Executive Compensation…uh, Overcompensation

2008-Aug-10

I’ve been reading economics blogs lately to see how we will soon become just another third world country. Just came across this tidbit from The Automatic Earth:

What’s wrong with Wall Street? …:
* Rewards employees, not shareholders – It pays as much as 76% of its revenues to the people who work there (e.g., in 2006 Merrill paid $17 billion in compensation and its revenue totaled $22.4 billion). That pay is linked to revenue, not how much money their deals make for customers.

That money is not going to the real employees (the ones who do all the actual work). It is going to the leeches, those CEOs and top execs who get paid many millions, with multimillion golden parachutes beyond that) to take the companies for every dime as they ride its stock down into oblivion.

Decades ago one of my bosses said to me, “Well, a company can make money by selling things or by cutting expenses. And we are in the phone business and everyone has a phone, so our only choice is to cut expenses. And thirty percent of any company’s expenses are employee pay. So if the executives want to get paid more they have to cut rank and file employees. And that is what we are doing.” And the company laid off a quarter of a million employees while I was there, from 355,000 employees down to 120,000 (and many more since).

But right now, look at that thirty percent going to employee wages. That is management and non-management. But that was back in the 1980s, just as the era of downsizing was beginning. Since then per-employee productivity has been rising drastically, as huge numbers of employees have been cut and the remainder forced to do the jobs of those who left…or suffer the same fate themselves. And at the same time CEO pay has skyrocketed from about 30 times the average wage in 1980 to over 350 times now.

Now it appears that not only are CEOs and high level execs getting a much greater cut of employee pay, but now many execs are taking money that would have gone to stockholders or better or cheaper products and keeping it for themselves.

And you and I are paying for it…

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The Two Political Spectrums

2008-Jul-24

For decades we have assumed the political spectrum ranged from Liberal to Conservative, and assumed that all political groupings from the Klan to the Commies could be squeezed into that spectrum.

Well, we are about to discover that the importance of the Liberal/Conservative spectrum is becoming secondary to the far more primordial spectrum, that of the Haves vs Have-Nots. Yes, we will still have elections decided on the issue of whether gay guys should be able to have abortions on demand, but when people have to decide whether their kids will get food or medicine this week, at least some of them will get the picture that they must (at least temporarily) set aside their differences and concentrate on physical survival.

We used to have a middle class in this country. But no one will die middle class any longer. In a generation, all middle class jobs will be done by cheap imported or offshored labor for a fraction of their current wages, and anyone who manages to last until retirement will find anything they saved will be eaten up inflated food or energy or transportration costs, by medical costs not reimbursed by their medical plan, or they will have to sign over all their assets to some nursing home.

No need to worry about the “death tax” because only the super-rich will have anything left but debts when they die.

I’m seeing small groups of people starting to get together, getting past old differences, and cooperating on getting ready to survive the coming hard times. I’m seeing networks where leftie Pagans are getting with right-wing Fundie Christians on common issues.

The coming wars (acknowledged or not) will be between the top one tenth of one percent who will own everything and the rest of us who will own nothing…not even ourselves.

If those of us who are prey can get together soon enough to defend ourselves from the predators, we have a chance to make a society with a substantial middle class again and lessen the growing inequality. But so far it’s just a chance…


Hillary vs Michelle

2008-Jul-13

Over at Midwest Voices comes the complaint about “the ongoing girl-fight between white feminists and feminists of color.”

Women of all races and ages better find a way to understand one another and move ahead together as genuine equals.

My own personal vignette on the issue:

I spent three years of my academic career living in a co-ed dorm at Bryn Mawr College. In 1969 Bryn Mawr students (and some of us Haverfordian guys) started the “Bryn Mawr College Women’s Studies Group” which did many good things, including agitating to get a Womens Studies curriculum started at Bryn Mawr.

The college agreed, and in its infinite wisdom brought in Kate Millett the following year to conduct a Sociology of Women class and discuss her new book, Sexual Politics“.

A few minutes into the first class meeting, a Black woman, confused by the hate spewing from Kate’s mouth regarding all men, including Black men, and the need to avoid men at all costs, asked Kate, “Are you saying that we Black women have to choose between supporting our Black brothers and our white sisters?” And Kate answered, “Yes, you have to support your white sisters, and you cannot support your Black brothers. You simply have to choose.”

