Class Warfare Blog

February 16, 2018

The “Right-to-Try” Scam

There seems to be a movement to disrupt or remove “regulations” on pharmaceuticals. I mean why should those poor companies have to jump through all of those hoops to get a drug to market? This is called the “right-to-try” movement. Even President Trump has heard of it (ergo Fox (sic) News reported on it).

So, would people who are in need of some medical help be given the right to try unproven pharmaceuticals? This has been on option for richer citizens for quite some time. At the peak of the AIDS epidemic, people who could afford the effort were heading for Asia and Mexico to try all kinds of “therapies” to save their lives. I am unaware if any of these proved a source of drugs that ended up actually helping people so afflicted.

Or, is this just a cynical scam of “let’s try out drugs on desperate poor people?”

I’ll guess I’ll believe it when these assholes suggesting this shortcut to the clinical trials needed to verify a drug’s effectiveness line up to test out those drugs themselves. I suggest that what they see in this future is unproven pharmaceuticals are “tried” and then anecdotal evidence of cures is available (or fabricated) and sales soar through the roof. When problems occur (ineffectiveness, horrific side effects, deaths, etc.), the companies can pleas “How could we have known? They had a “right-to-try” and exercised it. We thought it would work. It is sad; our thoughts an prayers go out to the afflicted.” Typical of plutocrats it is: heads I win, tails you lose.

Assholes.

(Try a key word search for thalidomide.)

 

 

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January 12, 2018

Oh, If Someone Else Will Pay For It, Sure

Walmart, the nation’s largest private employer, said on Thursday that it would raise its starting wages, give bonuses to some employees and vastly expand maternity and parental leave benefits for its army of more than one million hourly workers. The retailer said that it would use some of the money it expects to save under the recently passed Republican tax bill to pay for the raises and enhanced benefits.

Walmart said it would increase its starting hourly wage from $9 to $11, and provide one-time cash bonuses of up $1,000 to hourly workers, depending on how long they have been with the company. The wage increase brings Walmart in line with some of its other retail-industry rivals amid a tightening labor market. Target raised its base pay to $11/hr last fall.

So, Walmart is struggling to keep up with Target? WTF?

Within hours of its self-serving announcement, Walmart undercut its triumphal message when news leaked that it was closing 63 of its Sam’s Club stores.

So, was the wage increase a smoke screen? Some “good news” to cover the “bad news” to follow? Otherwise why make the announcements on the heels of one another?

And, since Walmart is using its “tax cut” to pay for some of these employee benefit increases, how much of it we do not know, are they saying “Gee, now we can afford it?” Walmart has made huge profits for its owners and investors for decades, large enough that they could have been a leader in how to treat their employees. But no, Walmart would rather their primaries get to become billionaires than their workers to have a living wage.

And if anyone claims that Walmart is paying the “market price” for its labor, I will scream! The “market” is not magic, in fact it is a political construct that has been manipulated to create the lowest possible labor costs for its participating companies. The “market” is something that is a lousy guide for any endeavor. Worse are “free markets.” Any decent economist can tell you that unregulated markets doom the sectors they serve. In fact markets cannot thrive without regulation. So, why is one of our major political parties campaigning on a “regulations are bad, we must get rid of them” plank? Ask the people who are paying for those opinions to be espoused and actions taken. (Hint: it ain’t you or me.)

As to who will actually pay for those raises, look forward shortly to the Repubs to cut benefits to poor people. Why? Because the tax jiggering they have pull off is going to lower federal tax receipts and “we won’t have the money” to pay for such frivolous expenditures. Look for Walmart employees, a class of workers who benefit from the government programs lined up for haircuts by the GOP, even with their raises and bonuses to be less well off a year from now than they are now.

Three Billion = Not Enough

Today, Carrier, the profitable heating/ventilation/air conditioning company, owned by United Technologies Corporation, a federal contractor whose climate, controls, and security division, of which Carrier is a part, reported three billion dollars in operating profit in 2016—is letting go of more than two hundred employees in its second and final wave of Indiana-based layoffs, which began last July. In total, the company will be laying off more than five hundred employees as it moves manufacturing jobs to Monterrey, Mexico. Many of those employees voted for Donald Trump, who made saving Carrier’s “big, beautiful plant” one of his most repeated campaign promises. It was part of his broader pre-election claim that “A Trump Administration will stop the jobs from leaving America.”

Do realize that careful analyses of such moves often show the savings are minimal. Because the jobs are no longer near the U.S.-based managers, another level of managers has to be hired. Then there is transportation costs, and…. One thing you can be sure will be affected is their stock price. “Shareholders” love these moves, why no one knows. I suspect it is the choir praising the minister as both managers and shareholders belong to the same church, the Church of Greed.

