Published on 20 Jun 2018
Published on 20 Jun 2018
January 5, 2018
“It is said that no one truly knows a nation until one has been inside its jails. A nation should not be judged by how it treats its highest citizens, but its lowest ones.” ― Nelson Mandela
This is the tale of two Americas, where the rich get richer and the poor go to jail.
Aided and abetted by the likes of Attorney General Jeff Sessions—a man who wouldn’t recognize the Constitution if it smacked him in the face—the American dream has become the American scheme: the rich are getting richer and more powerful, while anyone who doesn’t belong to the power elite gets poorer and more powerless to do anything about the nation’s steady slide towards fascism, authoritarianism and a profit-driven police state.
Not content to merely pander to law enforcement and add to its military largesse with weaponry and equipment designed for war, Sessions has made a concerted effort to expand the police state’s power to search, strip, seize, raid, steal from, arrest and jail Americans for any infraction, no matter how insignificant.
Now Sessions has given state courts the green light to resume their practice of jailing individuals who are unable to pay the hefty fines imposed by the American police state. In doing so, Sessions has once again shown himself to be not only a shill for the Deep State but an enemy of the people.
First, some background on debtors’ prisons, which jail people who cannot afford to pay the exorbitant fines imposed on them by courts and other government agencies.
Congress banned debtors’ prisons in 1833.
In 1983, the U.S. Supreme Court ruled the practice to be unconstitutional under the Fourteenth Amendment’s Equal Protection clause.
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“Despite prior attempts on the federal level and across the country to prevent the profound injustice of locking people in cages because they are too poor to pay a debt,” concludes The Atlantic, “the practice persists every day.”
Where things began to change, according to The Marshall Project, was with the rise of “mass incarceration.” As attorney Alec Karakatsanis stated, “In the 1970s and 1980s, we started to imprison more people for lesser crimes. In the process, we were lowering our standards for what constituted an offense deserving of imprisonment, and, more broadly, we were losing our sense of how serious, how truly serious, it is to incarcerate. If we can imprison for possession of marijuana, why can’t we imprison for not paying back a loan?”
By the late 1980s and early 90s, “there was a dramatic increase in the number of statutes listing a prison term as a possible sentence for failure to repay criminal-justice debt.” During the 2000s, the courts started cashing in big-time “by using the threat of jail time – established in those statutes – to squeeze cash out of small-time debtors.”
Fast-forward to the present day which finds us saddled with not only profit-driven private prisons and a prison-industrial complex but also, as investigative reporter Eli Hager notes, “the birth of a new brand of ‘offender-funded’ justice [which] has created a market for private probation companies. Purporting to save taxpayer dollars, these outfits force the offenders themselves to foot the bill for parole, reentry, drug rehab, electronic monitoring, and other services (some of which are not even assigned by a judge). When the offenders can’t pay for all of this, they may be jailed – even if they have already served their time for the offense.”
Follow the money trail. It always points the way.
Whether you’re talking about the government’s war on terrorism, the war on drugs, or some other phantom danger dreamed up by enterprising bureaucrats, there is always a profit-incentive involved.
The same goes for the war on crime.
At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.
Sessions’ latest gambit plays right into the hands of those who make a profit by jailing Americans.
Sharnalle Mitchell was one such victim of a system for whom the plight of the average American is measured in dollars and cents. As the Harvard Law Review recounts:
On January 26, 2014, Sharnalle Mitchell was with her children in Montgomery, Alabama when police showed up at her home to arrest her. Mitchell was not accused of a crime. Instead, the police came to her home because she had not fully paid a traffic ticket from 2010. The single mother was handcuffed in front of her children (aged one and four) and taken to jail. She was ordered to either pay $2,800 or sit her debt out in jail at a rate of fifty dollars a day for fifty-nine days. Unable to pay, Mitchell wrote out the numbers one to fifty-eight on the back of her court documents and began counting days.
This is not justice.
This is yet another example of how greed and profit-incentives have not only perverted policing in America but have corrupted the entire criminal justice system.
As the Harvard Law Review concludes:
[A]s policing becomes a way to generate revenue, police start to “see the people they’re supposed to be serving not as citizens with rights, but as potential sources of revenue, as lawbreakers to be caught.” This approach creates a fugitive underclass on the run from police not to hide illicit activity but to avoid arrest for debt or seizure of their purportedly suspicious assets… In turn, communities … begin to see police not as trusted partners but as an occupying army constantly harassing them to raise money to pay their salaries and buy new weapons. This needs to end.
Unfortunately, the criminal justice system has been operating as a for-profit enterprise for years now, covertly padding its pockets through penalty-riddled programs aimed at maximizing revenue rather than ensuring public safety.
All of those seemingly hard-working police officers and code-enforcement officers and truancy officers and traffic cops handing out ticket after ticket after ticket: they’re not working to make your communities safer—they’ve got quotas to fill.
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Same goes for the courts, which have come to rely on fines, fees and exorbitant late penalties as a means of increased revenue. The power of these courts, magnified in recent years through the introduction of specialty courts beyond your run-of-the-mill traffic court (drug court, homeless court, veterans court, mental health court, criminal court, teen court, gambling court, prostitution court, community court, domestic violence court, truancy court), is “reshaping the American legal system—with little oversight,” concludes the Boston Globe.