At that point every Black women in the class (pretty much every Black woman at Bryn Mawr at the time) walked out, never to been seen again in the Women’s Movement. And after Kate’s class, the Women’s Studies group lost all the credibility it had started with, and I have no idea how long it took to recover, if it ever did.

The women’s movement, at Bryn Mawr and elsewhere, was never able to come to grips with its Eleventh Commandment, “Thou shalt never speak ill of another feminist,” … no matter how far over the edge someone went. The white women in that class ought to have walked out to support their Black sisters, but they didn’t. They just sat there, in stunned befuddlement at the ironic fruits of their labors of the previous year.

And so, in their inaction, they allowed the forces of hate to become the public face of feminism.

That happened all too often over the years.

And apparently a vocal minority with the desire to make enemies rather than friends is still there. And so still is the desire of the many not to make waves within the movement by confronting the issue.


Kirkwood: Freedom’s just another word…

2008-Feb-08

for nothing left to lose

Those in power never seem to learn the most simple lesson:

Never ever screw someone to the point where they feel they have nothing left to lose.

Because when you push them to the point where they see no reason to continue living themselves, they may then see no reason to let you continue living either.

Maybe you feel that you are ever so superior to them, and your life is ever so much more valuable than theirs. Go ahead and feel that way all you want to. But if you act on your feelings and screw them over past their breaking point, you may not like the blowback. In fact, you may not survive it.

And Brad makes similar points

Update: Another post from Brad that bears reading:

I want you to get this through your head, and never forget it. Lynching was not a hate crime. Lynching was an economic crime.


Playing the Race Card: Black vs Brown

2007-Jun-02

The Neo-Cons in the Bush Administration had a novel tactic in getting Samuel Alito’s nomination to the Supreme Court confirmed. They tried to push the claim that anyone who opposed him could only be motivated by racism: “blue-state liberals against a modest Italian-American”.

Playing the race card by using false accusations of racism to defend a morally suspect political agenda worked so well for the Bush Administration that the fake liberals have been using it to justify their support for the Bush Neo-Con agenda of illegal immigration, by implying that any criticism of amnesty is racist.

When dealing with the Bush Administration (and all too often the Democrats who support them), it is safe to assume that whenever they hurl an accusation, they are trying to distract attention from the fact that they are guilty of whatever they are accusing others of. And the same goes here. If they are claiming it is racist to oppose the cheap labor corporate proponents of illegal immigration, it is more likely that the illegal immigration they encourage is serving the interests of racism, not ending racism.

Who wins and who loses through illegal immigration?

The biggest winners are employers of iillegals. First, they get the cost savings of cheaper labor. Second, they can now pay everyone less for the same job, since those who got fired and replaced by illegals must now accept lower wages in order to work, as the wages of all workers doing that job are reduced to what the lowest paid workers will accept. And once certain jobs are performed mostly by illegals, benefits (such as medical or pension benefits) are reduced or eliminated, job safety standards can be ignored, and unionization becomes impossible when strikers can always be replaced by an infinite supply of scab laborers. And those cost savings give corporate criminals an incomparable competitive advantage over employers who obey the laws. As long as employers know they will suffer no sanctions, the advantages of employing illegals over Americans are truly amazing.

The next winners are the illegals themselves. As I outlined previously, illegals can leverage the first world wages here against the third world cost of living of their extended families to get a strong competitive advantage over their neighbors back home through remittances.

So who loses? Blacks, first and foremost, as I noted before. The question is why would Liberals, Democrats let it happen? Why would Democratic politicians let Blacks, their most loyal supporters, slide into oblivion by supporting handing their jobs off to illegal immigrants?

Well, because that’s what happens every time a new wave of immigrants enters the country. White Liberals dump Blacks just as eagerly as white Conservatives do.

This time around part of it is crass political number crunching. Hispanics now outnumber Blacks and if Democrats can curry their favor and a majority of their votes, they may be able to make up for losing the votes of all the white racists in the South after the Civil Rights Act of 1964, especially since all those white racists voting solid Republican means Blacks really have nowhere else to go, so Dems can give them lip service and then abandon them with impunity.

And the dirty little secret…despite Democratic gloating that on the immigration issue Republicans are split between corporatist Republicans (“amnesty!”) and racist Republicans (“fence!”), Democrats have just as bad a split. Only on the Democratic side the corporate Dems and the racist Dems are the same damn Dems. But the racism is different.

