Posts from Sam Pizzigati

Nostalgia for NAFTA? Our Wealthy Will Have Plenty

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

NAFTA will soon be no more. The Trump administration has a new trade deal with Canada and Mexico — and a new name for the North American trade order.

Trade union and other fair-trade experts are now parsing the details of the new Trump agreement, and we don’t yet have a full sense of exactly how this new “USMCA” — the plodding shorthand for “United States-Mexico-Canada Agreement” — will play out politically over the next few months.

But we do know, no matter what happens with the new deal, that America’s most wealthy will always look back fondly at NAFTA’s 25-year run. For America’s richest — and the most financially favored of Canada and Mexico as well — NAFTA has been the gift that never stopped giving.

The NAFTA quarter-century, simply put, may well go down in history as the most lucrative quarter-century North America’s privileged have ever experienced.

Forbes magazine has just delivered the most up-to-date evidence of just how lucrative — for our wealthiest — the last 25 years have been. That evidence comes from the latest Forbes annual list of America’s 400 richest. Put this new list in a bit of historic perspective, and the picture we see would thrill even the most jaded of deep pockets.

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Keeping Cancer Cures a Corporate Profit Center

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Who knew fighting cancer could be so lucrative? Memorial Sloan Kettering Cancer Center CEO Craig Thompson, for one. Last year, Thompson pulled down nearly $600,000 in cash and stock from his service on two for-profit drug company boards, all on top of his $6.7 million in Sloan Kettering pay the year before. No wonder Thompson looked the other way while his chief medical officer “failed to disclose” in medical journal articles that he had received millions from companies that could be banking on matters he was writing about. In September, that scandal went public, and Thompson at first insisted that working with for-profit companies must remain a priority. Last week, amid mounting public outrage, Thompson retreated and announced he would resign his corporate board seats. But the real scandal remains: a hospital-Big Pharma complex that focuses single-mindedly on patentable pharmaceuticals that generate huge returns for corporate execs and shareholders.

Share the Wealth? Of Course. But When?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

In the United States, back during the Great Depression, three simple words animated a grassroots upsurgethat would help make the nation the world’s first mass middle-class society: Share the wealth!

And the nation did. By the end of the 1960s, the top 1 percent’s share of America’s national income had dropped by more than half. The bottom 90 percent share, meanwhile, had jumped from half the nation’s total income to over two-thirds.

Redistribution — via the tax code — drove this dramatic egalitarian shift, as high incomes faced high tax rates throughout the middle decades of the 20th century. But these high tax rates, levies that topped 90 percent on income over $200,000, would have no staying power. The relentless assaults of America’s wealthiest would over time grind them down.

Egalitarians in other developed nations saw the same dynamic. They could not sustain steeply progressive tax rates. Redistribution via the tax code, progressives worldwide began to understand, would not be enough. We can’t tax away inequality. We have to prevent inequality from taking hold in the first place. We have to brake the economic forces making the rich ever richer.

Foremost among the forces: the large corporations that dominate our global economy. These corporate giants create grand fortunes for those who run them. And those who run them create chronic economic insecurity for those they employ and the communities where they live.

Corporations have, in effect, become inequality’s single most powerful engine. We need to slow that engine down. But how?

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The ‘Unintended Consequences’ of Letting the Rich Get Richer

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

What happens when a bold new idea for making America more equal hits our political center stage? Those comfortable with our unequal status quo — and those worried about discomforting those comfortable with our current inequality — invariably shout out two sage-sounding words.

“Unintended consequences!”

Making the proposed change, cheerleaders for our economic order go on to explain, will trigger a chain of events that will leave the intended beneficiaries of the bold new idea worse off than they had been.

We see this scenario play out every time a bid for a higher wage minimum threatens to advance. We’ve seen this scenario, for instance, play out this summer as the D.C. City Council, shoved along by the city’s restaurant industry, has moved to overturn a popular vote for a higher tipped-worker minimum wage.

We’ve also seen a textbook example of all this on the national stage in the month since Senator Bernie Sanders and Representative Ro Khana introduced legislation that would require worker-squeezing corporations to pay a special tax equal to the cost of the federal safety-net programs their underpaid workers qualify for and receive.

