Forum Post: Are Heartless People Simply Born That Way?
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Are Heartless People Simply Born That Way?
Sunday, 03 November 2013 10:35 By Sam Pizzigati, Too Much | News Analysis
http://truth-out.org/news/item/19780-are-heartless-people-simply-born-that-way
People who cut food stamps - and gut child labor laws - most all had empathy when they came into the world. So what squeezed the empathy out? Analysts are pointing to inequality.
Scrooge has come early this year. We’re kicking our Tiny Tims. This holiday season, kids in America’s poorest families are going to have less to eat.
November 1 brought $5 billion in new cuts to the nation’s food stamp program, now officially known as the Supplemental Nutrition Assistance Program, or SNAP.
Poor families will lose on average 7 percent of their food aid, calculates the Center on Budget and Policy Priorities. A mother with two kids will lose $319 over the rest of the current federal fiscal year. The cuts could cost some families a week’s worth of meals a month, says the chief at America’s largest food bank.
More cuts are looming. A U.S. House of Representatives majority is demanding an additional $39 billion in “savings” over the next decade. Ohio and a host of other states, in the meantime, are moving to limit food stamp eligibility.
Today’s brazen heartlessness toward America’s most vulnerable actually goes far deeper than food stamp cuts, as a new Economic Policy Institute report released last week documents in rather chilling detail.
Four states, the report notes, have “lifted restrictions on child labor.” In Wisconsin, state law used to limit 16- and 17-year-olds to no more than five hours of work a day on school days. The new law erases these limits.
Other states are cutting back on protections for low-wage workers of all ages. Earlier this year, the new EPI survey relates, Mississippi adopted a law that bans cities and counties in the state “from adopting any minimum wage, living wage, or paid or unpaid sick leave rights for local workers.”
The sick and elderly aren’t faring all that well either. In Arizona, the governor proposed a health-insurance cutoff that would have tripped some patients up right in the middle of their chemotherapy. Texas is considering Medicaid cuts that could end up closing 850 of the state’s 1,000 nursing homes.
America’s current surge of mean-spiritedness, observes Gordon Lafer, the University of Oregon author of the EPI study, essentially erupted right after the 2010 elections. In 11 states, those elections gave right-wingers “new monopoly control” over the governor’s mansion and both legislative houses.
Lafer links this right-wing electoral triumph directly to growing inequality. A widening income gap, he explains, “has produced a critical mass of extremely wealthy businesspeople, many of whom are politically conservative,” and various recent court cases have given these wealthy a green light to spend virtually unlimited sums on their favored political candidates.
This spending has, in turn, raised campaign costs for all political hopefuls — and left pols even more dependent on deep-pocket campaign contributions.
But America’s new heartlessness reflects much more than this turbocharged political power of America’s rich. An insensitivity toward the problems poor people face, researchers have shown, reflects a deeper psychological shift that extreme inequality makes all but inevitable.
The wider a society’s economic divide, as Demos think tank analyst Sean McElwee noted last week, the less empathy on the part of the rich and the powerful toward the poor and the weak. In a starkly unequal society, people of more than ample means “rarely brush shoulders” with people of little advantage. These rich don’t see the poor. They stereotype them as lazy and unworthy.
Some cheerleaders for the rich and powerful, adds economist Nancy Folbre, go even further. They attribute unemployment and sluggish growth “to excessively generous public assistance.” Cutting food stamps, for these self-righteous souls, comes to seem an easy solution to all that ails a failing American economy.
Defenders of inequality typically do their musings at a high, fact-free level of abstraction. CNN columnist John Sutter last week brought America down to inequality’s ground level, with a remarkably moving and insightful look at the most unequal county in the United States, East Carroll Parish in Louisiana.
In East Carroll, the rich live north of Lake Providence, the poor south. The two groups seldom interact. East Carroll’s most affluent 5 percent average $611,000 a year, 90 times the $6,800 incomes the poorest fifth of the parish average. Such wide income gaps, Sutter shows, invite “gaps in empathy.”
“Looking across Lake Providence from the north,” as he puts it, “can warp a person’s vision.”
One example of this warped vision: East Carroll’s rich see food stamps as an “entitlement” that rots poor people’s incentive to work. Yet these same affluent annually pocket enormously generous farm subsidies. In 2010, East Carroll’s most highly subsidized farmer grabbed $655,000 from one federal subsidy alone.
