Corporations screw everybody...
By Thom Hartmann A...
Corporate executives don’t give a damn about their workers, and it’s all because of Reagan. A new analysis released by the Economic Policy Institute shows just how much of a “screw the workers” mentality today’s corporate executives have. According to EPI, in 2013, the share of corporate income that ended up in the pockets of the men and women who make corporate executives so filthy rich hit its lowest point since 1950.
And, as Think Progress points out, corporate profits “have risen nearly 20 times faster than workers’ incomes since 2008, and on the whole workers have seen a lost decade of stagnant wage growth.”
So, corporations are taking in more and more money, their executives are getting bigger and bigger paychecks, but the workers responsible for all of that wealth are barely seeing a dime of it.
Why is that? Reagan.
Before Reagan came to Washington, corporations knew they had a responsibility to a number of groups. They had a responsibility to their workers, to their community, to their customers, to the institution of the company itself, and to the stockholders. Believe it or not, they actually cared about their workers making decent wages, their customers buying reliable products, and the impact of their behaviors on the community.
When people got laid off, it was considered a "failure of management." Offshoring was unheard of. But then things began to change.
Suddenly, thanks to Chicago School Boys like Milton Friedman, there was this idea floating around that CEO’s and corporations only should do what was best for the shareholders. Screw everyone else. Screw the community, screw the company, screw the customers, and, most of all, screw the workers.
Tragically, Ronald Reagan was a fan of that toxic thinking. So, in the early 1980’s, his administration changed tax laws and rules, to turn CEOs more into shareholders than employees. All of a sudden, CEO’s were getting huge chunks of their salaries not from regular payroll, but from stock options (with a lower tax rate), something that had been previously illegal.
Because of that, CEO’s began to care more and more about what was best for the shareholders, while saying screw you to the workers, to the communities, to the institution of the company itself (if they could chop it up and sell or merge it, that's just fine!) and to their customers. Any loyalty to anyone or anything other than the stockholders was lost.
And that’s why today's CEO’s are raking in hundreds of millions dollars, while workers are seeing their lowest share of corporate income in over six decades.
Just look at UnitedHealthcare’s CEO, Stephen J. Hemsley. According to Forbes, in 2013, Hemsley had a base annual salary of $1.3 million. BUT, thanks to Reagan, Hemsley also has over $700 million in unexercised stock options at a maximum 20% income tax rate. That’s quite the nest egg, and it’s only getting bigger.
America is one of only a very few countries in the developed world that rewards its CEO’s with stock options. That’s crazy. This is bad policy for America, its workers, and for the corporations themselves, and it’s time we change it.
Corporate executives today need to have more skin in the game. They need to be thinking about more than just the rises and falls in their stock.
We need to undo the damage done by Reagan, and make America’s CEOs answerable once again to their companies, their communities, their customers, and their workers. Only then will Americans overall begin to reap the rewards of corporate successes.
Comments
#2
Thom, you need to address RichardofJeffersonCity because he is right on the money. Reagan was a turning point, no doubt, but this has been going on since the end of WW II. Eisenhower himself warned us about it in his farewell address, and JKF learned about it, the hard way.
#3
Corporations screw everyone.... Don't they ever? For over tweny years, I worked for a big corporation that had products approved by the FDA and probably other governmental agencies. Now, I see legal ads on TV for some of the products we sold and advising listeners that, if they had purchased these products, they "may be entitled to substantial, financial compensation" and to call "the law offices of....."
I believe the government has been in cahoots with big corporations far longer than most Americans know. I'm retired now and just getting into issues like Move to Amend and global warming. As for 350.org Madison (WI), 350 Minnesota, and Michigan (Mi-Cats), we're fighting the Enbridge pipelines in the Midwest. These pipelines are conveying tar sands through these states: MN, WI, MI, IL, etc. Governments (both federal and state) continue to rubber-stamp anything Enbridge wants.
However, we're raising awareness in some counties in these states, and county boards are starting to demand environmental impact statements (EIS's) and hearings within their jurisdictions. Some of the stories are amazing, egregious, funny, heart-warming, and generally incredible.
It may take lots of time, but we're going to win!
#4
Reagan Bush 1 2 policies- laws -deregulation- amnesty - busting labor unions - massive unfunded Hidden debt- and Clinton's passing of NAFTA CAFTA GATT is bringing the middle class to near extinction Bring back Glass Seagal Fair practices End Citizens United Enforce laws against illegal EMPLOYERS hiring illegal workers ! Thats the easy way to fix immigration. Who has gutts to do it ?
