Class Warfare Blog

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.

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January 7, 2018

If the Elites Might Benefit, Then Sure, They are For It

In today’s NY Times an article (Medical Research? Congress Cheers. Medical Care? Congress Brawls by Robert Pear) states that there is some bipartisan support for science in our Congress. Here’s the introduction:

“WASHINGTON — They cannot agree on subsidies for low-income people under the Affordable Care Act or even how to extend funding for the broadly popular Children’s Health Insurance Program — two issues requiring urgent attention as Congress returns to work.

“But a more exotic corner of the medical world has drawn rapturous agreement among Republicans and Democrats: the development of new treatments and cures through taxpayer-funded biomedical research.

“For the third straight year, lawmakers are planning to increase the budget of the National Institutes of Health by $2 billion. In the process, they have summarily rejected cuts proposed by President Trump.

“The push for additional funding reflects a fascination among legislators with advances in fields like molecular biology, genetics and regenerative medicine, even as they wage bitter battles over just how large a role the government should play in financing health care and providing coverage.”

When the shade the politicians have thrown is illuminated, it is clear why this support is bipartisan. New medical procedures, even those which prove to be very costly, will help keep the elites alive longer. The elites have told us over and over that “America affords us the finest medical care in the world.” What we didn’t focus on was the use of the word “us.” They were referring to the elites as only they can afford the finest. The fact that our medical care system only ranks somewhere near the middle of first world countries is irrelevant and they know it. Those results are based upon average health outcomes and the elites are paying for treatments and health outcomes that the top 1% get. They do not care much at all about the poor health outcomes that the poor and middle class can afford as those do not affect them directly. But there are many of us and few of them, which means they are more than willing to take our tax dollars to pay for their cures.

Everything you need to see is right in front of your eyes. We only need to believe what they are saying, what they actually are saying and not what we wish to hear.

January 5, 2018

Our Current Crop of Economists” Wrong, Wronger, or Wrongest?

Filed under: Economics — Steve Ruis @ 8:30 am
Tags: , , , ,

If you want a completely different take on what economics could be, showing us why the current path we are on is one to oblivion, this is a must read. And it makes a lot more sense than the gibberish we are currently being fed.

More Power to the Workers: Seymour Melman on Extraction by the Military, Managers, and Finance

If you want to understand the modern world, the Naked Capitalism site is an absolute help.

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.’

 

The Only Way to Less Inequality?

Here is a devastating assessment of the actual cost of the GOP’s recent tax bill. It is by Bill Honig, who I have met and consider to be a smart and honorable man.

http://www.buildingbetterschools.com/2017/12/26/faq-for-gop-trump-tax-bill/

Much of the GOP tax bill has been labeled as “bad news,” so I do not think you will be surprised to find out the news is worse that we thought. I bring this up because a new book has come out that addresses the history of inequality and the only forces that seem to reverse it for even small periods of time. The book is “The Great Leveler” by Walter Scheidel. Here is part of the description of that book (from Amazon.com):

How only violence and catastrophes have consistently reduced inequality throughout world history
Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that inequality never dies peacefully. Inequality declines when carnage and disaster strike and increases when peace and stability return. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world.

Ever since humans began to farm, herd livestock, and pass on their assets to future generations, economic inequality has been a defining feature of civilization. Over thousands of years, only violent events have significantly lessened inequality. The “Four Horsemen” of leveling—mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich. Scheidel identifies and examines these processes, from the crises of the earliest civilizations to the cataclysmic world wars and communist revolutions of the twentieth century. Today, the violence that reduced inequality in the past seems to have diminished, and that is a good thing. But it casts serious doubt on the prospects for a more equal future.