The average food stamp payout in the parish: $1,492 per person per year.
What should we do about the rampant inequality in East Carroll Parish — and far beyond? For simple starters, of course, we could end federal farm subsidies for wealthy farmers — and restore food stamps to full strength.
The longer-term task? CNN’s John Sutter has some ideas on that score. He offered last week an eclectic short list that includes everything from raising taxes on the nation’s most privileged to raising minimum wages for the nation’s least.
In 2013 America, sums up Sutter, we’ve come to see stark gaps between rich and poor as “inevitable.” His simple reminder for us all: “They don’t have to be.”
For more on the research that explores how inequality “weakens the willingness to share,” in the words of economist James Galbraith, and concentrates resources that could be shared in the “hands least inclined to be willing,” check “The Fraying Social Fabric,” a chapter now available online from the 2004 book, Greed and Good: Understanding the Inequality that Limits Our Lives.
This piece was reprinted by Truthout with permission or license.
Inside the Psyche of the 1%
Sunday, 03 November 2013 00:00 By Don Fitz, Synthesis/Regeneration | Op-Ed
http://truth-out.org/opinion/item/19776-inside-the-psyche-of-the-1
The Bank Guarantee That Bankrupted Ireland
Monday, 04 November 2013 09:14 By Ellen Brown, Web of Debt Blog | News Analysis
http://truth-out.org/news/item/19790-the-bank-guarantee-that-bankrupted-ireland
The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15th and 16th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated.
Today, Ireland is under a different sort of tyranny, one imposed by the banks and the troika—the EU, ECB and IMF. The oppressors have demanded austerity and more austerity, forcing the public to pick up the tab for bills incurred by profligate private bankers. The official unemployment rate is 13.5%—up from 5% in 2006—and this figure does not take into account the mass emigration of Ireland’s young people in search of better opportunities abroad. Job loss and a flood of foreclosures are leading to suicides. A raft of new taxes and charges has been sold as necessary to reduce the deficit, but they are simply a backdoor bailout of the banks.
At first, the Irish accepted the media explanation: these draconian measures were necessary to “balance the budget” and were in their best interests. But after five years of belt-tightening in which unemployment and living conditions have not improved, the people are slowly waking up. They are realizing that their assets are being grabbed simply to pay for the mistakes of the financial sector. Five years of austerity has not restored confidence in Ireland’s banks. In fact the banks themselves are packing up and leaving. On October 31st, RTE.ie reported that Danske Bank Ireland was closing its personal and business banking, only days after ACCBank announced it was handing back its banking license; and Ulster Bank’s future in Ireland remains unclear.
The field is ripe for some publicly-owned banks. Banks that have a mandate to serve the people, return the profits to the people, and refrain from speculating. Banks guaranteed by the state because they are the state, without resort to bailouts or bail-ins. Banks that aren’t going anywhere, because they are locally owned by the people themselves.
The Folly of Absorbing the Gambling Losses of the Banks Ireland was the first European country to watch its entire banking system fail. Unlike the Icelanders, who refused to bail out their bankrupt banks, in September 2008 the Irish government gave a blanket guarantee to all Irish banks, covering all their loans, deposits, bonds and other liabilities.
At the time, no one was aware of the huge scale of the banks’ liabilities, or just how far the Irish property market would fall. Within two years, the state bank guarantee had bankrupted Ireland. The international money markets would no longer lend to the Irish government.
Before the bailout, the Irish budget was in surplus. By 2011, its deficit was 32% of the country’s GDP, the highest by far in the Eurozone. At that rate, bank losses would take every penny of Irish taxes for at least the next three years.
“This debt would probably be manageable,” wrote Morgan Kelly, Professor of Economics at University College Dublin, “had the Irish government not casually committed itself to absorb all the gambling losses of its banking system.”
To avoid collapse, the government had to sign up for an €85 billion bailout from the EU-IMF and enter a four year program of economic austerity, monitored every three months by an EU/IMF team sent to Dublin.
