Waging Class War in Comfort

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

In a typical corporate board of directors meeting, what do CEOs see when they look out across their richly lacquered boardroom tables? They see . . . lots of other CEOs.

That’s no accident. CEOs today purposely pack their corporate boards with their pals, who often turn out to be current or former chiefs at other corporations. Everybody who’s anybody just feels more comfortable that way

The most powerful corporate executive in 1950s America, GM’s Charlie Wilson, served as U.S. secretary of defense — and paid three-quarters of his income in taxes.

President-elect Donald Trump, a big-time business chief himself, certainly seems to want to feel comfortable, too. No other President-elect has ever packed his cabinet with more business bigwigs.

For secretary of state, Trump has tapped Exxon Mobil chief executive Rex Tillerson. At Treasury, he’s installing former Goldman Sachs executive Steven Mnuchin. Trump’s pick for commerce, billionaire Wilbur Ross, runs his own investment firm and sits on five other corporate boards.

For transportation secretary, the President-elect has chosen Elaine Chao, the scion of a shipping magnate fortune who pulled down over $1 million last year sitting on four corporate boards. Trump’s choice for labor secretary, fast-foods CEO Andrew Puzder, has made his own fortune keeping wages low at the Hardee’s and Carl’s Jr. chains.

Betsy DeVos, the Trump education secretary-designate, has never stepped foot in a public school as a student, educator, or parent. But she does hail from the billionaire family that runs the money-making machine that goes by the name of Amway.

At the Small Business Administration, Trump is situating Linda McMahon, the billionaire who helps runs a sports entertainment empire. And the chair of Trump’s National Economic Council will be Gary Cohn, the president of Goldman Sachs.

Trump has named a variety of other tycoons to official advisory bodies. Among these new advisors: Uber CEO Travis Kalanick, Tesla CEO Elon Musk, and PepsiCo CEO Indra Nooyi.

Donald Trump, to be sure, won’t go down in history as the first President to ever plop business chiefs in the federal government’s loftiest positions. Previous presidential business picks have even generated some intense controversy.

In 1953, for instance, President Dwight Eisenhower put forward as his secretary of defense the president of America’s most powerful company, Charlie Wilson of General Motors.

That January, Wilson went before the Senate Armed Services Committee for his confirmation hearings. Some senators wondered whether the GM top dog would be able to put the interests of the United States before the interests of General Motors.

Wilson’s purported answer — “What’s good for General Motors is good for America” — soon became a staple of American political folklore. But Wilson didn’t actually put his sentiments exactly that way. His actual answer, the hearing transcripts show, smacked of less arrogance.

Wilson told his Senate inquisitors that he didn’t think he would face a conflict of interest between his corporate and government service because, he explained, “for years I thought what was good for our country was good for General Motors, and vice versa.”

“Our contribution to the nation” at GM, Wilson added, “is quite considerable.”

And Wilson did have a point. In postwar America, big companies like GM did make a contribution to the nation. They didn’t just extract wealth. They did some serious sharing. Years of labor militancy had convinced business leaders like Wilson that corporations had to bargain reasonably with their workers.

In 1950, Wilson’s General Motors and the United Auto Workers had signed a landmark contract that came to be known as the “Treaty of Detroit,” and the basics of that treaty — productivity-based wage hikes above and beyond inflation, significant pension and other fringe benefits — would soon spread throughout America’s unionized heavy industries.

And Charlie Wilson shared personally, too, via the steeply progressive tax rates then in effect. In 1950, Wilson earned $586,100 from his GM compensation and personal investments. He paid 73 percent of that — $430,350 — in income taxes.

Just ponder those numbers for a moment. In the middle of the 20th century, the top exec at the top corporation in the United States had an after-tax income of $155,750, the equivalent, after taking inflation into account, of a mere $1.56 million today.

Last year, America’s top 200 corporate chiefs averaged $19.3 million. They took home more than $1.56 million every month.

Now we don’t know exactly how much our contemporary corporate chiefs are paying in federal taxes. We do know, from an IRS report released earlier this year, that Americans in their income neighborhood — the top 0.01 percent — paid federal income taxes at a 26 percent effective rate in 2013.

Charlie Wilson paid taxes at nearly triple that rate 66 years ago.

For corporate chiefs, America has changed a good bit since Charlie’s time. And now Donald Trump and the business kingpins he has populating his inner circle want to change it a good bit more. The latest tax plan that Trump has advanced would on average, the Tax Policy Center calculates, slice the tax bill of America’s top 0.1 percent households by over $1 million each in 2017.

Trump and his pals aren’t signing treaties. They’re waging class war.

***

This was reposted from OurFuture.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches, From Campaign for America's Future

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work