And for those who can’t afford to pay the court fines heaped on top of the penalties ($302 for jaywalking, $531 for an overgrown yard, or $120 for arriving a few minutes late to court), there’s probation (managed by profit-run companies that tack on their own fees, which are often more than double the original fine) or jail time (run by profit-run companies that charge inmates for everything from food and housing to phone calls at outrageous markups), which only adds to the financial burdens of those already unable to navigate a costly carceral state.
“When bail is set unreasonably high, people are behind bars only because they are poor,” stated former Attorney General Loretta Lynch. “Not because they’re a danger or a flight risk — only because they are poor. They don’t have money to get out of jail, and they certainly don’t have money to flee anywhere. Other people who do have the means can avoid the system, setting inequality in place from the beginning.”
In “Policing and Profit,” the Harvard Law Review documents in chilling detail the criminal justice system’s efforts to turn a profit at the expense of those who can least afford to pay, thereby entrapping them in a cycle of debt that starts with one minor infraction:
In the late 1980s, Missouri became one of the first states to let private companies purchase the probation systems of local governments. In these arrangements, municipalities impose debt on individuals through criminal proceedings and then sell this debt to private businesses, which pad the debt with fees and interest. This debt can stem from fines for offenses as minor as rolling through a stop sign or failing to enroll in the right trash collection service. In Ferguson, residents who fall behind on fines and don’t appear in court after a warrant is issued for their arrest (or arrive in court after the courtroom doors close, which often happens just five minutes after the session is set to start for the day) are charged an additional $120 to $130 fine, along with a $50 fee for a new arrest warrant and 56 cents for each mile that police drive to serve it. Once arrested, everyone who can’t pay their fines or post bail (which is usually set to equal the amount of their total debt) is imprisoned until the next court session (which happens three days a month). Anyone who is imprisoned is charged $30 to $60 a night by the jail. If an arrestee owes fines in more than one of St. Louis County’s eighty-one municipal courts, they are passed from one jail to another to await hearings in each town.
The prison population continues to grow because of a glut of laws that criminalize activities that should certainly not be outlawed, let alone result in jail time. Overcriminalization continues to plague the country because of legislators who work hand-in-hand with corporations to adopt laws that favor the corporate balance sheet. And when it comes to incarceration, the corporate balance sheet weighs heavily in favor of locking up more individuals in government-run and private prisons.
As Time reports, “The companies that build and run private prisons have a financial interest in the continued growth of mass incarceration. That is why the two major players in this game—the Corrections Corporation of America and the GEO Group—invest heavily in lobbying for punitive criminal justice policies and make hefty contributions to political campaigns that will increase reliance on prisons.”
It’s a vicious cycle that grows more vicious by the day.
According to The Atlantic, “America spends $80 billion a year incarcerating 2.4 million people.” But the costs don’t end there. “When someone goes to prison, nearly 65 percent of families are suddenly unable to pay for basic needs such as food and housing… About 70 percent of those families are caring for children under the age of 18.”
Then there are the marked-up costs levied against the inmate by private companies that provide services and products to government prisons. Cereal and soup for five times the market price. $15 for a short phone call.
The Center for Public Integrity found that “prison bankers collect tens of millions of dollars every year from inmates’ families in fees for basic financial services. To make payments, some forego medical care, skip utility bills and limit contact with their imprisoned relatives… Inmates earn as little as 12 cents per hour in many places, wages that have not increased for decades. The prices they pay for goods to meet their basic needs continue to increase.”
Worse, as human rights attorney Jessica Jackson points out, “the fines and fees system has turned local governments into the equivalent of predatory lenders.” For instance, Jackson cites:
Washington state charges a 12% interest rate on all its criminal debt. Florida adds a 40% fee that goes into the pockets of a private collections agency. In California, penalties can raise a $100 fine to $490, or $815 if the initial deadline is missed. A $500 traffic ticket can actually cost $1,953, even if it is paid on time. And so we are left with countless tales of lives ruined—people living paycheck to paycheck who cannot afford a minor fine, and so face ballooning penalties, increasing amounts owed, a suspended license, jail time, and being fired from their jobs or unable to find work.
This isn’t the American Dream I grew up believing in.
This certainly isn’t the American Dream my parents and grandparents and those before them worked and fought and sacrificed to achieve.
Now you can shrug all of this away as a consequence of committing a crime, but that just doesn’t cut it. Especially not when average Americans are being jailed for such so-called crimes as eating SpaghettiOs (police mistook them for methamphetamine), not wearing a seatbelt, littering, jaywalking, having homemade soap (police mistook the soap for cocaine), profanity, spitting on the ground, farting, loitering and twerking.
There is no room in the American police state for self-righteousness. Not when we are all guilty until proven innocent.
As I make clear in my book Battlefield America: The War on the American People, this is no longer a government “of the people, by the people, for the people.”
It is fast becoming a government “of the rich, by the elite, for the corporations,” and its rise to power is predicated on shackling the American taxpayer to a debtors’ prison guarded by a phalanx of politicians, bureaucrats and militarized police with no hope of parole and no chance for escape.
By John Kaminski
Dishonest officials fail to explain bizarre fires and chaotic shooting
It’s almost as if our consciences have been deliberately and systematically aborted, or consigned to insignificance by the puppetmasters who insist that everyone should believe their government even when they know it is lying.
This is the new freedom those who are controlled by Jews speak about.