This book supports my view that the fundamental purpose of civilization is to create inequality of income, wealth, and opportunity, for the benefit of the elites, both secular and religious, with the costs to be born by everyone else. And I have advocated, sometimes tongue in cheek, that it was time to get out the pitchforks and torches, but if this author is correct only “mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich” we are in quite dire straights. We have been making war on other countries for over 200 years of our existence, and it is a very rare occasion for war to intrude on our shores, and a “mass mobilization” for war means the war has to be very, very large indeed. That is a path, in this age of nuclear weapons, I do not wish to take. State collapse and catastrophic plagues aren’t appealing, so that leaves “transformative revolutions” to us. Such revolutions can be non-violent (rare) or violent and considering the polarization of the U.S. and our massive personal stockpiles of weaponry, it looks like a peaceful revolution will be a very good trick to pull off, indeed.

I do note, however, that the only way to avoid the toxic effects of wealth is to make sure great amounts of it either do not occur or are reduced when they occur. This means that a major function of a democracy is to … wait for it … wait … redistribute wealth away from the wealthy. Unfortunately, our governments have been captured by the wealthy who have been busy redistributing wealth to the wealthy for the past 40 years.

My only hope to avoid large scale violence is that the GOP’s paymasters will so overplay their hand that there will be a quasi-socialist revolution that will give power back to the people and defang the wealthy elites now running the show. My preference is for new political parties (two at least) as the ones we have have failed miserably and have too much baggage to carry into the future.

December 29, 2017

Monotheism Only an Inch Deep

I noted in my reading the other day that the Catholic Church fell all over itself finding a person named Brigit to canonize after the church took over Ireland. St. Brigit’s declared feast day just happened to coincide with the feast day of the Celtic goddess Brigit. An amazing coincidence, no? And, of course, there is some debate over whether St. Brigit was a real person. So, if you can’t find an appropriate real person to canonized, canonize a fake person.

This was the same procedure used by the Romans when they conquered a new people. All of that people’s gods were swept up into the mix of Roman gods. Some equivalences to Roman gods might be noted but if there were a passel of absolutely new ones, well, the more the merrier. The master administrators the Romans were almost guaranteed there would be an office to keep all of these gods straight, and of course there was, a significant one.

It is puzzling that the Romans eventually adopted a monotheistic religion, Christianity, because of all of the problems created by just the idea. Prior to Judaism, polytheism ruled. A few places dabbled in monotheism (Aten in Egypt, etc.) but those efforts failed. Under polytheism, people were quite tolerant of other people’s gods, which made for social harmony. The suite of gods that came with such beliefs had many benefits. While most of these systems had an over-ruling Big Kahuna god (Odin, Zeus, Jupiter, Brahman, etc.), those gods were rarely called upon for help. The lesser gods were much more approachable because they specialized. Each was the god of this or the god of that. If you wanted a good crop of olives this coming season, a believing Greek didn’t go to Ares, the God of War for that; they went to Demeter, the goddess of the harvests. So, there was a built-in incentive to learn all about the appropriate gods and how to beseech them. Also, since there were so many gods and goddesses, there was no Problem of Gender of just the one god. Both feminine and masculine qualities were recognized in gods.

And, if there was a drought, or crop failure, or devastating storm while at sea, the big god didn’t get blamed for that. The smaller gods were notoriously capricious and it never shocked anyone when one of these acted up. As a consequence, there was no “Problem of Evil” to deal with. There was little to no conflict (jealousy, yes; open conflict no) between faiths; many coexisted side-by-side. Like I said, social harmony, much valued by the Romans and all other empires.

Along comes Christianity, a form of monotheistic Judaism on steroids, and all of a sudden, things were quite different. Jews and Christians did not tolerate other religions at all. They refused to acknowledge the divinities of any of the Roman emperors, which was the primary cause of their persecutions by the Romans. The Romans thought them more than a little problematic because of this, so why embrace them?

I suspect Constantine was trying mightily to hold a shaky Roman empire together and thought that bringing Christianity into the fold might normalize their relations with the state. Basically, taking an unruly, more and more powerful group, and co-opting them. (Christianity was not adopted as the state religion of Rome until later. Constantine made it a state religion of Rome.)

The problems inherent in harmonizing a monotheistic religion, though, were quite great. As far as the people were concerned, if there were only one god, then that god was responsible for all of the bad things that happened as well as the good things (aka the Problem of Evil).