Public assets have also been put on the auction block. Assets currently under consideration include parts of Ireland’s power and gas companies and its 25% stake in the airline Aer Lingus. At one time, Ireland could have followed the lead of Iceland and refused to bail out its bondholders or to bow to the demands for austerity. But that was before the Irish government used ECB money to pay off the foreign bondholders of Irish banks. Now its debt is to the troika, and the troika are tightening the screws. In September 2013, they demanded another 3.1 billion euro reduction in spending. Some ministers, however, are resisting such cuts, which they say are politically undeliverable.
In The Irish Times on October 31, 2013, a former IMF official warned that the austerity imposed on Ireland is self-defeating. Ashoka Mody, former IMF chief of mission to Ireland, said it had become “orthodoxy that the only way to establish market credibility” was to pursue austerity policies. But five years of crisis and two recent years of no growth needed “deep thinking” on whether this was the right course of action. He said there was “not one single historical instance” where austerity policies have led to an exit from a heavy debt burden. Austerity has not fixed Ireland’s debt problems. Belying the rosy picture painted by the media, in September 2013 Antonio Garcia Pascual, chief euro-zone economist at Barclays Investment Bank, warned that Ireland may soon need a second bailout.
According to John Spain, writing in Irish Central in September 2013:
The anger among ordinary Irish people about all this has been immense. . . . There has been great pressure here for answers. . . . Why is the ordinary Irish taxpayer left carrying the can for all the debts piled up by banks, developers and speculators? How come no one has been jailed for what happened? . . . [D]espite all the public anger, there has been no public inquiry into the disaster.
Bail-in by Super-tax or Economic Sovereignty?
In many ways, Ireland is ground zero for the austerity-driven asset grab now sweeping the world. All Eurozone countries are mired in debt. The problem is systemic.
In October 2013, an IMF report discussed balancing the books of the Eurozone governments through a super-tax of 10% on all households in the Eurozone with positive net wealth. That would mean the confiscation of 10% of private savings to feed the insatiable banking casino.
The authors said the proposal was only theoretical, but that it appeared to be “an efficient solution” for the debt problem. For a group of 15 European countries, the measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.
A review posted on Gold Silver Worlds observed:
[T]he report right away debunks the myth that politicians and main stream media try to sell, i.e. the crisis is contained and the positive economic outlook for 2014.
. . . Prepare yourself, the reality is that more bail-ins, confiscation and financial repression is coming, contrary to what the good news propaganda tries to tell.
A more sustainable solution was proposed by Dr Fadhel Kaboub, Assistant Professor of Economics at Denison University in Ohio. In a letter posted in The Financial Times titled “What the Eurozone Needs Is Functional Finance,” he wrote:
The eurozone’s obsession with “sound finance” is the root cause of today’s sovereign debt crisis. Austerity measures are not only incapable of solving the sovereign debt problem, but also a major obstacle to increasing aggregate demand in the eurozone. The Maastricht treaty’s “no bail-out, no exit, no default” clauses essentially amount to a joint economic suicide pact for the eurozone countries.
. . . Unfortunately, the likelihood of a swift political solution to amend the EU treaty is highly improbable. Therefore, the most likely and least painful scenario for [the insolvent countries] is an exit from the eurozone combined with partial default and devaluation of a new national currency. . . .
The takeaway lesson is that financial sovereignty and adequate policy co-ordination between fiscal and monetary authorities are the prerequisites for economic prosperity.
Standing Up to Goliath
Ireland could fix its budget problems by leaving the Eurozone, repudiating its blanket bank guarantee as “odious” (obtained by fraud and under duress), and issuing its own national currency. The currency could then be used to fund infrastructure and restore social services, putting the Irish back to work.
Short of leaving the Eurozone, Ireland could reduce its interest burden and expand local credit by forming publicly-owned banks, on the model of the Bank of North Dakota. The newly-formed Public Banking Forum of Ireland is pursuing that option. In Wales, which has also been exploited for its coal, mobilizing for a public bank is being organized by the Arian Cymru ‘BERW’ (Banking and Economic Regeneration Wales).
Irish writer Barry Fitzgerald, author of Building Cities of Gold, casts the challenge to his homeland in archetypal terms:
The Irish are mobilising and they are awakening. They hold the DNA memory of vastly ancient times, when all men and women obeyed the Golden rule of honouring themselves, one another and the planet. They recognize the value of this harmony as it relates to banking. They instantly intuit that public banking free from the soiled hands of usurious debt tyranny is part of the natural order.