Three billion dollars in profits in just one year and a sterling reputation for quality and … oh, we have to move to save the company? WTF?

January 8, 2018

Pigs at the Private Trough

I have written before about CEO compensation, mainly that it is being manipulated by the CEOs themselves and their hand-picked boards of governors (often made up of other CEOs). This largess isn’t supported by history in this country and now a major study by Bloomberg researchers has driven a stake into any argument that these overpaid CEO’s are worth what they are paid. A post on OurFuture.org stated: “The Bloomberg researchers looked worldwide at major corporations of similar size and heft. In all, the researchers examined corporate pay records in 22 nations. In not one of these nations, Bloomberg found, do the executives of top-line firms make anything close to the paychecks of America’s corporate execs.

“In fact, America’s top corporate executives are taking home, on average, quadruple the average CEO pay that comparable top execs in the rest of the world are making.

“If this huge pay difference simply reflected a “marketplace” judgment on the sheer talent of America’s top execs, top U.S. corporations would be totally dominating global markets, outselling their foreign rivals by wide margins in everything from cars to computers.

“U.S. corporations are doing no such thing, of course. In one key global market sector after another, foreign corporations that pay their CEOs much less than U.S. CEOs are running neck and neck with their U.S. counterparts — and often leading the pack.”

CEOs and their cohort (business executives) are the largest growing segment of the 1% and are major drivers in the efforts to establish even greater wealth and pay inequality through manipulations of the government. If they were insects we would not hesitate to spray them out of existence for the pests they are.

I have suggested a way to dial back these bloated CEO salaries. It is relatively simple. If you like your current CEO, renegotiate his contract around a salary 50% of whatever they are currently making. If they say that they will “take their ball and go home,” say “fine.” Go to the Vice-CEO and offer them the job at 50% of what you were paying your current CEO. In all likelihood they will jump at the opportunity to improve their resume, but if they do not, go to the next most senior executive and offer him/her the job. You will find a taker and your company will not suffer much if at all. If you are in favor of a “kinder, gentler” process, you can make the reduction to 75% or whatever you deem appropriate. If the subordinates to your current CEO are also making bloated salaries, the same process should be applied to them. We certainly would not want the top executives making less than their subordinates! (Hey, the top guys used this to ratchet their salaries up, we can use it to ratchet the others’ salaries down.)

The fact the foreign companies that are doing as well or better than our companies are “getting by” with CEO pay one fourth of what we are paying says something. Heck, if you can’t find anyone in your corp who will take the job at 50% of current CEO pay, offer it to one of those foreign executives. To them the job will come with a pay raise.

January 1, 2018

How Could We Have Known?

Filed under: Business,Science — Steve Ruis @ 10:12 am
Tags: , , ,

I can hear it now, the energy executives who express wonderment at the extent of the damage caused by climate change while looking bewildered for the cameras: “How could we have known?” They will say this.

Well, help me count the ways…. Here is a warning given in 1959, almost 60 years ago, during an institute called by, of all people, the energy executives.

https://www.theguardian.com/environment/climate-consensus-97-per-cent/2018/jan/01/on-its-hundredth-birthday-in-1959-edward-teller-warned-the-oil-industry-about-global-warming

December 30, 2017

We Can Trust Corporations As They Would Do Nothing to Besmirch Their Reputations, Part 298

As reported on the Naked Capitalism website:

“’A unit of Caterpillar that repaired railcars at a Los Angeles facility pled guilty last week to a federal environmental offense of dumping parts into the ocean to conceal that it was performing unnecessary and improper repairs for several railcar operators’ [Corporate Crime Reporter]. ‘As a result of illegal conduct that spanned the years 2008 through 2014 – including the unnecessary and improper repairs on railcar adapters, brake beams, grating platforms, brake shoes, friction castings, hand brakes, roof liners and side bearings – United Industries earned at least $5 million.’

 

December 18, 2017

Rigged, Rigged, Rigged … for the Elites, Of Course

The elites learned long ago that if you have to coerce people through physical threat, they were in jeopardy immediately. If a strong man in a tribe tried to bully all of the others, well all you needed were three people with clubs willing to take eight hour shifts and, well, the strong man has to sleep sometime and when he does … bam, his brains get used for decorations.

The elites learned that it is far easier to use another tool of oppression: culture. (Note Please do not think I am claiming that culture is only used to oppress. I am merely claiming it can be.) We use “tradition” to defend the status quo, for example. What is tradition but a claim that “we have always done it this way?” In more primitive times, when we didn’t have the ability to determine the best of a large number of options, sticking to the “tried and true” was a good strategy, but this strategy doesn’t allow for any positive innovations while disallowing negative changes. Religion is also a powerful coercive tool, being based on obedience … solely.