What do you see, my friend, when you behold your own reflection in the splintered shards of shattered glass that once was the mirror of your American dream?
Do you dream at night of directed energy beams like ones that ravaged California wine country and incinerated people in their own beds because their houses were located on land somebody with political clout wanted to steal?
What would it feel like to be incinerated in your own bed? Is your home located in some future government plan that would require it to be demolished? Will they blame the fire on a natural disaster? Except when you look closely at it, it was the most unnatural firestorm on record as it incinerated only houses and cars yet left unburned the very flammable vegetation surrounding these utterly demolished homesteads?
Or perhaps you dream you’re at a concert with people shooting at you from all directions. You see people bleeding. Later you hear there were multiple shooters and also crisis actors. The cops insist there was only one shooter. Many who insist the cops are lying are shortly thereafter found dead in a string of unlikely mishaps. And shortly after that it was discovered the FBI was in place at the crime scene for a week in advance! And then suddenly the cops stop talking about what happened.
If you have a conscience and are attuned to current political events you may have noticed the number of people who are trying to defend our now defunct Constitution first being held illegally in abusive conditions before being given long prison terms for protesting the criminal federal takeover of the American West. The promise Trump made about putting Hillary in jail should first free the Hammond farmers whose land figures in the notorious sale of America’s uranium to Russia.
And by all means, set the Bundys free! This is the ultimate extermination of individuals, sacrificed on the bloody altar of the state.
Here’s a religious family defending Constitutional sanity being illegally jailed for two years on bogus terrorism charges. And they are brought to all their court hearings in chains after being kept in solitary confinement! This is a message to all those who think they can demand their Constitutional rights or those who sound alarms when their own government breaks laws that everyone else must follow.
This is what we see today in the scrambled pieces of the broken mirror in our minds.
The government is showing everyone what it will do to you if you dare to fight for your Constitutional rights, which are still in force despite what some crooked Jewish judge might tell you.
This is both tyranny and treason, and the government endorses it. We must not allow it.
Yet the idea that every American has an equal opportunity to move up in life is false.
Social mobility has declined over the past decades, median wages have stagnated and today’s young generation is the first in modern history expected to be poorer than their parents. The lottery of life – the postcode where you were born – can account for up to two thirds of the wealth an individual generates.
The growing gap between the rich and the poor, the old and the young, has been largely ignored by policymakers and investors until the recent rise of anti-establishment votes, including those for Brexit in the UK and for President Trump in the US. This is a mistake.
Inequality is much more than a side-effect of free market capitalism. It is a symptom of policy negligence, where for decades, credit and monetary stimulus shortcuts too easily substituted for structural reform, investment and economic strategy. Capitalism has been incredibly successful at boosting wealth, but it has failed at redistributing it. Today, without a push to redistribute wealth and opportunity, our model of capitalism and democracy may face self-destruction.
The widening of inequality has deep historical roots. Keynes’ interventionist policies worked well during the post-war recovery, as fiscal stimulus for the reconstruction boosted demand for US goods from Europe and Japan.
But soon the stimulus faded. The U.S. found itself with declining growth and rising inflation at a time when it was mired in the Cold War and Vietnam conflicts.
The baby boomer generation demanded higher living standards. The response was the Nixon shock in 1971: a set of policies which moved away from the gold standard, initiating the era of fiat money and free credit.
Credit was the answer to declining growth and rising inequality: if you couldn’t afford university, a new house or a new car, Uncle Sam would lend you the key to the American Dream in the form of that extra loan you needed. Over the following decades, state subsidies to private credit became popular, spreading to the U.K. and Europe.
It was the start of debt-based democracies. Private debt outgrew GDP four times in the US and Europe over the following decades up to the 2008 financial crisis, accompanied by the deregulation of financial markets and of banks. The rest is history: nine long years after the crisis, our economies are still healing from excess debt, and regulators are still working on strengthening our financial system. Inequality, however, has deepened even further. Has capitalism failed?
The deus ex-machina of capitalism was competition; a distorted interpretation of Adam Smith’s invisible hand. Competition among individuals and companies created efficient markets, increasing production and GDP. Government intervention became unnecessary: any wealth generated in the economic process would automatically trickle down from the haves to the have-nots. Greed, the unshackled pursuit of individual wealth, turned from vice to virtue.
Today, we know the neoliberal policies initiated by Reagan and Thatcher have been successful at generating growth: the United States and the UK have outpaced others. But we also know that the same neoliberal policies have failed at redistributing resources and opportunity. If individual economic success is deemed the highest possible achievement, poverty becomes justified by someone’s lack of effort or ability. But with rising social and corporate inequality, productivity has stagnated, lowering potential growth rates for the whole economy. The result has been a self-reinforcing cycle of lower productivity, lower interest rates, higher debt levels and even higher inequality.
If trickle-down and neoliberalism have failed the good news is there are some policy fixes. One of them is taxation, combined with investment in productive infrastructure and education. The bad news is policy is going exactly in the opposite direction, especially in the US and the UK.
The Trump Administration’s tax breaks may boost markets, but will likely increase public debt even further, calling for more cuts to education and healthcare.