Cut bloated war profiteers- No more war 'contractors who are robbing US blind. NO private for profit Jails . Medicare for all Increase min wage to $ 10 or more Then watch US economy soar ! FYI GOP will NEVER do ANY of this ! They only favor corps - billionaires. Not our kids education- seniors in poverty- who's pensions have been slashed - who's wages & benefits are down Thanks to millions of illegals taking US jobs C onstruction jobs alone employs 20 % of illegals Landscaping , carpet cleaning, restaurants cooks and more. I have NO ill will for these hard working folks but Americans deserve these jobs . Heavy FINES for illegal employers Problem solved.
#5
You might be interested to watch a short video that is in youtube called We Are All Ine
#6
Unexercised stock options and offshore bank accounts! My tax revenue loss clock is just a blur of flying figures..........Tom Reed!!!!
Off topic,......Bin Laden wins again, more endless war, and a step closer to complete financial ruin for the United States Empire. I wonder how many separate countries we will end up becoming? Might be a good thing.
#7
Does all Thom’s history books start in February 1981 and end February 1989. American presidential administration, including President Carter, has been functionaries of the business agenda of the United States and its constant war economy since the Eisenhower administration. Thom’s attacks on the Reagan administration is justified, but the historical evidence will clearly show that Reagan administration may have been openly friendly to the corporate sector, and enemy of labor. However, the Reagan administration was no exception to the rule they just didn’t apologize for the effects of their policies. They embraced corporate fascism as stated in their motto Trickle Down Economics which is an appropriate metaphor for urinating on the public.
The tide of corporate fascism was coming regardless of who was in the oval office. Limited representative government is a system set up for such control from established power centers like the Military Industrial Complex, Wall St., K Street, the Business Roundtable and other established centers of power. These agendas that were implemented during the Reagan administration came from established power that had been building and concentrating their efforts since WWII.
The Reagan administration was the fountainhead of a sea change that been concealed and protect by other administration. The difference between Reagan and other administration, other administration didn’t trumpet the coming wave of corporate domination, however, the Reagan administration didn’t just trumpet the arrival of Corpo-Fascism; they openly facilitated the government institutions to become corporate strong holds like the Supreme Court.
The corporate takeover of the US has been bipartisan effort with a historic record from the Truman administration to our current corporate lackey-and-Chief-Executive-Officer President Obama. When you single out one administration without historical context to another administration culpability, then you become single minded and obsessed like the conservatives were with Clinton and now with Obama. Yes, Thom, Reagan was a bad man, but so are all the other presidents past and present.
Believing that Ronnie was just one rotten apple that spoiled the barrel is like thinking if Exxon hadn’t spilled oil up in Alaska then BP wouldn’t have saturated the gulf coast with its own massive oil spill. The system is corrupt and easily controlled with money and that’s basis for the current situation. Giving Reagan sole responsibility for CEO largesse’s is letting other administrations off the hook for their collaboration with the corporate sector that's lead us to our current economic and social systems.
#8
Richard- Very well stated! I couldn't agree with you more, and I hate Reagan as much as anyone. - AIW
#9
Still, the middle class embraced this agenda every step of the way. Remember Reagan's speil about how deregulating our "job creators" would result in an explosion of "good, family supporting jobs"? Right. Fast forward to Clinton, who told us all would be swell if we just agree to throw the poor off the cliff -- after giving us NAFTA, significantly increasing the number of poor. To sum up our choices dating back to the 1980s: We looked at the policies and programs implemented from FDR to Reagan, which took the US to its height of wealth and productivity, and decided to reverse course, doing just the opposite.
#10
Actually, upon taking office, President Obama went to work on repairing some of the damage done to Social Security by Bill Clinton. Since then, the Democrats in Congress have voted against Obama's progressive proposals time after time, knowing the public would blame the president. Interestingly, much of the media marketed to libs have virtually ignored Obama's many successes while implicitely supporting the hyper-capitalist ideology (i.e., only those who are of current use to the corporate state are deserving of the basic human rights of food and shelter). How do we explain a "liberal" media that has written VP Joe Biden out of the discussion in an effort to "sell" the neo-liberal (right wing) Hillary Clinton?