In other words, for every $1 million in food stamps that workers at Walmart qualify for, Walmart would face an additional $1 million in federal taxes.

Major U.S. corporations, if this legislation became law, would end up paying a lot more than $1 million in extra taxes. An estimated $152.8 billion a year is now going to fund federal safety-net programs that help low-wage workers. Over half of all fast-food workers in the United States, 52 percent, currently rely on taxpayer-funded programs to make ends meet.

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Our New Gilded Statistical Golden Age

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

he people who lived — and suffered — through America’s original Gilded Age had plenty of problems. One just happened to be statistical. Back then, in the 19th century’s closing decades, everyone knew that the United States had become significantly more unequal. But no one had a firm take on just howunequal.

Good, reliable statistics on income and wealth distribution simply didn’t exist. The nation had no taxes on income and wealth — and no particular bureaucratic reason to collect data on either.

One Gilded Age U.S. senator, Richard Pettigrew from South Dakota, did do his best to prime the data pump. Pettigrew secured an amendment to the 1890 census bill that required enumerators “to ascertain the distribution of wealth through an inquiry into farms, homes, and mortgages.” A few years later, Pettigrew would use data from that enumeration to charge that 4,000 families, just 0.03 percent of the U.S. population, held 20 percent of the nation’s aggregate wealth.

Bur Pettigrew knew the nation needed much more in the way of raw data. He tried to get the next census, in 1900, to include a deeper dive into who owned what.

“The question as to what becomes of what the toilers of the land produce, whether it goes to them or is taken from them by special privileges and accumulated in the hands of a very few people,” Pettigrew told his Senate colleagues, “reaches ultimately the question of the preservation of free institutions.”

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A Fierce Defender of Truth and Classic Opulence

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Rolls-Royce CEO Torsten Müller-Ötvös sees himself as the custodian of a hallowed brand — and woe be to anyone who dares dispute Rolls supremacy in the universe of ultra luxury. This past March, Müller-Ötvös lit into an Aston Martin exec who had the temerity of suggesting that the traditional Rolls design amounted to an outmoded “ancient Greece.” An “enraged” Müller-Ötvös, Auto News reported, fumed that Aston Martin had “zero clue” about the ultra rich and then accused other carmakers of stealing Rolls-Royce intellectual property. Last summer, Müller-Ötvös rushed to defend the $650,000 price-tag on one Rolls model after a reporter told him that his son wondered why anyone who could afford to “fly to the moon” would choose to buy a Rolls instead. Rolls patrons, the 58-year-old CEO harrumphed back, hold at least $30 million in personal wealth: “They don’t have to choose. They can fly to the moon as well.”

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How to Recognize a Plutocracy: The Dead Giveaway

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

How can we tell when a democracy, or rule by the people, evolves into a plutocracy, the reign of the rich? Easy. We have a democracy when a political system can and does make a good-faith effort to address the problems average people face.

In a plutocracy, on the other hand, the political system pays no more than lip service to average people’s problems and works diligently instead at protecting — and growing — the wealth of the already wealthy.

By this simple standard, we Americans today unquestionably live in a plutocracy. Our latest slam-dunk evidence: the record of the decade since the Wall Street financial crash ushered in the Great Recession.

Almost exactly ten years ago, in late summer 2008, the tremors that had been roiling the U.S. economy ever since the housing bubble popped the year before turned into an economic earthquake. The giant Lehman Brothers investment bank fell into one yawning fissure. The giant insurer AIG stumbled toward another.

“Citigroup appeared poised to go down next, with General Motors and Chrysler to follow,” remembers the New Yorker’s George Packer. “Everything solid in the American economy turned out to be built on sand.”

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We Once Jailed CEOs for Their Crimes. Remember?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Jeffrey Skilling, the ex-CEO of the now-bankrupt energy giant Enron, has got to be steaming. Skilling helped Enron soar high up in the Fortune 500, then sank into infamy when his company went bankrupt in 2001 amid revelations of widespread fraud. Five years later, a federal judge sentenced Skilling to 24 years in prison. Last week, federal authorities released the 64-year-old to a halfway house, the first step to outright release. Enron’s collapse cost shareholders billions and employees their life savings. Skilling personally has had to pay $45 million in fines and over $75 million in legal fees — and his 20-year-old son died while he was serving his time. But Skilling has yet another reason to fume. None of the top CEOs responsible for the fraud that ushered in the 2008 financial crash — and wreaked much more havoc on America than Enron — has yet faced a day behind bars and, notes federal judge Jed Rakoff, likely never will.
 
