Class Warfare Blog

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.

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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 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.

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 …

November 28, 2017

Why Republicans are Republicans and Democrats are Democrats

When this country was created “of the people, by the people, and for the people,” it was created by a fairly elite group of men. They made sure that a stable society and government was provided for by making sure that Indians, slaves, and women did not get to vote, nor did poorish men. You needed land to qualify to vote, meaning you had to be an elite or near-elite member of society to cast a ballot.

The Founders felt that the very best people to run the government were people just like themselves: well-educated, wealthy men who had the leisure time to reflect on the issues of the day and didn’t have to devote every waking moment to find food and shelter.

They were worried about the affect of wealth on their new government, so this reinforced their suitability for leadership as they were already wealthy and would, therefore be hard to bribe. (Ha! Just raises the price in my estimation.) They were concerned that the “middling” sorts (merchants, tradesmen,, craftsmen, etc.) would get involved and that they could be bought. (They would be proud to know that Congress is literally stuffed with millionaires now!)

In other words they were elitists. They created a government “of the elites, by the elites, and for the elites,” no question.

Those of a conservative bent ended up forming political parties (the Whigs, the Republicans, etc.) that wanted to preserve society’s institutions and hence ensure a stable, secure society. They, like the Founders, thought that this would be achieved by the wealthy being wealthy and the poor being poor, and as long as everyone accepted his lot in life, all would be well. Since the poor were poor and had very few needs, they focused on serving the wealthy as their needs were so much greater. The wealthy needed a court of law and a set of laws to govern their business contracts. They needed trade laws and other laws of commerce. They needed government regulations of banks and markets. The poor made no such demands.

The Democrats had to necessarily differentiate themselves from these conservatives, so they had to adopt stances less favorable to the elites and more egalitarian, just to be different enough to attract votes.

Now I know that this is much more complicated, that there are and were cliques, and factors, and movements, oh my! But at the core, this is what the two major parties in this country stand for. (Or stood for, before the Democrats began selling out to wealthy interests.) If you look at any issue now, you can parse it for these stances. Take the current “Net Neutrality” issue. Current the Internet is quite egalitarian, on a first-come, first-serve basis. There is a movement afoot, to drop this policy so that certain streams of information can be favored while others disfavored. (Guess who gets to choose!). The people behind this are the wealthy leaders of the giant telecom industries. The people against are net rights activists, aka the Internet masses.

So, now that I have given you this information, which party is against net neutrality, in your opinion? If you guessed the GOP, you got it in one! Another way to look at this is, if the GOP is for it, it serves to maintain the elite in their current, or even elevated, status. The elites are the business owners, not its workers.

The founders believed in providence, that is if they were wealthy it was because they were superior to the others and the cause was divine providence. (God controls all things and wouldn’t make an asshole wealthy, now would he?) Today’s elites still have this belief: their wealth identifies them superior (even when they inherit it!) and if they are superior, who better to run things?

The secular and religious elites promote only programs/legislation that enhances their status and positions as elites. They are able to con ordinary folks into voting with them by advancing dishonest campaigns (They want to take away your guns! They are baby murderers! There is a war on Christmas!).

Consider the current administration’s “tax reform” plan. They started out saying they were going to simplify the tax structure and then offered a plan that made it more complex and, by all accounts, advantages the wealthy. (If the GOP is for it … duh.) Plus, they are willing to lie and cheat to get the bill passed, which the elites have always been willing to do, because, well, they know better what is needed.

So, pick any particular issue you want: if the GOP is in favor, then it favors the elites; if the Democrats are in favor, it disfavors the elites. It is that simple because the core motivations are that simple. This is changing as I write this as more and more Democrats are captured by the wealthy class to serve their interests. If the elites capture the Dems, then we might as well carve “of the elites, by the elites, and for the elites” in stone in the capital and have done with it.

 

November 24, 2017

Harari Infuriates Again

I am working my way through “Sapiens” by Yuval Harari and I apologize for posting about it over many moons, but when I read something profound (or profoundly upsetting) I set aside the book for a bit to let the ideas percolate and see what gestates from that. (We do not create our thoughts, although we do give words to them to be able to communicate them.)