#11
You miss a vital point. This isn't the first time the US has been in this mess, when the richest few gained power over govt, to the great harm of the country. Each time in the past, the poor and middle class, workers and the jobless, ultimately united to push back -- to everyone's benefit. That can't happen this time. This time, the proverbial masses were successfully divided and conquered. That said, the hysteria about "illegals" is silly. It's illegal to hire illegal immigrants, and the penalties are very high. Not many companies can afford to take that risk. When you apply for a job, you're required to give full info re birth place/date, education and employnent history, etc., and employers are required to verify this. There is no reason to risk hiring an "illegal" because much has been done since the 1990s to increase the number of people who can be put to work at min. wage or less/no workers' rights.
#12
We definately need some laws and regulations to protect the people and the economy of The United States from corpoate greed. The heads of businesses take Business 101 to heart, hire your labor as cheap as possible, buy your materials as cheap as possible, and sell your product or services for as much as possible. That's good for business but not so good for the workers and the consumers. I often hear republicans complaining about how too much government regulation is hurting business and how regulation cost are passed down to the consumers. What's hurting consumers is the fact that there are not enough regulations to protect workers and consumers from corpoate greed. Do you think that the more money corperations make the more they will pay their workers? No, way that's going to happen in the USA unless they are made to do it. Corperations should have to pay taxes on what they earn in this country weather they are headquartered here or not. We buy so much stuff that is made in foreign countries that we used to make here. All of this outsourcing needs to stop and insourcing needs to start back up again. Free trade agreements have hurt the American workers more than it has helped them. FAIR trade agreements are what we need, fair for the American workers. If we were manufacturing all of the stuff we used to used to manufacture for ourselves, unemployment would be wiped out. Voting for the right political candidates that will collectivly make lobbying illeagle, regulate corporations, banks, campaign finance, and promote good wage laws is what it's going to take for us to have liberty and justice for all except for the liberty to screw over the American people.
#13
Corporate policies once considered illegal now commen place.
Why isnt there a link after every blog to electronically sign a petition to
Change things instead of just ranting about them?
I can yell at the wind.
#14
About this very timeframe (Reagan/Bush), I recall my company put out a life insurance policy on me that was payable just to them. I think we had the option to decide on whether to allow it or not, but seriously given their inclination to lay people off when the going got a little tough (it was an industry dependent on government contracts and there was a war on (deja vu)), not like there was really much choice.
This was the first blatant change in the way things were going to be from now on that really sunk in. I left the company on good terms a few years later (good people at that location but the rest of the company oy). Ten years there, three different corporations owned us during that period. (One since, a few more prior.)
And then I ended up at a different, bigger company that really was heavily entrenched in the employees as sheeple mindset, very post-Reagan flavored. I think the bigger the company, and the farther away the head mucky mucks are, the more it's like that. And with their every other year reorganizations, farther and farther away is what you become to them.
After leaving them (or rather after their leaving me) a dozen or so years later, I tried my hand at contracting, about all that was left in my field for folks my age, and two of those and too much time in between them was about all I could take.
#15
fm: Yes, I've heard of Dead Peasants Life Insurance. I suppose that is appropriately named. It used to be that only key top level people were used in this way so that the company would profit from their deaths. The practice has spread over the years to include even low-level employees...hence...dead peasants. Wives and families would never get a penny and usually the employee or the families knew nothing about the insurance anyway. Only the company would rake in the profit from their now dead employees. I read about this back in about 2008 for the first time. Now, I understand why these companies tried their darnedest to work us to death through mega-stress.
http://www.businessinsider.com/is-there-a-dead-peasant-life-insurance-po...
#16
The idea that buying stock in a company is an 'investment' is silly. If I buy stock from Mr. A, none of the exchanged funds benefit the company. The only function of stock is to get a cut of the wealth produced by the company's workers. If the company pays less to its workers, more can be given to the stockholders. Somehow that sounds like a vampire system which bleeds wealth out of a company to the detriment of the workers to enrich a few who do nothing in exchange to benefit the company. Worker ownership is a better system since the wealth they create can be more equally distributed. We need to drop the myth that stock ownership does something to benefit a company.
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The CEO's salary comes directly off the top of the companies profits. Or in many cases it is added to the companies losses. Why would anyone invest in a company that the CEO makes millions of dollars per year? This money should go back to R&D, Company growth or the shareholders as dividends. Nobody is worth more than a million dollars per year. We also need to eliminate the many ways that they receive salary. Stock options, Benefits such as life insurance, club memberships, private jets, Homes, cars etc.