In many ways they could lead the way in this unfolding, as their small country is so easily traversed to mobilise local communities. They possess vast potential renewable energy generation and indeed could easily use a combination of public banking and bond issuance backed by the people to gain energy independence in a very short time.
When the indomitable Irish spirit is awakened, organized and mobilized, the country could become the poster child not for austerity, but for economic prosperity through financial sovereignty. This piece was reprinted by Truthout with permission or license.
The Superrich Don't Need Our Middle Class Infrastructure
Monday, 04 November 2013 15:36 By The Daily Take, The Thom Hartmann Program | Op-Ed
http://truth-out.org/opinion/item/19814-the-super-rich-dont-need-our-middle-class-infrastructure
America is falling apart - and this nation's super-rich are to blame.
There was once a time in America when the super-rich needed you, and me, and working-class Americans to be successful.
They needed us for their roads, for their businesses, for their communications, for their transportation, as their customers, and for their overall success.
The super-rich rode on the same trains as us, and flew in the same planes as us. They went to our hospitals and learned at our schools. Their success directly depended on us, and on the well-being of the nation, and they knew it.
But times have changed, and the super-rich of the 21st century no longer think that you and I are needed for their continued success. And in some ways, they have given up on America, period. As Paul Buchheit brilliantly points out over at AlterNet, "As they accumulate more and more wealth, the very rich have less need for society. At the same time, they've convinced themselves that they made it on their own, and that contributing to societal needs is unfair to them. There is ample evidence that this small group of takers is giving up on the country that made it possible for them to build huge fortune."
Buchheit goes on to say that, "The rich have always needed the middle class to work in their factories and buy their products. With globalization this is no longer true... They don't need our infrastructure for their yachts and helicopters and submarines. They pay for private schools for their kids, private security for their homes. They have private emergency rooms to avoid the health care hassle. All they need is an assortment of servants, who might be guest workers coming to America on H2B visas, willing to work for less than a middle-class American can afford"
Unfortunately, these millionaires and billionaires who have given up on America and on the working class are in control of the political process in this country.
They have brainwashed Republicans into thinking that the success of working-class Americans no longer matters for the future of this nation.
As a result, Republicans are no longer investing in things that have traditionally made America - and the working-class - successful.
Take America's infrastructure for example - or lack thereof.
According to the American Society of Civil Engineers annual report card on America's infrastructure, America's infrastructure is a mess. Our roads are falling apart, our transportations systems are in turmoil, and our energy and electrical systems are stuck back in the 1900's.
A new graph released by investment research firm BCA shows why. Non-defense related infrastructure spending was around $325 billion per year when George W. Bush stepped foot inside of the White House.
Today, it's around $235 billion per year, a $90 billion drop in funding from when Bush took office.
Republicans, brainwashed by America's super-rich, have repeatedly refused to fund comprehensive infrastructure spending bills, all in the name of austerity.
But cutting funding to the nation's infrastructure isn't the right way to address American's debt or spending problems. And it certainly isn't the right way to rebuild this nation.
As Cardiff Garcia over at The Financial Times points out, "It's also likely that much of the investment that has been forgone in the name of fiscal consolidation will have to be made eventually anyways - only it will be made when rates are higher, exacerbating the long-term fiscal outlook rather than improving it. And as Think Progress points out, "continued underfunding in this arena over the coming years will cost businesses a trillion dollars in lost sales and cost the economy 3.5 million jobs."
The Society of Civil Engineers says that it will take a staggering $3.6 trillion investment by 2020 - or $450 billion per year - to bring the American infrastructure into the 21st century, and to avoid risking a complete infrastructure collapse.
But the super-rich don't care about how much funding is needed to save this country, as long as they have their private schools, private hospitals, private airports and private places.
The super-rich in this country are bleeding working-class Americans dry, while destroying the infrastructure of the nation that has done so much for their success.
No matter what Jamie Dimon, Charles Koch, or Shelly Adelson will tell you, America's wealthy elite did not make their fortunes on their own.
Without a strong economy and infrastructure, America's millionaires and billionaires would not be where they are today. It's that simple. So what can we do right now to rebuild America's infrastructure and give a boost to the American economy?