Defenders of neoliberal policies like Mr Ryan argue that equality of opportunity is fair, while equality of outcome – which Milton Friedman called socialism – is unfair and not meritocratic. The reality is that both wealth and income inequality are closely linked. Richer parents can afford to send their children to better schools: nearly half of the variation in wages of sons in the United States can be explained by looking at the wages of their fathers a generation before. That compares to less than 20% in relatively egalitarian and tuition-free countries like Finland, Norway and Denmark. The story is similar in the UK, where over half of judges, MPs and CEOs of UK companies attended expensive private schools, while around one third of children live below the poverty line – 67% of those from working families. Better education means better opportunities and more wealth later in life: the cycle reinforces itself from generation to generation.
But today this cycle may be now at breaking point. If “let-them-eat-credit“ policies allowed the 99% to borrow and increase their well-being over the past decades, interest rates have now reached rock-bottom and private debt levels are at their highest. There are signs that monetary policy may have reached its limits – creating asset bubbles and keeping zombie companies alive – and that it may no longer be able to support this ever-growing debt mountain.
The risk is that rising inequality, lower social mobility and the disenfranchisement of younger generations could result into even more polarised and short-sighted politics, creating a populist trap. The US and the UK could already be stuck: many of the policies on the table in both countries are far from sustainable, and damaging for the people they were to protect. Brexit or an exit from NAFTA are both striking examples.
Continental Europe and Scandinavia – even though far from perfect – have so far escaped from the worst of the populist threat of the Front National, Alternative for Germany, True Finns or the Danish People’s Party, perhaps thanks to their stronger safety net and welfare policies. However, these parties continue to gain ground, as recent elections in Germany and Austria show.
There are two ways we think the world may exit this loop of rising inequality, political polarisation and short-sighted politics. One is to make the poor richer through education and investment. The other is to make the rich poorer.
Last year, the IMF ditched neoliberalism and recommended measures to redistribute wealth and opportunity. This policy mix could reduce inequality, boost political stability and improve long-term growth. In its five-year plan, China’s leadership recently announced a renewed focus on reducing inequality. The US and UK, too, should acknowledge they have a structural, not a cyclical problem, that cannot be solved with one more round of monetary stimulus. Redistribution should be coupled with a reform of the financial system, still too centered on risk-taking and debt incentives; as well as changes to the tax system, which still places too much burden on income and too little on assets.
The alternative to redistribution is instability and crisis. Inequality provides fertile ground for populist parties to harvest support. The US, for instance, has recently been downgraded from full democracy to a flawed democracy. Over time, populist policies can destabilize democracies, turning them towards nationalism, militarism and anti-capitalism. The outcome of populist regimes in history ranges from higher taxes to nationalizations and violations of private property, to commercial and military conflicts.
Neoliberal theory and its policy offshoots have failed. Promoting individual happiness as our utmost ethos is self-defeating, as deeply divided societies turn unstable and unhappy. We need a new American dream based on equality and sustainable growth. The cost of sharing opportunity and wealth may be high for today’s elites, but the alternative is far worse.
With stagnant wages, rising cost of living (see shelter inflation), and a lack of savings, Americans are retiring later than ever before (if at all). But in a double-whammy for seniors, whose health is declining, their lifespans are shrinking offering them little if any time to enjoy the end of the American Dream walking hand in hand into the sunset on a faraway beach…
As Bloomberg reports, data released last week suggest Americans’ health is declining and millions of middle-age workers face the prospect of shorter, and less active, retirements than their parents enjoyed.
Here are the stats:
The U.S. age-adjusted mortality rate – a measure of the number of deaths per year – rose 1.2 percent from 2014 to 2015, according to the Society of Actuaries.
That’s the first year-over-year increase since 2005, and only the second rise greater than 1 percent since 1980.
At the same time that Americans’ life expectancy is stalling, public policy and career tracks mean millions of U.S. workers are waiting longer to call it quits.
Almost one in three Americans age 65 to 69 is still working, along with almost one in five in their early 70s.
And finally, Americans in their late 50s already have more serious health problems than people at the same ages did 10 to 15 years ago, according to the journal Health Affairs.
Bloomberg’s Ben Steverman points out that researchers have offered many theories for why Americans’ health is getting worse. Princeton University economists Anne Case and Angus Deaton, a Nobel Prize winner, have argued that an epidemic of suicide, drug overdoses and alcohol abuse have caused a spike in death rates among middle-age whites.
Higher rates of obesity may also be taking their toll. And Americans may have already seen most of the benefits from previous positive developments that cut the death rate, such as a decline in smoking and medical advances like statins that fight cardiovascular disease.
So there you have it – The New American Dream: Work Longer, Live Sicker, Die Sooner…
With permission from
Paul Craig Roberts
Sept 4, 2017
Today is Labor Day, a difficult day to celebrate now that American labor has been cast aside and US jobs offshored and given to foreigners. The remainder of the jobs is slated to be replaced by robotics.
Friday’s payroll jobs report was full of bad news. Full-time jobs declined by 166,000. The meager 156,000 new jobs claimed are really only 115,000 net of the prior month’s revision, and this 115,000 jobs estimate is within the range of statistical insignificance. In other words, there is no confidence that the jobs are actually there.
The US work force continues to develop a Third Word complexion of lowly paid part-time domestic service employment. The American Dream continues its closedown.
Meanwhile the government tells us that we are at full employment with an unemployment rate of 4.4%.