The Catholic Church (and all other Christian churches) solved this problem by making the veneer of monotheism so thin as to be almost invisible. Christians, for examples, had more than a few wars over the creation of the trinity: three gods in one! These are not three gods! There can only be one god, so these three … well, it’s complicated. There are not just three versions or manifestations or disguises of the one god. Zeus could walk the Earth as a bull or swan, and still be Zeus; now that was a disguise. The Trinity was and is … a mystery … three gods of one essence, whatever the heck that means. (I think it means “one, not three,” and nothing else.)

Because there was only one god, one had to approach the “all mighty” for even the most trivial of favors, the things always done by demigods in the polytheistic religions. So, Christianity (and Judaism) invented all kinds of god helpers. There were angels and archangels and cherubim, seraphim, and whatnot. What are these other than demi-gods? And to cover the Problem of Evil, Satan was invented. Here is a god if there ever was one. Imagine a being responsible for all of the evil, temptation, and lies, and Republican politics in the entire world … but He is not a god, nope; there is only one god. In any polytheistic suite of gods, Satan would be a major god.

Then there are the Saints. Christians scoff at Roman emperors deifying themselves. (Actually, they had to be dead first, so they had people to do that form them … there were forms to be filled out, rituals and sacrifices to do, etc.) What are saints but deified humans?

St. Brigit of Ireland is apparently a “patron” saint of Ireland, which is another way to say “important” and “popular.” Brigit started out as a Celtic god and ends up being a Catholic saint, serving the exact same purpose: providing a mechanism to appeal to the god(s) for favors. Why bother “Him” if you can pray to a saint to get a small job done.

So, Christianity is “monotheistic” in name only. In its structures, even the Protestant structures with no saints and whatnot, it is still quite polytheistic. This is why Yahweh/Jesus cannot do away with Satan, even though He created Satan. To do so would give the people no source for all of the evil in the world other than Yahweh/Jesus.

Always give the people what they want, otherwise they will turn on you. This is an inherent principle in the structure of all scams. The scam is to appear to give them what they want, without actually giving them anything. A mob “protection” racket is a prime example. For just a small or maybe large fee, the mob will protect your business. Who will they be protecting your business from? The mob, of course.

Some wonder why I spend so much time discussing religion in a class war blog. I do so because religion is one of the, if not the, primary control mechanisms by which the “elites” extract wealth from the masses (us). The current mainstream religion of the U.S. insists that each of us is weak and sinful and can only be saved by turning over all of our decisions to them. Saved from whom? Guess.

And the primary message is that when you die, you will be rewarded and your enemies punished but, whatever you do now while you are alive, just don’t rock the boat. Too may elites are dependent upon your passivity! Remember, you are unworthy … as one evangelist puts it “God only requires from you the honesty to admit that you are morally and spiritually a failure. You can come to Christ just as you are.” He will accept scum like you, but only if you accept someone else controlling your life. Their class (the religious and secular elites) are making war on our class (the hoi polloi/you and me) and their religion is a tool of the oppressors.

A Note on Original Sin Many Christians believe in Original Sin as the source of mankind’s sinfulness. Sin is defined as a transgression of the law of their god. But the Bible describes what is called the War of the Angels, who rebelled against God’s will by refusing to bow down to mankind on the occasion of the creation of man. So, how original could Adam and Eve’s sin be if there were angels transgressing God’s law well before their “fall?” For those who therefore claim that Adam’s sin must have come first; if that were so why would God demand his angels, his perfect heavenly angels, bow down to such sinful creatures? It seems a stupid idea, no?

It seems, rather, that disobedience of Yahweh’s will was commonplace, not something that was so heinous that it should become heritable by all humans … unless, unless you wanted to beat people’s spirits down so low they would jump at a chance of salvation by doing what you tell them to do. (Luigi and Salvatore, your local protection insurance payment collectors, would be proud.)