Consider the situation in the U.S. in which the elites have manipulated the system to their and only their advantage. For example, for the period 1950 to 2009, if you adjust the S&P 500 for inflation and account for dividends, the average annual return comes out to exactly 7.0%. This is a rough measure of what the wealth of the elites gets in the way of a “return on their investment” (ROI). Have you been getting 7% on your saving accounts? No? I get about 1.2% on mine because they are ordinary savings accounts. Even special savings accounts don’t get much more than 3%. So, is the elite’s money special or something? Yes, it is.

The elites money has an artificially inflated ROI in that they have created a new culture in the corporate world around “shareholder value.” Many corporations now claim that their sole reason for existing is to maximize shareholder value. If you had suggested this to corporation executives in the 1960’s, they wouldn’t have known what you were talking about. Corporations used to have a manifold of reasons they existed. Creating a return on the investments of their shareholders would be one of them, but not the most paramount. They might have listed expansion of the business No. 1, or a transformation of the business to serve a changing market as No. 1, or quality as No. 1, and they certainly would have had goals portraying the corporation as a steward of their properties and as good citizens in their communities. Many of these could have been lip service only, but at least they were there. Now, goal one is “shareholder value” and there is no goal two or three.

Gosh, who would this benefit? Obviously shareholders, but who are those people? Oh, they are the elites, right? They own the vast majority of the stocks. So, the stock market has been captured by the elites to serve the elites and now only the elites.

This was pulled off by a change in corporate culture. How was this pulled off? Well, you start with a leashed economist who produces a “theory” that corporations are more efficient/profitable/whatever if they have that goal and that goal only. This was not a theory by the way, but it was called one. The rest of us would call it a “guess,” or and “idea,” or an “argument,” at best an “hypothesis.” It was never proven, just used as support for a culture change that was driven by prominent “shareholders.” (Please note that CEOs are now the largest segment of the elites and that taking much of their remuneration in the form of stock options was not their idea, but once it was, they became more accepting of the “shareholder value” focus of their corporations.)

Now it is a matter of “normal” business that the elites get a 7% ROI on their much larger amounts of wealth and we get ca. 1% ROI on our saved wealth. They start with more money than us and get a higher ROI, so their wealth “lead” keeps expanding because of the rigged system (7% of a larger number grows much faster than 1% of a much smaller number).

And this is just one aspect of the rigging of our systems. The stock market, as a whole, no longer plays the role you were taught in school. It is basically a rigged speculation market now, one that extracts wealth from corporations and funnels it to the elites, who use that money to buy more political and cultural changes. And guess who those changes favor …

November 21, 2017

Teachers Unions? Bah, Who Needs Them?

Six years ago, the state of Wisconsin passed the highly controversial 2011 Wisconsin Act 10, which virtually eliminated collective bargaining rights for most public-sector workers, as well as slashed those workers’ benefits, among other changes.

As Gov. Scott Walker (R-WI) argued, “We no longer have seniority or tenure. That means we can hire and fire based on merit, we can pay based on performance. That means we can put the best and the brightest in our classrooms and we can pay them to be there.”

Well, did they?

What do you think will happen to an employer who slashes wages and benefits? People will leave their employ. Who leaves first? The people who have the most confidence they can find another job, that is the best workers. Who stays. The sluggards, the unimaginative, the fearful … not all, of course, but a higher concentration of these stay. (Studies have shown this to be the case.)

Action Reaction
An analysis of the effect of Act 10 has found:

  • In the year immediately following the law’s passage, median compensation for Wisconsin teachers decreased by 8.2 percent in inflation-adjusted terms, with median benefits being cut by 18.6 percent and the median salary falling by 2.6 percent. Median salaries and benefits continued to fall during the next four years so that median compensation in the 2015-16 school year was 12.6 percent—or $10,843 dollars—lower than it was before the passage of Act 10.

  • The percentage of teachers who left the profession spiked to 10.5 percent after the 2010-11 school year, up from 6.4 percent in the year before Act 10 was implemented. Exit rates have remained higher than before, with 8.8 percent of teachers leaving after the 2015-16 school year— the most recent school year for which data are available.
  • The percentage of teachers with less than five years of experience increased from 19.6 percent in the 2010-11 school year to 24.1 percent in the 2015-16 school year.
  • Average teaching experience decreased from 14.6 years in the 2010-11 school year to 13.9 in the 2011-12 school year, which is where it remained in the 2015-16 school year.
  • Interdistrict moves—when a teacher leaves one Wisconsin district to teach at another the next school year—has increased from 1.3 percent before the passage of Act 10 to 3.4 percent at the end of the 2014-15 school year.

Are you surprised?