Photo Credit: The Tyee
The following is an excerpt from the new book Survival of the Richest: How the Corruption of the Marketplace and the Disparity of Wealth Created the Greatest Conspiracy of All by Donald Jeffries (Skyhorse Publishing, July 2017), available for purchase from Amazon, Indiebound and Skyhorse:
“The few own the many because they possess the means of livelihood of all. … The country is governed for the richest, for the corporations, the bankers, the land speculators, and for the exploiters of labor.” —Helen Keller
Most people shy away from the simple question; do those who are paid the most in our society deserve to be compensated like that? If a particular individual was the driving force behind a cure for all cancer, or instrumental in significantly increasing the human life span, I think most everyone would agree that their value to society would be such that they’d be entitled to millions, even billions of dollars. But the world’s wealthiest individuals do not, in fact, seem to have contributed in such a way that they have earned a distinction placing them above the masses, garnering more money in less than a year than what virtually everyone else earns in a lifetime. According to the Bloomberg Billionaires Index, which ranks the world’s richest three hundred people, these incredibly wealthy elite saw their net worth jump by $52.4 billion in 2013. On July 21, 2016, Bloomberg would recount how Amazon founder Jeff Bezos had surpassed Warren Buffet as the third richest person in the world, thanks to a tidy increase of $5.4 billion in his personal fortune in 2016. Meanwhile, the vast majority of workers, who desperately need a significant pay raise, are simply not getting one.
The wealthiest people in our society don’t appear to be improving any lives but their own, and they don’t seem to have special qualities or skills that explain why they’re being compensated so much more extravagantly than the rest of us. Warren Buffet, like so many very wealthy people, made his fortune with investments. Multi-billionaire Mexican Carlos Slim Helú is another whose occupation is investor. When we examine any list of the richest Americans, we find names such as notorious corporate raider Carl Icahn, whose more polite title is investor, George Soros, who is yet another investor, hedge fund managers John Paulson and James Simons, and plenty of financiers, bond mavens, chairmen, and others with predictable titles that assure us, whatever they do, they aren’t positively impacting the lives of the bulk of humanity. The very wealthy, in all reality, can generally be defined as those who are abnormally good at making money.
Bill Gates’s Microsoft was primarily known for creating an operating system with numerous flaws, charging excessive prices for all the unnecessary upgrades and new versions, and engaging in monopolistic practices. Apple founder Steve Jobs would declare that Gates had “shamelessly ripped off other people’s ideas.” Jobs had a right to feel that way; most people think that Microsoft stole many essential features from Apple. Of course, many believe that Jobs himself stole from Xerox. Gates acknowledges that advances in technology, including robotics, “will reduce demand for jobs particularly at the lower end of the skill set.” Senator Jeff Sessions, now President Trump’s attorney general, was a fierce critic of Gates’s call for increased foreign visa workers at the same time Microsoft announced plans to lay off eighteen thousand workers in 2015. The Heritage Foundation has estimated that the disastrous June 2013 immigration “reform” bill, which Gates and every other pillar of the establishment supported, would cost taxpayers some $6.3 trillion over the next few decades.
Like almost all modern corporate leaders, Jobs used cheap, if not slave, labor in foreign countries to build his beloved iPhones. Both Herbert Hovenkamp, a law professor at the University of Iowa, and Bill Black, author of The Best Way to Rob a Bank is to Own One, referred succinctly to Jobs as “a walking antitrust violation.” Walter Isaacson, author of a biography on Jobs, declared that the founder of Apple “always believed that the rules that applied to ordinary people didn’t apply to him.” Bill Gates is about as pedestrian a personality as one can imagine; in an interview with Christine Amanpour, he declared that “Clearly, you can’t raise the taxes we need just by going after that 1 percent.” In his 2014 annual Bill and Melinda Gates Foundation letter, Gates expounded upon his delusional misinformation, writing, “By almost any measure, the world is better than it has ever been.” Well, it’s certainly become a better place for him. If it could be demonstrated that either Gates or Jobs had single-handedly invented the personal computer, they might indeed be worth their fortunes. By any definition, that clearly isn’t the case.
We hear regular, nonsensical references in the mainstream media about the difficulty of finding suitable executive talent and thus the need to compensate them extravagantly in order to beat the competition. It is never explained just what talent one requires to be an executive in a large corporation. One can’t quantify this kind of talent in any measurable way, the way one can assess the skills of an athlete, a musician, or an artist. Many powerful corporate leaders attain their positions in the most traditional manner, through simple nepotism. Sam Walton’s children, for example, exhibited no talent whatsoever in inheriting their father’s fortune. The Koch brothers inherited an oil refinery firm from their father. Fidelity’s Abigail Johnson is merely continuing the family tradition of running the company her grandfather established. Donald Trump began life as the son of a multimillionaire, which made the arduous climb to billionaire a bit easier. Bill Gates did not come from a “middle-class” family; his parents were quite wealthy, and his father was on the board of Planned Parenthood. Warren Buffet’s climb up the corporate ladder was undoubtedly aided by the fact he was the son of a United States congressman. Nike founder and chairman Philip Knight’s father was a newspaper publisher. Hedge fund magnate James H. Simons grew up the son of a factory owner. Any present-day Rockefeller, Rothschild, Carnegie, Mellon, Morgan, etc. invariably succeeded because of their names and their inherited wealth, while Facebook cofounders Mark Zuckerberg, Dustin Moskovitz, Eduaro Salverin, Chris Hughes, and Justin Rosenstein all came from wealthy families and met at the ultimate breeding ground for the elite, Harvard University. Horatio Alger stories, if they ever existed to any great degree, are clearly a thing of the past.
