably have caught his letters to America”.

We must restore hope in the American Dream. We must celebrate all that America stands for around the world. And while our Founding Fathers recognized the constructive value of political debate, we must send the message to today’s elected officials in a civil, respectful voice they hear and understand, that the time to put citizenship ahead of partisanship is now.

Ah, yes, the CEO all worried about “partisanship gridlock”…we’ve heard that song before. Putting aside why anyone would listen to a guy who knows one thing (coffee), why would a country want to listen to someone who wants to restore the “American Dream”, but conveniently forgets how aggressively he has resisted and fought any attempt to unionize Starbucks?

He’s another charlatan.

And, finally, riding to the rescue is the Ketchup brigade, who want us–you and me, dummy–to really think “big” when it comes to the phony debt and deficit “crisis”:

A group of at least 57 prominent business executives and former government officials have signed a petition in support of a greater deficit reduction, which they are to release at a news conference on Monday. Among them are former treasury secretaries, budget directors and economic advisers to eight presidents from Richard M. Nixon to Mr. Obama; former Congressional leaders; and executives of top companies.

Their letter reflects a broad sense of urgency in both parties, and among economists and businesses, that the nation must put in place long-range measures to shrink future deficits.At current spending levels, those deficits are expected to balloon over the next decade as the population ages and as health care costs rise.

The letter does not call for short-term job-creation measures like the tax cuts and infrastructure spending Mr. Obama proposed last week, which would add to deficits initially.[emphasis added]

Ahem. The group is led by David Cote, the CEO of Honeywell, whose main distinction, as far as I can tell is, that he was paid $15.2 million while his company got a $471 million refund and maintains at least five tax havens off-shore

And this is a guy who we want to listen to about ANY policy relating to economic health of the country? Who helps a corporation not pay taxes AND stashed money abroad?

To sum up: it is just foolish to believe that CEOs have any clue how to run a country. The only reason, in real life, that they have any megaphone is simply because they can buy it–either full-page ads, or think-tank loyalty, or literally our politicians.

But, we shouldn’t give them the time of day.

This blog originally appeared on Working Life on September 12, 2011. Reprinted with permission.

About the author: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

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