First, it's time to bring an end to globalization.
We need to be protecting American jobs, instead of letting the super-rich ship them overseas and build factories in China and third-world countries.
But more importantly, we need to roll-back the Reagan tax cuts, and make sure that America's wealthy elite are paying their fair share to support our economy and infrastructure.
Right now, the burden for rebuilding America is on the backs of working-class Americans, and that's just wrong.
It's ridiculous that working-class Americans struggling to survive day-to-day are paying more in taxes than billionaire banksters and oil tycoons.
A lot has changed in America over the past 100 years or so but one thing remains the same: The success of the super-rich still depends on the success of you and me.
The super-rich still need us for their roads, for their businesses, for their communications, and for their transportation.
Our infrastructure may be crumbling, but there's still time to get America back on the road to success.
We're all in this together.
This article was first published on Truthout and any reprint or reproduction on any other website must acknowledge Truthout as the original site of publication.
Blaming the Poor for Poverty
Monday, 04 November 2013 09:09 By Lawrence Davidson, To the Point Analyses | News Analysis
http://truth-out.org/news/item/19789-blaming-the-poor-for-poverty
Most of the poverty in the United States is artificially manufactured. It is poverty created in the pursuit of “free market ideals,” expressed in recent times by the imposition of neoliberal economic policies – the sort of policies that cut taxes on the wealthy, do away with fiscal and other business regulations, shred the social safety net, and erode middle-class stability – all while singing the praises of self-reliance and individual responsibility.
As a result we have done very well in making the rich richer and the poor both poorer and more numerous.
How many poor people are there in the United States? According to Current Population Survey (CPS), which puts out the government’s official figures, as of 2012 about 15 percent of the population, or some 46.5 million people, were living in poverty. The rate for children under 18 comes in higher, at about 21.8 percent.
The U.S. government measures poverty in monetary terms. In 2012 poverty was defined as yearly total income of $23,050 or less for a family of four. The figure is adjusted for individuals or other size families. Then there is the depressing fact that “most Americans (58.5 percent) will spend at least one year below the poverty line at some point between the ages of 25 and 75.”
There happens to be more than one level to this economic version of hell, and so we should take note of the category of “deep poverty.” Deep poverty is defined as having an income that is 50 percent of the official poverty level. This part of the population is growing. In my area, which takes in southeast Pennsylvania and southern New Jersey, the percentage in deep poverty runs from 5 to 19 percent, depending on the county. These are people who, according to social service and charity workers, “have given up hope” and “given up on finding jobs.”
Consider what all this really means. Our economic system is condemning at least 48.5 million people to high rates of un- or underemployment, poor performance in school and at work (when it is available), poor nutrition and eating habits, high instances of drug abuse, high crime rates, homelessness, high rates of preventable diseases, shorter life-spans, and all the other vicissitudes typically associated with a life of poverty.
Yet neoliberals and their allies would say none of this is society’s fault or responsibility, rather it is the fault of the individual who, living in a “free” economic environment, makes his or her own choices and then must live with the consequences.
Well, that is one particularly inhumane way of looking at the situation. However, we have proof from relatively recent U.S. history that poverty can be ameliorated through government action without seriously disrupting “market choice.”
Back in the mid-1960s millions of citizens marched on Washington for “jobs and freedom,” and President Lyndon Johnson responded with his War on Poverty programs. Those programs reduced poverty significantly and did so without transforming the U.S. into a socialist republic. Unfortunately, this momentum was not to last.
Two things brought it to a crashing halt: a murderous war in Vietnam and the tragically wrongheaded neoliberal economic policies mentioned above. We are still stuck in this rut. We are still at war (though now it is in the Middle East) and our economic policies continue to be self-destructive.
Cognitive Dysfunction
The neoliberal outlook is demonstrably wrong in a significant way. The notion that the poor can make “free and rational choices” and thus can be held responsible for their situation is incorrect. There is accumulating evidence that poverty literally “messes with your mind” in a way that obstructs responsible choices.
In fact, the “free market” contributes to an environment that makes the poor decidedly unfree: confused, preoccupied, and feeling overwhelmed and hopeless. In other words, being poor makes you cognitively dysfunctional.