I have mentioned before what I perceived as perversity in Mr. Yuval’s book. This is another example.

He was pointing out that no one has natural rights, which is why we claim they come from some god or other. He quotes Voltaire (“There is no God, but do not tell my servant lest he murder me at night.”) and others as to the role religion plays in controlling the masses. He goes on to quote Talleyrand on why physical coercion alone won’t be enough to control people (“You can do many things with bayonets, but it is rather uncomfortable to sit on them.” and “A single priest does the work of a hundred soldiers, far more cheaply and effectively.”) and that religion is as or more useful than physical threat. Yuval concludes that some beliefs/memes, etc. are needed to keep people functioning as soldiers, e.g. honor, country, manhood, God (On our side!), motherhood, etc. and by extension as participating members of a stable society.

But then he goes on to consider the people at the top of the pyramid, the elites. He asks: “Why should they wish to enforce an imagined order if they themselves do not believe in it?” Okay, now we are cooking! He continues in the next sentence: “It is quite common to argue that the elite may do so out of cynical greed.”

Bingo … but …

Yuval then continues to dismiss this statement implicitly by perversely arguing that it could not be “cynical” because the Cynic philosophers had no ambition, and the elites do. This has to be willful obtuseness on the author’s part. Any dictionary would have told him that when ordinary people use the word cynical they are referring to it being “contemptuously distrustful of human nature and motives,” not some harkening to the Greek philosophical school of the Cynics. He then goes on to conclude that the elites have to have their beliefs, too.

Argh!

The key word in “cynical greed” is greed, not cynical. And he sloughs off the greed aspect because, well, what? Getting too close to criticizing the elites can be dangerous? He just leaves it hanging.

Of course, the elites have their beliefs and memes. This is how they communicate without having a Central Committee somewhere issuing orders. The elites believe: that because they are wealthy (or pious) they are special; they are better than the hoi polloi because they show mastery over their environment (through their wealth and power it gives them); because they are better, who better to determine the course of society, to lead. Their wealth is a manifestation of their innate abilities in all things, even if they inherited their wealth. Obviously, the elites have their beliefs and memes.

But beliefs and memes aren’t motives. Greed is a motive. It needs no beliefs or memes to support it. Why do you think it is that religions condemn greed? Because this is what the elites want the masses to believe. First, they do not want competition. If religions preached “Greed is Good!” (The Church of Gordon Gecko?), more people would practice it and the ranks of the elites would swell and there would be less wealth in a share. Second, the elites do not believe greed is bad and they want the masses to think that if the elites appear to be greedy, that they will be punished … by the god(s). As long as the masses take no action upon themselves, the elites are good with that. Accepting divine punishment is perfectly fine if you don’t believe in divines.

The correct follow-up to “It is quite common to argue that the elite may do so out of cynical greed” is “This is indeed the simplest answer … but the elites need a way to communicate with others in their class, so beliefs and memes are shared as a form of signaling.”

 

November 22, 2017

The Estate Tax: Who Needs It?

Our president’s tax proposal proposes to do away with the “Estate Tax,” known in the GOP as “The Death Tax.” Let me explain how it works:

Do you and your spouse have an estate worth $11,000,000? If so, if both of you were to die, then the estate tax would kick in. Do you know how much you would pay? A lot, right? No, it is $0.00. The eleven million is basically a deduction (actually it is currently 10.98 million dollars, but I rounded off because I know how little you like math).

So, who does the estate tax applied to?

The rich?

(You got it in one try. I am so proud of you!)

In other words I am guessing, just guessing now, that it doesn’t apply to you.

So why do we need such a tax?

I will tell you.

The Founding Fathers were very concerned about the power of wealth. They were worried that congressional representatives would be susceptible to bribery. They almost universally detested political parties because they created a win-lose dialog that encouraged people to win at all costs and have loyalty to their party rather than to the country as a whole. (Smart, weren’t they.)

