Monday, May 28, 2012

This Memorial Day, No Millionaire Left Behind

U.S. disparity of income is setting records by some measures

It's 2012 -- the financial crisis happened over four years ago, and the Great Recession is supposed to have been over long ago. After all this time, the American people, or at least the ones with the most juice, don't seem to have learned a thing.

Corporate profits hit record levels in 2011, and with that increase, compensation for CEOs went up about 6% as well. The CEO of a typical public company made (off with) $9.6 million in 2011, as CEO pay was largely in the form of stock awards tied to "performance."

For more particulars about this report, here's a link to an online story in The Seattle Times.

The way some fools have spun this is that shareholder activists can claim a victory of sorts, because the corporate boards aren't just shoveling over as much "pay for pulse" as they once did. More of CEO compensation is tied to "performance," in the form of higher profits.

The U.S. business press, in its usual myopia, does not perceive the hideous structural problem that this represents. The CEOs making a killing now, it appears, are the ones who run their corporations in such a way as to squeeze the maximum profit from American consumers that they possibly can. Bleed them white, milk them dry, and you get more stock awards!

The shareholders are then happy, I suppose. But what of the consumers? Do those schmucks even matter? It would appear that they matter only to the extent that they pay up, to the max -- even if they have to go heavily into debt. And then, of course, the banking companies can own their very souls. It's like a modern version of the company store.

The Seattle story did touch upon the fundamental problem here:

CEOs managed to sell more, and squeeze more profit from each sale, despite problems ranging from a downgrade of the U.S. credit rating to an economic slowdown in China and Europe's debt crisis.

Still, there wasn't much immediate benefit for shareholders. The S&P 500 ended the year unchanged from where it started.

Including dividends, the index returned a slender 2 percent. ...

And the main concern of many shareholders -- that pay is just too much, no matter what the form -- has yet to be addressed.

"It's just that total (compensation) is going up, and that's where the problem lies," says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.

The typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one. The median pay for U.S. workers was about $39,300 last year. That was up 1 percent from the year before, not enough to keep pace with inflation.

The main problem is that, even after the sobering experiences of a financial crisis CAUSED by the misconduct of financial institutions themselves, and the Great Recession, the U.S. economy continues to grow top-heavy, prolonging a disturbing (and for most people, painful) trend that's been going on since the late '70s and early '80s.

An illustration of the dilemma lies in a labor anecdote involving UAW legend Walter Reuther (1907-70). A Detroit automaker wheel was showing Reuther the new robots that could perform tasks on the assembly lines.

"Let's see you try to get one of these robots to join your union," the wheel told Reuther with amusement.

Reuther's reply: "Let's see you try to get one of these robots to buy one of your cars."

The further these predators keep pushing ordinary Americans into debt, and the less they pay them, eventually the ordinary schmucks can't afford car payments, or fall behind on them. Then what happens to profits -- and then ultimately, CEO compensation?

A pungent Japanese observation about U.S. corporations is that they think in terms of the next 10 minutes (well, perhaps the coming quarter), while in Japan they think in terms of the next 10 years. Popular depictions are that the Japanese economy hasn't fared well in recent years -- but still, it might be wise to start thinking, as they do, more long-term. Their CEOs certainly don't make even remotely what their American counterparts do, and they pay their common workers comparatively well. They can't claim to have achieved utopia, but their way may ultimately prove more sustainable, long-term, than ours.

In any case, it should be clear by now to "the 99 percent" that what we've got going on here -- capitalism reverted back to its most primitive and cannibalistic forms -- can't go on much longer.

As a parting Memorial Day thought, I suppose there are plenty of "patriotic" Republican types out there who will be honoring those who died, and who returned as basket cases, (please check out this link) on and from the deserts and mountains of the Middle East. Yeah -- they got shot to pieces and blown up so that corporate CEOs could rake in $9.6 mil a year, buy their Montecristo cigars by the box and their single-malt Scotch by the case. Such sacrifice.

Postscript: I forgot to mention that two-thirds of U.S. corporations are effectively paying no income tax. Perhaps these patriots could ante up a little better, given all the glorious profits they are making, so that we could cut that deficit!

Manifesto Joe Is An Underground Writer Living In Texas.

Tuesday, May 22, 2012

Fracking Could Turn Much Of America Into A Wasteland

By Manifesto Joe

They've already seen a lot of this in rural areas -- the dumping of industrial waste, the fouling of well water, the loss of bucolic hills and trees. But it's not something that just happens in sparsely populated rural areas anymore. It's come to the city.

"Fracking" -- the hydraulic fracturing technique of drilling for fossil fuels -- is now an urban phenomenon. My wife and I live in a large city, and we've got fracking wells less than half a mile from where we live, and in two different directions.

There's still much debate going on about the side effects of this technique, with the Environmental Protection Agency right in the middle. Where we live, what they're exploring for is mainly natural gas, and the gas industry denies any effect on drinking water, and any significant pollution in general.

I've noticed very strong petroleum-like odors in our neighborhood when drilling activity is hot. Also, we've got a large holding pond next to a gas field that's not too far from our house. I haven't noticed any of the neighborhood children trying to go skinny-dipping in that thing.

I suspect that the people who live next to that holding pond have seen their property values plummet, probably far more than any perks they got from selling their subsurface mineral rights. ... Which brings me to another topic.

My wife and I were among the last "holdouts" in our neighborhood. We ignored the landmen for a couple of years, and were getting all sorts of offers in the mail. There's a certain economic logic to this, because we ended up getting about twice as much for our mineral rights as did the schmucks who took the first offer they got.

I wasn't happy about the idea of having gas drilling this close to where I live, anyway. But in Texas, the way I understand the laws governing mineral rights, if you are the last SOB standing in the way of a company's extraction of fossil fuels -- well, in essence, they can just TAKE it from you. If all your neighbors have signed on -- and I know that ours did -- the company has the law on its side to just run right over you.

So, after a long holdout, we signed a lease. Now I almost wish I hadn't done it, since some unpleasant facts about the side effects of "fracking" are coming out.

I don't know very much about the technical end of this, but some areas of America are seeing some very ugly sides of the "fracking" bonanza. Truthout has been doing a lot of good reporting on the subject. Here's a link to one of their most recent posts on this.

A few years into the boom, we're finally seeing city councils and neighborhood associations getting concerned and involved, but in many ways it's far too late. The Trojan Horse, so to speak, is already in the city. I can't understand where a lot of these whiners were when the gas company landmen were tossing all that money around.

There have been serious, lethal explosions result from gas drilling. We're having earthquakes happen all over Texas now, in places that never had them before. People are reporting well water that they can set on fire with a lit match. But to hear the companies tell it, this is all nonsense.

You see, it's common knowledge that rural Texas is rife with rabble-rousing Marxists who live to destroy the lush fruits of unbridled capitalism. They are all making this stuff up, just because they hate to see anybody making a profit.

Well, it's not just in the country anymore. City slickers have gas wells nearby, too. I look at a couple of sites every time I drive to work.

Manifesto Joe Is An Underground Writer Living In Texas.

Thursday, May 3, 2012

More Computer Problems -- Hope To Be Back Very Soon

Joe's suspicious that new contributor Geekus Maleekus had something to do with this. He's a confessed computer saboteur.

Hope to have this issue resolved by next week. Hang in there, loyalists! -- MJ