The False Narrative
The core of the false narrative is in plain sight; it is “That means we can hire and fire based on merit, we can pay based on performance.” This is a business model. The problem is that in a business, the “boss” owns the company (or the boss’s boss or the …). The owner has the right to hire and fire inherent in his ownership. In a public school, the “owner” is the public, the taxpayers of the school district. There is no mechanism by which those owners can fire anyone (by state law). Prior to Act 10, the “owner” of each school district elected a school board which carried out negotiations with the employees to determine wages and working conditions. In no school district of which I am aware are teachers getting rich. When you think of employees getting rich, you think of doctors, lawyers, stock brokers, high level executives, but teachers … not so much. Having high educational attainment did not result in abnormally high wages for teachers, but there were tradeoffs: instead of higher salaries, better benefits and working conditions were offered and accepted, through negotiation. Act 10 chopped the head off of local control and took it over at the state level. (Republicans in favor of local control? Not so much.)

So, how did the minions of the schools (principals?) do in hiring the best and the brightest? How did they do in paying for performance? How did they do with getting the bums out of the racket? Aren’t these business types always talking about how important good management is? Was there any effort to improve the quality of the people in charge? No? (No.)

As usual, the actual motives for Act 10 was not in the bullshit offered by proponents. The Koch Brothers-fueled politician, Scott Walker, was executing a typical anti-union action for the billionaire class. Unions are the only organization with enough power to resist the oppression of workers by employers, hence they have to go. (Plus they tend to vote Democrat.)

But actions have reactions. Too bad Scott Walker doesn’t feel any of the reaction … just the teachers and the students and the “owners” of the school district. The Koch Brothers, in reaction, kept pouring money into Scott Walker’s presidential candidacy and into his gubernatorial re-election campaign coffers. If you want quality workers, you gotta pay them!

November 10, 2017

Boy, I Love Ian Welsh

But unlike most of the rest of the world, China is actually trying to tackle problems, to think decades ahead, to plan and to do big important things. Some of what China considers important, like its expansion of a truly oppressive surveillance citizen which will include a public score for every citizen, I don’t like, but China does big things, good, bad or flawed, while we watch approaching catastrophes and gently hum to ourselves, then check our phones.

Follow the brilliant mind of Ian Welsh at his blog.

November 3, 2017

Conservative A-hole Tanks Own Company Because Union

According to the California Today column in today’s NY Times:

“… popular news sites went dark on Thursday after its parent company DNAinfo shut down the entire Gothamist network of city-centric websites.
“The move came a week after reporters and editors at the New York newsrooms of Gothamist and DNAinfo voted to join a union.
“On Thursday, visitors to the websites were greeted by a post from Joe Ricketts, the company’s billionaire owner and founder of TD Ameritrade. He praised journalists who ‘reported tens of thousands of stories that have informed, impacted, and inspired millions of people.’
“But he added, ‘DNAinfo is, at the end of the day, a business, and businesses need to be economically successful if they are to endure.’“Mr. Ricketts, who started DNAinfo in 2009 and bought Gothamist last spring, had been outspoken in his dislike of unions.“As the company’s New York employees moved to unionize last spring, management warned that DNAinfo had been losing money for years. Mr. Ricketts later wrote, ‘I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.’”

Conservatives have poisoned their own minds about unions so much that this, er, gentlemen, couldn’t see a major opportunity right in front of himself.

If it were true that the company had been losing money for years (one has to ask why one expands a company by buying another one when one is losing money, but we understand one has to spend money to make money), but I digress, if the company has been losing money for years, open the books to your new union and ask them to be part of the solution rather than part of the problem. Closing the company is still an option, in fact it is a big hammer to use if conventional negotiations were to occur. (I’d rather avoid conventional negotiations and instead prefer interest-based negotiations, but one doesn’t always control how things will go.)

Possibly, if the company were losing money, the union could be a source of ideas as to how to reverse that trend. Certainly it would damper a unions lust after better wages and working conditions for its members.

Companies of European origin who set up shop in the U.S. actively encourage the formation of unions as being effective partners in the running of a profitable company. European countries include union officers on their boards of governors, often by law as well as custom. Of course, in the U.S. they run into conservative state and federal government representatives who put the kibosh on such efforts when they occur. We can’t have examples of working, cooperative unions to be able to point to now, can we?

We would like to know whether Mr. Ricketts has ever been a member of a union, or worked in a union environment, or managed a union-based company. I suspect not. I assume he got his information from other rich assholes like himself, who have no idea what they are talking about and would rather put out their eyes than see what is right in front of them.

In this case the creator of the “corrosive us-against-them dynamic” is certainly not the newly created labor union, it never had a chance to act one way or the other. Gosh, I wonder then, what the source of that “corrosive dynamic” was? Hmm.

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