Amazon founder Jeff Bezos spent much of his childhood on a 25,000-acre Texas ranch with his maternal grandfather, who was a regional director of the US Atomic Energy Commission. Liliane Bettencourt, presently estimated to be worth more than $33 billion, earned her riches by inheriting L’Oreal, one of the world’s biggest companies, from her father. Google founder Larry Page’s father Carl was a pioneer in computer science and artificial intelligence. Forest Mars Jr., worth some $21 billion, achieved his success through inheriting the giant candy company from his father, who had inherited it from his grandfather. His siblings, John and Jacqueline, are also worth $21 billion each. They mirror the work ethic of Sam Walton’s children, yet undoubtedly many Americans, from all income levels, would argue that they earned this incredible wealth. When he uttered the statement, “You didn’t build that,” Barack Obama inadvertently tapped into the strong personal belief most Americans possess, that they have attained whatever success they’ve achieved solely through hard work or their own brilliance. Those who make it almost always have been fortunate in different ways. They might have been born into a supportive, financially stable family. They might have known someone who opened the right doors for them. They might have been blessed with a set of genes that made them physically attractive enough that others want to help them. They might simply have been in the right place at the right time. For whatever reason, human beings seem to blanch at the notion that they’ve been lucky. Senator Elizabeth Warren echoed Obama’s comments, saying, “There is nobody in this country who got rich on his own.”
Author Chrystia Freeland, in her 2012 book Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else, explored the attitudes of these unfathomably wealthy people. She found that each of them felt strongly that they’d earned their great wealth. Just as unanimously, though, they all thought that at least some of their billionaire brethren hadn’t earned theirs. Oddly, this attitude seems just as prevalent among the upper middle class, the middle class, and even many in the lower middle class. I can’t tell you how many times I’ve heard working-class people moan that “I worked hard for what I got,” or “nobody helped me.” When talking about redistributing the wealth, I’ve often been met with fierce opposition from those who have no wealth to share, and thus would benefit in some way from such a proposition. They love to counter with statements such as, “How do you define rich?” or “I guess rich means anyone who has more than you.” Another perennial favorite, from those who’ve made it as well as those who haven’t, is, “If you divided up all the money in the world evenly, in a few years, the same people would have it all again.” This is, of course, a very convenient defense for those who have hoarded all the wealth. Why should society even bother to distribute the wealth more fairly, when everyone knows the money would just magically gravitate back to them?
Slightly below this lofty top level of multibillionaire investors and the like are entertainers and athletes. By 2016, the average salary for a Major League Baseball player had risen to $4.4 million a year. In the NBA, it was an even more incomprehensible $5.2 million annually. NHL players average $2.5 million, and NFL players “only” $2.1 million each year. The biggest movie stars are in the “$20 million club,” indicating they command that kind of salary per picture. Tom Hanks hauled in as much as $49 million from The Da Vinci Code. Often these figures don’t factor in the considerable residuals that can result from a huge box office hit. Tom Cruise made $290 million from his four Mission: Impossible films alone. Keanu Reeves, meanwhile, piled up $262 million from the three Matrix movies. Reeves is an unusually generous sort and gave up some profits from his back-end points in order to help finance the special-effects team and costume designers for the sequels. By the end of the long-running Friends television show, each of the six cast members was garnering a million dollars per episode. Even if one accepts categorically that these athletes and entertainers are that exceptional and wildly talented, can anyone maintain they deserve to be so lavishly compensated?
By the end of 2013, the distribution of wealth in America had become so unequal that we no longer could be classed among the First World, developed nations in this category. According to the Credit Suisse Global Wealth Databook, 75.4 percent of all wealth in the United States belongs to the richest 10 percent of the people. Comparable nations (none of them as bad as the United States) in terms of wealth disparity include Chile, Indonesia, and South Africa. The bottom 90 percent of American citizens own only 24.6 percent of the aggregate wealth, while the norm for developed countries is around 40 percent. Meanwhile, under Obama, who was often accused of being a socialist, the wealthiest 1 percent of Americans received 95 percent of the income gains during the alleged economic “recovery.” During his 2016 presidential run, Bernie Sanders would embrace this issue with statements such as “something is profoundly wrong when the twenty richest people in our country own more wealth than the bottom half of the American population—150 million people.” FactCheck.org claimed that the situation for the 40 percent at the bottom of the ladder has grown even more dismal, declaring that by early 2016, they actually had a combined negative financial worth. Every statistic on income and wealth disparity supports the notions of Ferdinand Lundberg, who postulated in his 1937 book America’s Sixty Families that, “The United States is owned and dominated today by a hierarchy of the richest families, buttressed by no more than 90 families of lesser wealth.”
While millions of Americans have lost their homes and were financially devastated by this undeclared Depression, the wealthy continue to be rescued from their own mistakes, time and time again. The 2008 Banker Bailout was one of America’s most disgraceful acts. With foreclosures and bankruptcies at all-time highs, the criminal banks who orchestrated it all were given the kind of security net denied to those suffering individuals across America. When individual Americans experience a terrible financial setback, they are told it’s their own fault and to try harder and pull up their bootstraps. Helping them somehow is a handout most Americans resent giving. But when the wealthiest groups in our society—the big banks, General Motors, etc.—make bad decisions and should ostensibly suffer the consequences, they aren’t penalized at all. They don’t feel the wrath of the vaunted marketplace, as powerless individual citizens do.