When my Ex was young she went to summer camp, and when she returned her best friends refused to play with her. It seems that Blacks get tans too, and she was now a shade darker than her playmates, so she was too dark to be able to play with them. Republican racism is very simple. Everything is just black or white. But Democratic racism is complex, all shades of brown and gray. But with every wave of this “nation of immigrants”, the new immigrants always turn white but Blacks still end up at the bottom. Because each wave uses blacks as the spring board to step on to climb their way up the ladder:

IN 1971, THE Amsterdam News, New York City’s oldest African-American newspaper, published a cartoon by Melvin Tapley that gave vent to a uniquely black ambivalence toward immigration. The cartoon portrayed a downtrodden black figure crouched on the ground, labeled “US Folks,” a double entendre for “us folks” and “U.S. folks.” A chain of other figures, representing Spanish Americans and the foreign born, climb on the back of the crouched black figure, to pluck fruit off the tree of opportunity. Tapley had no illusions about the struggles of these immigrant minorities. Although he portrays them as getting ahead on the backs of blacks, immigrants too must climb over the wall of prejudice, and they reach only the lowest branches on the tree of opportunity.

The accompanying editorial read as follows:

News from the Census Bureau that Spanish-speaking Americans are now able to earn higher incomes than Blacks will not come as a surprise to many of us.

Since our arrival here in 1619 as slaves, Black Americans have watched millions of European immigrants arrive and within a short time hold jobs and reach levels of incomes Blacks were not allowed to attain.

In fact, during the early part of the century the hordes of Irish, Italian, Jewish, Polish, German, Scottish, Greek, Spanish, and other European immigrants frequently replaced Blacks as longshoremen, street-car motormen, construction workers, jockeys, blacksmiths, and able-bodied seamen. Outright, rank racism, and discrimination were the tools by which Blacks have been deprived of work over the decades.

The cartoon and editorial reflect a long strand of black thought, which regards immigrants and immigration with an ambivalence verging on resentment and bitterness. This should come as no surprise. As Lawrence Fuchs reminds us: “In 1883, when Emma Lazarus, a daughter of immigrants, wrote the impassioned words ‘Give me your tired, your poor, your huddled masses yearning to breathe free,’ the Supreme Court undermined the last of the civil rights laws passed by Congress following the Civil War.”3 And 1965 — the year these rights were finally restored — also marked the beginning of a massive influx of immigrants from every part of the world who were thrust into competition with blacks for jobs and opportunity. The crowning irony is that most of these immigrants would not be here, but for the black protest movement that led to immigration reform abolishing the national origins quotas that had chocked off flow of immigrants from nations outside of northern and western Europe.

Let me throw down the gauntlet: my challenge is to think about immigration from the standpoint of this black figure, crouched on the ground as others pluck fruit off the tree of opportunity. Dare we also read the immigration literature — the celebratory narratives of immigrant progress and triumph against adversity — from the point of view of “the man farthest down,” to borrow a phrase from Booker T. Washington?

When white “liberals” speak of immigration, they do it from a long history of themselves using it to give themselves advantage at the expense of others. It’s time they started to think of the wider context of who is being hurt as well as who they can obligate for future political favors. They have no basis for their self-righteousness. The effects of their racism are just as deep and lasting as that of the more honest racist on the other side. It’s time they faced up to it.


Amnesty? Or Open Season on Blacks?

2007-May-01

The big push is on. In both the House and Senate the Cheap Labor Lobby is pushing to open the floodgates on bringing in folks to take jobs from American workers. The SKIL Bill (the SHILL Bill) in the Senate and the Strive Act Ithe Starve Act) in the house will allow huge numbers of guestworkers in to take any job that requires a college degree, and allow amnesty (without ever using the name) for unlimited numbers of illegals to take any job that does not.

If people want to give up their own middle class jobs (or the future jobs of their children or grandchildren) to guestworkers, that is their choice.

But right now I’d like to know where are the jobs coming from that are taken by the one to three million illegal immigrants coming in every year, many of them without technical job skills or good communications skills. Are there that many new jobs being created in this country for them?

Well, no. They are most certainly NOT taking jobs that Americans won’t do. They are taking jobs that Americans were doing, Americans who were already poor or barely making it, until they got replaced.

And it turns out that many of them were Black.