The estate tax is to discourage great wealth being passed from generation to generation. But hey, the wealthy earned that money, right? True, but the kids inheriting it did not. And the State (meaning “us”) have an interest in avoiding  huge fortunes being amassed.

Consider the Walton family. Sam Walton created the Wal-Mart chain and when he died, he left $100,000,000,000 to his heirs. Today, his half a dozen or so kids and grand kids have fortunes ranging from just under $7 billion to just under $40 billion. It is pretty clear that Sam Walton made most of that money and the kids are living off of interest (primarily as owners of a 50+% share of all Wal-Mart stock).

Just so you will know, if you wanted to spend a billion dollars in a calendar year, you would have to spend $532,000 per hour for every working hour of every working day to pull that off. It is a great deal of money.

Had the estate tax of 40% have kicked in (it didn’t; Sam had lawyers—”Only morons pay estate tax,” at least according a WH official, something that needs attention under the heading a Tax Evasion), his heirs would have “only” received $60 billion rather than the full $100 billion. Would they have suffered? I hardly think so. And $40 billion dollars could fund the CHIP program or something equally worthy.

Need I remind you that being a billionaire involves having at least a thousand million dollars; you would be a millionaire one thousand time over? Oh, the Walton clan made $8.7 billion in 2016 off of their stock, that wasn’t have been taxed away as estate tax. So, I think one can say old Sam provided for his family.

So, what have the Walton heirs done with their money?

Well, they oppose a minimum wage increase. Can’t be having all of those Wal-Mart employees getting paid a living wage. Where would all of the money to pay them come from?

They have a track record of charitable giving, but not exactly in proportion to their income.

They are interested in education reform. Guess how? Too late—charters, charters, charters, vouchers, kill the teachers’ unions.

In a country in which money is power—in math terms that’s MONEY ≡ POWER, where means ≡ “is identical to”—it is dangerous to allow individuals to accumulate too much power over the rest of us.

If the rich complain that the government will just waste the money, we can apply those taxes directly to the military budget … if they want.

 

PS This is why I do not shop at Wal-mart. Wal-mart is a major oppressor of its employees, refusing a pay a small part of what they earn to the people who earn it for them. They would rather counsel them on government programs for the “needy” for which they qualify. Assholes.

November 21, 2017

We’re No. 1 … We’re No. 21! Wait … WTF?

The new 2017 Credit Suisse Global Wealth Report helpfully calculates median net worths of countries. Switzerland and Australia top the global list. (Reminder: a median is the value in the middle, not an arithmetic average.) The median Swiss adult has a net worth of $229,000. The typical Australian, $195,400. And the typical American? A mere $55,876. Twenty nations in all have higher median adult net worths than the United States. So, we are No. 21.

Wait, we’re the richest country in the world, how come we are 21st in median wealth?

The really rich, those with at least $50 million in net worth, have multiplied five-fold since the year 2000 globally. About half of these, 49 percent, reside today in the United States. Credit Suisse counts 72,000 of these ultra-rich Americans. In context: China, the host to the world’s second-highest collection of $50 million-and-up personal fortunes, has only 18,100. The United States hosts more ultra-rich individual fortunes than the nations with next nine highest ultra-rich totals combined.

So, here in the U.S. the rich are getting richer, but the rest of us are falling very far behind.

Let’s consider the Australians, as we have a bit in common.

Australians used to see their nation as a relatively equal society. They don’t anymore. Rising inequality has become a major Australian political issue. But Australia remains far more equal a society than the United States. The top 1 percent in Australia only holds an estimated 15 percent of the nation’s wealth. (In the US, it is 38.6%.) So we are the wealthiest country in the world but we don’t have the wealthiest citizens as most of the wealth has flown into the pockets of a very few people.

And this is not a matter of that they are wealthy, it is what they do with the wealth they have accumulated. Basically, they don’t spend it. Poor people spend all of their money. Middle class people spend almost all of their money. That money goes to buying things from companies who provide jobs for people. The rich don’t spend anywhere near as much of their income. If they buy anything, it is investments which increase their wealth even more. None of that activity positively affects the economy.

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