The liberal political advocacy group Common Cause would report that the banks bailed out by the taxpayers certainly didn’t stop lavishing excessive benefits on their top executives. Lloyd C. Blankfein, CEO of Goldman Sachs, was given over $70 million in total compensation in 2008, despite his company having been gifted $10 billion in the bailout. J. P. Morgan Chase’s James S. Dimon earned nearly $28 million, while his company had taken $25 billion from the taxpayers. The list goes on, as huge conglomerates such as American Express, Bank of America, and Capital One bestowed millions on their CEOs, only months after begging for handouts from the unwashed masses who were struggling to make ends meet, and to whom were still being told to sacrifice for the good of the country. All told, nine banks that begged the struggling taxpayers to bail them out awarded cumulative bonuses of nearly $33 billion in that same year of 2008, including $1 million each to some five thousand employees. Exposing the lie that these economic excesses are connected to the ironclad manifestations of an all-knowing marketplace, six of the nine banks paid out more in bonuses than they earned in profit. The Obama administration reacted to these shameful figures with a statement by Robert Gibbs, “The president continues to believe that the American people don’t begrudge people making money for what they do.” Citigroup, which received about 25 percent of the bailout money going to the nine banks, bestowed an incredible $98.9 million in compensation on Andrew Hall, head of their energy-trading unit Phibro LLC, which dwarfed the $38 million they paid CEO Vikram Pandit in 2008.
As has been widely reported, only a few relatively small fry—loan officers and the like—were ever prosecuted for crimes related to the 2008 financial crash. By comparison, the much smaller Savings and Loan crisis of the 1980s resulted in over thirty thousand criminal referrals and one thousand felony convictions by the Department of Justice. In contrast, only one banker—the Egyptian-born Kareem Serageldin—was ever sent to jail for the 2008 financial crisis. Despite that even the judge admitted that others at Credit Suisse were guiltier and that Serageldin was merely “a small piece of an overall evil climate within the bank and with many other banks,” he nevertheless sentenced him to thirty months behind bars. The overall lack of prosecutions related to the worst banking crisis in American history reflected a disturbing trend. From 1995–1997, the percentage of federal white-collar prosecutions was 17.6 percent. In the period from 2010–2012 however, this figure dipped to only 9.4 percent. As multiple sources within the banking industry told the New York Times, federal authorities appeared to lack the courage to go after powerful corporate figures, part of an overall change within the Justice Department of seeking settlements in lieu of prison sentences.
CEOs are not only given wildly excessive salaries and “performance” bonuses; they are often given parting “gifts” that boggle the mind. ConocoPhillips CEO James Mulva, for example, was gifted an unbelievable $260 million from the company when he left them in June 2012. Evidently the $141 million total compensation package he’d accrued in 2011 wasn’t enough. Mulva’s package paled in comparison to the more than $417 million doled out to John Welch, in honor of his twenty-year tenure at General Electric. But perhaps Welch was deserving of such an honor, considering General Electric paid no taxes at all in 2010, according to the New York Times and numerous other mainstream media outlets. In 2015, Citizens for Tax Justice claimed that GE had again paid no taxes, along with fourteen other Fortune 500 companies. These lucrative deals, often called golden parachutes, are extended to overpaid executives even when they fail miserably at their jobs. The magazine Mother Jones calculated that the average golden parachute for these CEOs was an amount equal to forty-nine lifetimes’ worth of work for a median income employee. In the case of Welch, this would rise to 203 lifetimes’ worth of work.
Some executive pay rates are so astronomical that they defy belief. John Hammergren, CEO of drug giant McKesson, made $54.4 million in 2010. This works out to $210,000 a day, and that daily salary would be more than nearly 99 percent of Americans make annually ($250,000 a year is generally considered the basement level for the top One Percent). Health Care pays its executives extremely well, too, which goes a long way toward explaining the spiraling, out of control medical costs in this country. Anthem Blue Cross and Blue Shield paid CEO Larry Glasscock a $42.5 million bonus in 2004, which nicely dwarfed his $3.6 million compensation for the year. As an anonymous wit on a conspiracy forum noted in outrage over this, “At my former salary, I would have to work 1,214 years to make $42.5 million. That’s over twelve centuries.” To show just how rapidly, and drastically, the gap between upper management and workers is growing, during the 1980s, executives made about forty times what average workers did. By 2015, the ratio of CEO to worker pay was 204 to 1. During the Clinton years, the average pay for CEOs increased more than 400 percent.
While paying no tax at all in 2010, GE, citing merely one example of corporate tax “fairness,” paid an average of just one-eighth of a percent in taxes between 2002 and 2011. In response to these astonishing statistics, GE CEO Jeff Immelt termed the US tax system, “old, complex, and uncompetitive.” Uncompetitive with what, one wonders. Immelt exemplifies everything wrong about present-day America; since he took over as GE’s CEO, the company’s stock lost 50 percent of its value, and GE had closed thirty-one factories and laid off nineteen thousand workers. For this dazzling performance, Immelt earned over $12 million a year. Forbes magazine ranked Immelt as the fourth worst CEO in America in its May 2012 issue. Perhaps Immelt possesses that indistinguishable executive talent we’ve heard so much about.
