The Futurists Were Wrong About 2 Big Things: Greed And Stupidity

By Manifesto Joe

I confess to be old enough to remember the 1960s and 1970s. The futurists of the time were telling us that by now we Americans would be working 25-hour weeks, with that workload regarded as full time and with the same standard of living, or likely even better.

These bozos got it wrong in a number of very basic ways, but two ways really stand out: (1) greed and (2) human stupidity. Let's consider them one at a time.

Greed

The American economy has indeed expanded, and nearly as much as the futurists of the Sixties and Seventies thought it would. I've generally heard estimates that productivity in the U.S. is now roughly a third more than it was in 1980 or so. And yet wages and salaries are generally stagnant, and the old 40-hour week is widely regarded as a schedule for wimps. Most American workers are probably putting in more hours than that, even those who have only one job.

So what happened? It's pretty simple. We're not even talking here about the top 1% -- it's more like the top 0.1%. They raked it in as quickly as it came, and they ushered in a Second Gilded Age.

It's true that not many of us are starving or homeless. I'm certainly not. But a lot of us are having trouble staying current with bills -- I certainly am. And the last time I can even remember getting a cost-of-living raise would have been many years ago. In 2012, I was laid off after not getting a raise for years, then I had to take a pay cut of roughly 17.5% to get a comparable job. I started in this position in January 2013, and I have yet to see a COLA-type raise to this day.

Meanwhile, there's a tiny clan at the top of the U.S. economic pyramid who are prospering as never before. According to a recent article in the Los Angeles Times, Discovery Communications CEO David M. Zaslav makes 1,951 times what a median worker for the company makes. And he's just one example. The article went on:

"Chipotle Mexican Grill came in second, with a pay ratio of 1,522, and CVS Health was third with a ratio of 1,192."

It's not unusual for CEOs nowadays to get over 1,000 times what an ordinary worker is paid. Compare that to back in the 1960s, when futurists were cooking up their wrongheaded predictions for the present. Back then, a typical CEO was being paid about 40 times the earnings of an average worker.

And bear in mind that quite often CEOs are paid that way whether they perform successfully for the company or not.

The Great Recession, which began in 2008 and for some of us never ended, was supposed to finish such trends once and for all. There was government intervention in the economy that was supposed to be, for laissez-faire and supply-side economics, the death knell that they so richly deserved long ago. "We are all socialists now," the MSM rag Newsweek magazine boldly declared.

Tell me another one. There's supposed to have been a "recovery" since The Great Recession, but it's invisible in the lives of ordinary people. Nearly all the gains of the "recovery" since 2008 have gone to the very wealthiest people. Yep -- they pulled it on us again, and politicians like President Barack Obama adopted a pseudo-pragmatic stance and let them get away with it.

The corporate mindset, meanwhile, is quite unchanged. For one example, it is now generally considered a no-brainer that corporate "outsourcing" of labor to cheaper workers in foreign countries has been a failure. And yet it goes on. The lower wages look good on paper, and of course, nobody likes to admit to a mistake. And so most of the customer-service calls that Americans make are answered by Kenny from Bangalore.

It's sad to point this out, but the heavy foreign accents are simply a problem. Half the time I am forced to ask Kenny to repeat himself so that I can understand. I have absolutely no problem with Kenny being able to get a job that he might not ordinarily get, but when I have to spend more time on the phone with him and still sometimes not get the answers I need, productivity suffers. At the risk of sounding "nativist," wouldn't it be better just to hire an American, even at a higher wage, so that understanding can be aided? But no, American wages are too high. And so, outsourcing goes on.

The corporate mindset is such that, when you get to the bottom line, money is everything. But there are fundamental contradictions in that mindset -- and that brings us to Karl Marx, the guy so many economists think is obsolete.

Marx was obviously wrong about a lot of things. But I'd say he was dead-on right about a couple of scenarios that are still in play in 21st-century economics. (1) Capitalism thrives on competition, yet every capitalist seeks a monopoly. (2) Capitalism's success depends on consumer spending, but capitalists try to hold down the wages and salaries of consumers, if not eliminate them altogether, whenever possible.

I vividly recall a conversation I had with a higher-level manager when I was interviewing for a position in my late 20s. "We're all for competition, everywhere else. ... But when somebody comes along and tries to compete with us, we're going to crush them!" I often wondered whether that man ever quite understood the irony of his statement. I got the impression that he'd never even thought about it. People with any real depth rarely advance in corporate management.

There are obviously forces at work that have kept those two long-standing contradictions of capitalism from bringing about its downfall. Monopolies can often be destroyed by technological breakthroughs -- look at the dominion of VHS video rental stores in the 1980s, and see where they are now. And somehow people have always made enough money to buy all the newest gadgets, keeping the consumer economy going.

But we have lived to see a time in which technology is so ubiquitous, machines are at last capable of replacing human workers in vast numbers. When Kenny from Bangalore doesn't answer calls for customer service, what you get is usually an automated system. That such systems sometimes malfunction is good news for IT professionals, but as the systems get better, people won't be needed for those jobs, either. We will all eventually have our time of becoming superfluous.

The seeds are relentlessly being planted for some kind of general human rebellion. The first big explosion will probably occur in about 20-30 years, by which time I expect to be either dead or sucking my meals through a straw with the aid of underpaid, overworked and apathetic caregivers.

The Establishment will win that one BIG -- they have the firepower and the technology to drive any such movement underground for at least a generation, a la Tiananmen Square. The losses for the rebels will be staggering; the rebels will be called "terrorists," and there won't be many places on the globe (can you say Global Economy?) to run to and hide by then.

Another 20-30 years will go by. Then what will happen will be something akin to 1789 in France, or 1917 in Russia. Revolutions generally happen a very long time after their seeds have been planted, and their final results (Napoleon and Stalin) have often been highly detestable.

Which brings us to the second "way" in which the optimistic futurists of the Sixties and Seventies were dreadfully wrong.

Human stupidity

This is the thing that can, or should, be counted on for all seasons, in all times and places. Looking back, there were many opportunities that people had in America and elsewhere to put a stop to what I've been describing. But people have sat dozing in the pan like frogs, as the water slowly boils.

In America the turning point in leadership (or lack thereof) was Reagan. In England it was Thatcher. The disease is still rampant in America today, as an ailing, stressed-out lower middle class looks toward a spoiled megalomaniac like Donald Trump as its savior from Mexican rapists and evil hedge-fund tycoons.

One doesn't have to look far to find millions of people constantly voting against their own interests. When you walk into a convenience store and find a $10-an-hour white male clerk chuckling and nodding approvingly as Rush Lardbaugh rails against "feminazis," a person of any intellectual honesty has to recognize that something is wrong.

Conservatives, of course, count on this. I think it was John Stuart Mill who said something to the effect that not all conservatives are stupid people, "but most stupid people are conservatives." The more sheep who can be led, even to slaughter, the better.

So the disease of blaming the wrong people for problems is still alive and well, and will be for a long time, thanks to stupid people. Rebellion will come about only when enough people become so uncomfortable, for long enough, that they won't be able to get the basic things they need to survive. Only then will they wake up and realize who's done this to them. That didn't even happen during the Great Depression of the 1930s.

By then, when the televised "revolution" finally comes, it will be too late for some people, including me. That's one big reason I don't blog much anymore.

Manifesto Joe Is An Underground Writer Living In Texas.

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.