December 20, 2017

We Have Morons Running Our Governments

One of the responses from those in the federal government who were told they could no longer use certain wordsand terms, such as fetus, science-based, climate change, or evidenced-based, responded with “Can we still use moron?” One of the functions of a bureaucracy is to resist change. Ours seems to still be working.

The Republican Party, like the Democratic Party, has stripped away its bureaucracies in favor of … what? The GOP seems now to be run under the influence of deep thinkers, such as Murray Rothbard, an inspiration to many, including the Koch brothers. Rothbard has asked “What is the State anyway but organized banditry? What is taxation but theft on a gigantic, unchecked scale?” According to this intellectual giant, we need to finance all of our collective efforts with bake sales or maybe “I’ve got an idea, gang; let’s put on a show!”

In their world, a person works as an individual and pays all who help him/her, being indebted to no one and then accrues wealth in the form of a pile of gold in the corner of his living room. But they also believe that if they were to die unexpectedly, that their wives and children should then “own” that wealth. But the wives and children didn’t earn that wealth, why should they have any claim to it at all? These conservative savants believe in inheritance, you see, which is a legal thing and immediately their personal philosophy is in trouble. I remember a very wealthy man who left almost all of his wealth to charity when he died, because he didn’t want to deprive his children of the experience of having to work for a living.

Is there any evidence of a culture or society in which there was no form of tax or extracted labor? I do not know of one. If we have collective needs, they must be paid for collectively. Even the libertarian radicals recognize collective needs in the form of the militaries and courts, so how are we to pay for these?

The government is “us” acting collectively. In order for it to work we, collectively, have to have respect for individuals … and individuals, individually, have to have respect for “us.” One of our major political parties has bought into the first, but not the second part of that statement, which means our democracy is in peril. (Guess which one, go ahead, guess …)

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 …

December 17, 2017

Oh, Boy, Oh, Boy … We’re Number One!

Filed under: Economics,Politics — Steve Ruis @ 10:21 am
Tags: , , , ,

The U.S. is demonstrating our exceptionalism to the rest of the wold not only by making war around the globe, but also now we are number one in income and wealth inequality.

Since 1980, when western Europe and the U.S. showed similar levels of inequality, the gap between the richest and the rest has surged in the U.S., while in western Europe it has increased only moderately.

In both regions, the top 1% of adults earned about 10% of national income in 1980. Today that cohort’s share has risen modestly to 12% in western Europe, but dramatically to 20% of all income in the US. The good times have been especially good for those at the very top in the U.S., with annual income booming by 205% since 1980 for the top 1%, and by 636% for the top 0.001%.

The American population … has it benefited from this wealth trickling down? Nope, the average annual wage of the bottom 50% has stagnated since 1980 at about US$16,000 per adult (after adjusting for inflation and before taking into account taxes and transfers). The idea of trickle down economics was a scam and still is a scam, perpetrated by the elites on the masses. It’s as it this is a tale of two countries: the top half has been growing at roughly the same rate as China, while for the 117 million American adults in the bottom 50%, income growth has been nonexistent for a generation. In western Europe, by contrast, incomes of the bottom half have matched overall economic growth over the last quarter of a century.

The takeway is very simple. For any of the sniveling, GOP dollar sucking economists who try to explain this away as due to “globalization,” or “automation,” or any other phenomenon, their arguments are bogus, because if those arguments were true, the effect on the U.S. and, say, Canada, or western Europe would be roughly similiar … and they are not. They may be having an effect, but they cannot explain the large increase in wealth and income inequality being experienced.

The real reason is class war. The wealthy have captured the mechanisms of government and have used them to benefit the wealthy above and beyond anyone else. If you desire any proof exaimne the Trump administration’s actions. Exhibit No. 1 is the tax bill currently being rammed through Congress. At least 40% of the benefits will go to the top 1%. If you look at the actions taken since its inception, the adminstration has done everything to advantage corporations and rich people and nothing to help the poor or middle class.

And they only call it “class warfare” when we fight back. When will we begin to fight? Or will we just be ground into dust as has happened so often in the history of civilization?

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