One could fill a good-sized book with the excesses of CEO compensation alone. The figures are mind-boggling. Angelo Mozilo was the cofounder and longtime CEO of Countrywide Financial. During one eight-year period alone, Mozilo earned $521.5 million from his company, according to compensation research firm Equilar. Mozilo became the first executive to be penalized for the losses incurred by millions of investors during the mortgage collapse when he agreed to settle with the Securities and Exchange Commission in a civil fraud case. Of the $67.5 million Mozilo was assessed, Countrywide agreed to pay $20 million as part of the indemnification agreement he had with the company. Mozilo, like many of the highest-paid corporate leaders, received innumerable, valuable perks along with his millions. For instance, his compensation package covered annual country club and golf course dues. Mozilo knew how to take care of his influential friends, too; Senator Christopher Dodd, for example, was given a $75,000 reduction in mortgage payments at below-market interest rates, that in real terms worked out to be a sweetheart deal worth over a million dollars. Other luminaries who benefited financially from being “friends of Angelo” included members of Congress Kent Conrad and Barbara Boxer, as well as Nancy Pelosi’s son, Fannie Mae CEO Jim Johnson, and Democratic Party figures Richard Holbrooke and Donna Shalala.
The unfathomable salaries CEOs regularly give themselves are, for all intents and purposes, tax subsidies from the government. Congress, in 1993, capped the tax deductibility for executive pay at $1 million but still allowed US corporations to profit from deducting so-called performance-based pay, including stock options. Thanks to this provision, corporations regularly use these stock options to lower their taxes, making large executive bonuses in effect tax free. The total yearly cost to taxpayers from all these shenanigans is some $7 billion, according to the Economic Policy Institute. The fast-food industry has been especially noteworthy in this regard; the Institute for Policy Studies found that fast-food CEOs had deducted about $183 million of this performance pay, which decreased their tax liability by $64 million over two years. These are the same folks who are claiming no one will be able to afford their putrid food if they were forced to pay their employees a living wage. McDonald’s CEO James Skinner, for example, received a performance bonus of $23 million in 2012, while David Novak, CEO of Yum! Brands (which includes Taco Bell and KFC), was given more than twice that amount, with a $48 million “performance” bonus.
While these CEOs are earning unconscionable amounts of money, their workers are often forced to make ends meet on $20,000 annually or less, with decreasing benefits every year. Walmart has become notorious in this regard; their employees are even given instructions on how to apply for welfare and food stamps during their orientation. The fact that some of these companies are paying their workers so little that they qualify for government subsidies seems to have largely escaped the attention of the public, who have been trained to focus their anger on the poorest individuals, benefiting from some nominal form of government assistance. In the minds of many Americans, it’s fraud for a decidedly poor person to be on government assistance and still have what appears to be too good of an automobile or television for someone of their lowly lot in life, but it’s okay for huge corporations to be given unlimited handouts from taxpayers to subsidize the shameful pittances they pay their employees.
During the 2013 holiday season, Walmart launched a canned-food drive for its own employees. Somehow, I don’t expect Sam Walton’s children to reexamine their priorities, despite all the attention and criticism this campaign received. No less ironic was the incredible boast from Walmart’s CEO Bill Simon, the month before, during a presentation about the opportunities at his corporation, that 475,000 Walmart associates earned salaries of at least $25,000. There are about a million Walmart employees, so this means that less than half of them are paid even this kind of paltry salary. The Committee for Better Banks surveyed bank tellers in New York and found that 39 percent of them were on some form of public assistance, because their salaries were so low. By the end of 2012, the top ten CEOs each were making over $100 million a year. Facebook CEO Mark Zuckerberg led the way, with $2.28 billion. Almost all of Zuckerberg’s earnings came through stock options, which meant a very low tax bill.
The results of a study published in the New York Times on July 22, 2013, confirmed that whether you’re born poor or born rich you tend overwhelmingly to stay that way. Nationally, a Pew poll found that 43 percent of Americans born in the bottom fifth of the economic ladder never move up at all, while 70 percent never reach the middle rung. Even students from wealthy families with lower test scores are more likely to graduate from college than poor students with higher test scores. So few people control the marketplace that, according to the Institute for Policy Studies, the top One Percent own half of all the stocks in this country, while the bottom 50 percent own only .5 percent of them. Sociologist and author G. William Domhoff revealed, in an illuminating report on his Who Rules America? website, that the One Percent has only 5 percent of the collective personal debt, while the bottom 90 percent has 73 percent. When we contrast the distribution of income and debt, it becomes obvious just how difficult economic upper mobility is in present-day America. Joseph Stiglitz went over much of this material in an excellent article in the May 2011 Vanity Fair, titled “Of the 1%, by the 1%, for the 1%.” There is probably no truer saying than the chestnut, “The rich get richer and the poor get poorer.”
As Ambrose Bierce once defined it, a corporation is an ingenious device whereby individual profit is obtained without individual responsibility. Those who suggest that top executives are indispensible and crucial to the success of the company should try a simple experiment; allow a week to go by without any executives reporting to work (or even telecommuting, one of their countless perks). Then go a week without the janitorial staff. It will be crystal clear to everyone just who is doing the important work.