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Would You Recognize a Plutocracy If You Saw One?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

How can we tell when a democracy, or rule by the people, evolves into a plutocracy, the reign of the rich? Easy. We have a democracy when a political system can and does make a good-faith effort to address the problems average people face.

In a plutocracy, on the other hand, the political system pays no more than lip-service to average people’s problems and works diligently instead at protecting — and growing — the wealth of the already wealthy.

By this simple standard, we Americans today unquestionably live in a plutocracy. Our freshest slam-dunk evidence: the record of the decade since the Wall Street financial crash ushered in the Great Recession.

Almost exactly ten years ago, in late summer 2008, the tremors that had been roiling the U.S. economy ever since the housing bubble popped the year before turned into an economic earthquake. The giant Lehman Brothers investment bank fell into one yawning fissure. The giant insurer AIG stumbled toward another.

“Citigroup appeared poised to go down next, with General Motors and Chrysler to follow,” remembers the New Yorker’s George Packer. “Everything solid in the American economy turned out to be built on sand.”

No American born after the 1929 crash had ever since anything like this. In quick order, about 9 million workers lost their jobs. About the same number of families lost their homes.

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The Market Made Them Do It

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Back in 1999, near the dizzying height of the dot.com boom, no executive in Corporate America personified the soaring pay packages of America’s CEOs more than Jack Welch, the chief exec at General Electric. Welch took home $75 million that year.

What explained the enormity of that compensation? Welch didn’t claim any genius on his part. He credited his success, instead, to the genius of the free market.

“Is my salary too high?” mused Welch. “Somebody else will have to decide that, but this is a competitive marketplace.”

Translation: “I deserve every penny. The market says so.”

Top U.S. corporate execs today, on average, are doing even better than top execs in Welch’s heyday. In 1999, notes a just-released new report from the Economic Policy Institute, CEOs at the nation’s 350 biggest corporations pocketed 248 times the pay of average workers in their industries. Top execs last year averaged 312 times more.

What explains this growing generosity to America’s top corporate chiefs? Today’s apologists for over-the-top CEO compensation, like Jack Welch a generation ago, point to the market.

One leading critic of these apologists, the Dutch management scientist Manfred Kets de Vries, neatly summed up this market world view earlier this year: Big CEO pay packages “reflect market demands for a CEO’s unique skills and contribution to the bottom line.” Mega-million executive paychecks “merely represent the market forces of supply and demand.”

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Union Matters

Your Vote is the Last Line of Defense Against One-Party Control

Hugh J. Campbell

Hugh J. Campbell Son of a steelworker, Philadelphia, Pa.

The bottom line of Adam Serwer’s The Guardrails Have Failed is: “As for Kavanaugh, every opinion he writes, every decision he joins, and every day he sits on the bench will be tainted with illegitimacy.” Senators who represent a shrinking portion of the population confirmed a justice more Americans oppose than support. He was nominated by a president for whom most of the electorate did not vote. Republican control of the three branches of government is countermajoritarian. With the guardrails of separated powers broken, the last remaining defense for American democracy and the rule of law is the electorate itself.

Since April 8, 2017, when Neil Gorsuch became Associate Justice of the U.S. Supreme Court, the United States Government has been controlled by one political party. Why is this important?

In his Oct. 15, 2011 Senate Judiciary Committee testimony on separation of powers, Justice Antonin Scalia tells us: The real constitution of the Soviet Union, that constitution did not prevent the centralization of power in one person or in one party. And when that happens, the game is over, the Bill of Rights is just what our Framers would call a “parchment guarantee.”

Unless the Republican party ceases to control the legislative branch of the U.S. government in January, 2019, centralization of power will continue in one party, the Republican Party, for another 24 months, and if Donald Trump has his way, that centralization of power will be in one person.

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Unions for All, Unions for 15

Unions for All, Unions for 15