The latest research to show this was published in August 2013 in the journal Science and is titled “Poverty Impedes Cognitive Function.” The gist of the argument is, “Poverty captures attention, triggers intrusive thoughts, and reduces cognitive resources.” In other words, the more preoccupied one is with troubles, the less able one is to muster the “cognitive resources” necessary to rationally “guide choice and action.”
Most people find themselves overwhelmed with problems now and then, but not constantly. What living in poverty does is to hit a person with a toxic cocktail of overwhelming problems day in and day out: financial problems, health problems, parenting issues, victimization by criminals and others, and the problem of just finding and keeping a job.
The authors also point out that the IQ difference between those living in poverty and those living above the poverty line can be as high as 13 points. This difference is not a function of genetics or race. It is created by the environment of poverty itself.
This study is political dynamite. It lends support to the assertion that as long as neoliberal economics claims our allegiance, we will continue to condemn tens of millions of our citizens to a life not only of want, but also of high anxiety and poor cognitive ability. This puts the lie to the popular myth that the poor are disadvantaged because most of them are congenitally lazy.
It likewise challenges the conclusions of such works as Richard Herrnstein and Charles Murray’s The Bell Curve, which attributed at least part of the statistical difference in intellectual performance between American blacks and white to genetics. In truth, whatever statistical difference there is does not reflect inherent intellectual ability so much as high levels of long-term stress, which reduces a person’s ability to develop and apply their cognitive strengths. It is quite interesting how the authors of the Science article conclude their piece. As it turns out, they have chosen to sidestep the real implications of their own data. Thus, they tell us “this perspective has important policy implications. First, policy-makers should beware of imposing cognitive taxes on the poor.”
What does that mean? It means that policy-makers should try to reduce the number of forms the poor have to fill out, the number of “lengthy interviews” they have to experience, the number of “new rules” they have to “decipher,” all of which “consume cognitive resources” that we now know the poor have less of than those who are better off.
Also, policy-makers should time their demands on the poor for specific periods when they are best able to handle them, such as when they receive whatever periodic income that they do get and momentarily feel less monetary stress. These conclusions constitute a rather shocking anticlimactic letdown!
The authors have helped us see the enormous damage poverty does. In response society has a moral obligation to deal with more than forms and lengthy interviews. History tells us that we can do, and indeed have done, much better.
Short of radical changes in our economic thinking, what the poor in the U.S. need is another “War on Poverty.” Indeed, the obligation is not just a moral one. There is a collective economic self-interest to minimize poverty for to do so will decrease income inequality, increase overall health, promote social stability and lessen crime. It will also promote consumption, which should make the capitalists among us happy.
Do our politicians understand any of this? Seems not. Just this week the House of Representatives voted to cut the Food Stamp program by some $40 billion. That is neoliberal economics in action and proof positive that ideology and prejudice are stronger than scientific research when it comes to policy formulation.
Is there a way to reverse this stupidity? Yes, but it will take mass action. It is time to consider replaying the 1960s and force the politicians to act responsibly despite themselves.
This piece was reprinted by Truthout with permission or license.
Amid Record Pay, CEOs Aren't Celebrating
Sunday, 03 November 2013 12:41 By Sam Pizzigati, Too Much | News Analysis
http://truth-out.org/news/item/19785-amid-record-pay-ceos-arent-celebrating
America’s top execs don’t have the time to party. They’re too busy waging a corporate holy war against what may be the most promising check yet on executive pay excess.
In 1930, an obscure lawsuit against Bethlehem Steel unearthed a piece of corporate data that would quickly outrage Great Depression-era America. Bethlehem CEO W. R. Grace, Americans learned, had grabbed $1.6 million in personal compensation the year before. That revelation would soon help fix a variety of new regulations on America’s corporate executive suites, including a mandate that required companies to annually reveal — for the first time ever — the pay of their top executives.
Over the next four decades, executive pay in America would essentially stagnate. In effect, points out historian Harwell Wells, corporations observed an unofficial $1 million limit on annual CEO compensation. No major firms dared exceed that limit — and risk the public furor exceeding the limit would surely bring.
But CEO pay would start rising again, slowly in the 1970s and then much more rapidly in the 1980s, as some of the dominant pressures that had restrained excessive compensation — most notably, a strong trade union presence and high federal tax rates on high incomes — began to melt away.