Finally, studies are starting to appear to show the effects of government policies to stop enforcing laws against illegal immigration:

The employment rate of black men, and particularly of low-skill black men, fell precipitously from 1960 to 2000. At the same time, the incarceration rate of black men rose markedly. This paper examines the relation between immigration and these trends in black employment and incarceration. Using data drawn from the 1960-2000 U.S. Censuses, we find a strong correlation between immigration, black wages, black employment rates, and black incarceration rates. As immigrants disproportionately increased the supply of workers in a particular skill group, the wage of black workers in that group fell, the employment rate declined, and the incarceration rate rose. Our analysis suggests that a 10-percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 3.6 percent, lowered the employment rate of black men by 2.4 percentage points, and increased the incarceration rate of blacks by almost a full percentage point.

Unfortunately, the study is behind a for pay firewall, and only excerpts can be found. More data from it:

Between 1960 and 2000, the employment rate for black men plunged from 90 percent to 76 percent; for “low-skilled” black men (defined as high-school dropouts), in particular, it fell from 89 percent to just 56 percent. Between 1980 and 2000, meanwhile, the incarceration rate for black men rose from just 1 percent to nearly 10 percent. A new study considers this shift in light of large-scale immigration, which may have crowded black men out of the labor market and made a shift to crime more appealing. The researchers found that as immigration increased the supply of workers at a particular education level, the employment rate for black men in that category declined, and the incarceration rate rose. From 1980 to 2000, the authors conclude, immigration accounted for roughly a third of the decline in the black employment rate, and about 10 percent of the increase in the incarceration rate for low-skilled African Americans.

George J. Borjas, one of the authors of the above study, also authored the book Heaven’s Door: Immigration Policy and the American Economy, with similar findings:

…the benefits of immigration have been greatly exaggerated and that if the American people allow immigration to continue unabated and unmodified, they are supporting an astonishing transfer of wealth from the poorest people in the country, who are disproportionately minorities, to the richest.

Despite estimates that range into hundreds of billions of dollars, net annual gains from immigration are only about $8 billion.

In dragging down wages, immigration currently shifts tens of billions of dollars per year from workers to employers and users of immigrants’ services.

And:

The new immigrants, Borjas finds, have also increased inequality in this country by depressing the economic opportunities of native-born unskilled workers. They have placed substantial fiscal burdens on the welfare systems of the states in which they congregate, and they have benefited employers of unskilled workers. In sum, today’s immigration “can be viewed as an income-redistribution program, a large wealth transfer” favoring high- over low-income Americans.

Many of these findings are now uncontested. The National Academy of Sciences Research Council (NRC) estimates that immigration was responsible for 44 percent of the decline in real wages experienced by high-school dropouts between 1980 and 1994. Writing in the Public Interest (Fall 1998), Steven Camarota, a scholar at the Center for Immigration Studies, maintained that the wage effects are even “larger than those reported in the NRC study.”

…multiculturalist banalities, it should be noted, happen to coincide neatly with the interests of the principal beneficiaries of today’s immigration–the people who hire the pool cleaners and gardeners in Beverly Hills and East Hampton and who insist on having freshly hand-picked vegetables and salads on their dinner table.

Illegal immigration has been used as a policy by cheap labor advocates to transfer hard-gotten gains over many decades from the poor, many of them Black, to the richest. And the gullible among us have gone along with it, with former Liberal (now Neo-Liberal corporatist) Senator Kennedy leading the charge to help George Bush and the wealthy racists take money from Blacks and give it to themselves (with tiny tidbits to the illegals themselves) by trying (successfully or not) to force Blacks and Hispanics to compete against each other for the limited pool of jobs. And there will be gullible Liberals and Progressives there to help. And perhaps save a few bucks by exchanging their own Black nanny or gardener for a Brown one.


Back to the Middle?!?

2007-Feb-19

I’m listening to Cokie Roberts on NPR this morning. She, Neo-Liberal that she is, is parrotting the DLC DEM party line that Bill and Hillary Clinton are serving the necessary purpose of “bringing the Democratic Party back to the middle” after the “liberal excesses” of the 1970s (such as the Civil Rights Act and similar, I presume).

Let’s be a bit more clear what she means. Liberalism has two aspects at this point in time. First it means social values such as gay rights, abortion rights, minority rights. But it also means economic values, protecting the poor and middle class from being treated as prey by the rich.

When Cokie Roberts and Hillary and all the Neos talk about the Middle, they mean The Rich. They mean ignoring social values as best they can, and concentrating on helping the rich and powerful become even more rich and powerful at our expense.

Just as when Bush uses the words “supporting our troops” he really means “supporting Halliburton and the other Bush financial backers”, so too when the Neo-Liberals use the words “the Middle” they mean “The Rich and their suckups” (such as Cokie Roberts).