By the 1990s, million-dollar executive paychecks would be commonplace. By the early 2000s, CEOs were regularly busting the $10 million barrier.
Now a new analysis — from GMI Ratings — has revealed that Corporate America has obliterated still another barrier. In 2012, GMI reported last week, the nation’s ten highest-paid CEOs all pocketed more than $100 million each.
Before 2012, that had never happened before.
Researchers at GMI track “realized pay,” a yardstick that offers, many observers believe, the clearest sense of how fabulously lucrative executive stock awards have become.
These stock awards currently come in various forms. Stock “options,” the most lucrative of them all, give executives the right to buy shares of their company’s stock at a future date at the current stock price. If a company’s shares gain in value, the executive can buy low at that future date and sell high.
But stock options present problems for researchers trying to tally up exactly how much pay in a given year top executives are grabbing. How should researchers value these options? Should they estimate, in the year an executive receives the options, how much the options will be worth down the road?
Or should researchers wait and not record options as compensation until executives “exercise” these options and realize actual value from them?
The GMI researchers wait, and that patience helps us see vividly how mammoth today’s largest executive rewards have become. In 2012, the new GMI data indicate, Sirius XM Radio CEO Mel Karmazin collected $255.4 million in total realized compensation. Of that sum, $244.3 million came from exercising stock options he had received in earlier years.
Karmazin only rates third on GMI’s top-paid ten for 2012. The year’s first-place finisher, Facebook CEO Mark Zuckerberg, pulled in an astounding $2.3 billion. In second place: the chief exec at energy pipeline giant Kinder Morgan, Richard Kinder, with $1.1 billion. America’s top-paid CEOs, all these totals show, now reside comfortably in nine- and ten-digit annual pay territory, a level that once upon a time only hedge and private equity fund kingpins called home.
So have we hit the ultimate party time for America’s CEOs? Not really. Today’s top CEOs don’t appear to be celebrating. A deep sense of apprehension, not joy, seems to have invaded America’s executive suites. What’s going on? America’s CEOs appear deathly afraid that their gravy train may soon derail.
That fear is driving the massive — and borderline hysterical — lobbying campaign that corporate power suits are now waging against a provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
This particular provision, the law’s section 953(b), requires corporations to annually reveal the ratio between what they pay their top execs and what they pay their most typical workers.
The U.S. Securities and Exchange Commission, after long delays, last month proposed regulations to enforce this mandate. Top execs — and their underlings — have been bombarding the SEC with overheated complaints ever since.
By law, the SEC must invite “public comment” before finalizing any new regulations. The comments Corporate America’s power suits are now filing come full of ludicrous doomsday claims. Corporate human resource execs are even predicting that the proposed new SEC regs will create “chaos.”
The National Investor Relations Institute, the trade group that speaks for the corporate officials who handle disclosure issues, is specifically charging that the pay ratio disclosure the SEC seeks to enforce will “confuse most investors” and impose “exorbitant” compliance costs on corporations.
One corporate consultant goes further. He’s claiming that shareholders at corporations that show only modest gaps between their CEO and median worker pay might well demand pay cuts for workers!
The organizations that actually represent workers, America’s trade unions, couldn’t disagree more. They’re lining up solidly for a robust enforcement of the Dodd-Frank pay ratio disclosure. And they’re finding support from business leaders who understand how corrosive wide pay gaps have become.
One small business leader from Colorado, Laurie Norton, reminded the SEC last month that an “inequitable distribution of income” is threatening our democracy.
“Not revealing the absurd ratios of CEO pay to that of average workers,” she told federal regulators, would be the “equivalent to sweeping and leaving our dirt under the rug.”
The U.S. Securities and Exchange Commission will be accepting comments on its proposed pay ratio disclosure regs through December 2. Interested citizens can read online the comments so far submitted and submit comments of their own, either directly to the SEC or via the AFL-CIO’s ratio disclosure campaign.
This piece was reprinted by Truthout with permission or license.
[Removed]
Apparently the U.S. has now reached a milestone for the second time. For the second time in the history of the U.S., caucasian babies are no longer the majority.
Why?
Answers anyone?
Why should they be?
lol.
It appears so. Or its just a bot programmed that way.
http://occupywallst.org/forum/alec-still-attacking-pensions/#comment-1010786