War on Greed

Greed
by Cliff Schecter

"Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit." So said fictional character Gordon Gekko, the embodiment of a 1980s corporate raider in the movie Wall Street.

Yet, sadly, just as the Gekko character was based on real men and the greed speech on an actual address, today we also see real live Gekkoesque creatures of venality known as equity fund managers. For these self-appointed demi-Gods who lord over Wall Street, no amount of compensation is too much and no amount of compassion too small. Furthermore, it is this very ruinous rapacity that is playing an important role in damaging our economy, assaulting the standard of living of middle class Americans and raising economic disparity to levels unseen since The Gilded Age.

In general, while policy and our cultural ethic dictated that in the 1950s and 1960s, CEOs didn't make exorbitant salaries while the wages and benefits of their workers stagnated, the Right has led an assault on both since the 1970s, which has been a startling "success." According to Paul Krugman, in an article entitled The Great Wealth Transfer:

The reason most Americans think the economy is fair to poor is simple: For most Americans, it really is fair to poor. Wages have failed to keep up with rising prices. Even in 2005, a year in which the economy grew quite fast, the income of most non-elderly families lagged behind inflation. The number of Americans in poverty has risen even in the face of an official economic recovery, as has the number of Americans without health insurance. Most Americans are little, if any, better off than they were last year and definitely worse off than they were in 2000.

But how is this possible? The economic pie is getting bigger -- how can it be true that most Americans are getting smaller slices? The answer, of course, is that a few people are getting much, much bigger slices. Although wages have stagnated since Bush took office, corporate profits have doubled. The gap between the nation's CEOs and average workers is now ten times greater than it was a generation ago. And while Bush's tax cuts shaved only a few hundred dollars off the tax bills of most Americans, they saved the richest one percent more than $44,000 on average. In fact, once all of Bush's tax cuts take effect, it is estimated that those with incomes of more than $200,000 a year -- the richest five percent of the population -- will pocket almost half of the money. Those who make less than $75,000 a year -- eighty percent of America -- will receive barely a quarter of the cuts. In the Bush era, economic inequality is on the rise.

Rising inequality isn't new. The gap between rich and poor started growing before Ronald Reagan took office, and it continued to widen through the Clinton years. But what is happening under Bush is something entirely unprecedented: For the first time in our history, so much growth is being siphoned off to a small, wealthy minority that most Americans are failing to gain ground even during a time of economic growth -- and they know it.

Here is another example of what Krugman is talking about:

Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution — currently, the almost 15,000 families with incomes of $9.5 million or more a year, according to an analysis of tax returns by the economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics. Such concentration at the very top occurred in 1915 and 1916, as the Gilded Age was ending, and again briefly in the late 1920s, before the stock market crash. Now it is back, and Mr. Weill [Sandy Weill, of Citigroup] is prominent among the new titans. His net worth exceeds $1 billion, not counting the $500 million he says he has already given away, in the open-handed style of Andrew Carnegie and the other great philanthropists of the earlier age.

One of the largest culprits in this economic sea change are the latter day financial predators known as private equity firms. They borrow money from banks to take over companies--often companies in distress. These leveraged buyouts are great for their bottom line, as the head honchos at these firms receive compensatory stock options, management fees, tax writeoffs, etc., that reach the multi-millions and sometimes even billions. But this gratuitous wealth is often accomplished by slashing jobs and benefits of workers who don't have access to the corporate jet or "company housing." In fact, here is an example of how this market dynamic often plays out, to the chagrin of everyone not sitting in a corporate boardroom or owning large caches of the stock:

Employees knew that Hastings Manufacturing Co., a family-owned auto-parts supplier 30miles south of Grand Rapids, Mich., was in deep water. Facing financial pressure, 375 employees--two-thirds of whom were in the United Auto Workers' (UAW) bargaining unit-conceded $1 million in benefits to save their company, relinquishing newly negotiated pay raises and agreeing to cover part of their own health care costs. But according to UAW Local 138 Chief Steward Kim Townsend, who testified before the House Commercial and Administrative Law subcommittee in September, when Hastings' management declared bankruptcy and was taken over by the private equity firm Anderson Group in December 2005, the slicing didn't stop there. Sick days were cut in half, an existing two-tier wage system with a top rate of $13.49 an hour was maintained and the allotment for bargaining time was limited to two hours a month on company time. For retirees, the consequences were more dire, with pensions and health care coverage all but severed.

To market analysts, Hastings appears more profitable today. But its value stems not from innovation but from breaking obligations to the company's employees and retirees. "We make the same products," Townsend said at the hearing, "in the same building, with the same equipment, for the same customers as we did before the asset sale."

And as if the plethora of these kind of stories are not bad enough, a tax loophole, one that both Democrats and Republicans alike appear loathe to do anything about, allows these fund managers to declare their compensation as capital gains. This means their income is taxed at the 15% capital gains rate instead of the 35% rate appropriate for this kind of obsene economic gain. Yes, ladies and gentlemen, you're paying more in taxes than a hedge fund manager who made a cool billion last year. Big name firms such as Cerberus Capital Management, The Carlysle Group, The Blackstone Group and Kohlberg, Kravis, Roberts (KKR) take advantage of this loophole with stunning success.

How's that for fair?

So what are the economic consequences of this kind of behavior for our nation? Well, it's that we start to resemble the very Developing World dictatorships we often sanctimoniously decry in the press. Here is a nice helping of this hypocrisy for you:

According to Executive Excess 2007, a study released in August by the Institute for Policy Studies and United for a Fair Economy, the 20 highest-paid fund managers made an average of $657.5 million last year--22,255 times the average annual U.S. salary of $29,500.

This is not only an immoral way to treat the middle class and working Americans on whose backs this country's economy has been erected. It also provides an atmosphere ripe for the kind of Abramoffian political corruption to which we have all become accustomed over the past seven years. Furthermore, this increasing subjugation of everone except those at the very top of the income ladder is dangerous for a democracy, as any historian can tell you.

Which reminds me. Gordon Gekko had another piece of sage advice in the movie Wall Street. At one point in the film he turns to his new protege, stock broker Bud Fox, and offers this prescient observation with practiced nonchalance, "now you're not naïve enough to think that we're living in a democracy, are you, Buddy? It's the free market, and you're part of it."

Yes, indeed we are.

Where are the revolutionaries?

Where are the revolutionaries?
Where is that movement that happens with every generation?

Where is the fire?

Vapid and apathetic Emo scream.

Is this the best you can do?

As your future and rights melt away before your dark eyeliner eyes.

What has happened to this generation?

Why are they so quite?

As things become worse, don’t they know about the 60’s?

They stare and drool into their MTV mastabatory lives.

Buying and buying, taking and taking spending and spending.

Becoming the flock
That has no history.

They sit back and wine and nod their pretty pho hawk heads.

And reply with a straight face and a vapid stare.

“Well, What am I supposed to do?”

As we all sit back and watch it burn to fuckin ground.

Mr. Mrs. Everyday

Where did the rosy suburban dreams of cul-de-sac nightmares go?

As one by one every home is taken by the banks.

Broken dreams living in a plastic world;
Thinking like sheep;

Trying to buy into it all,
Being kicked out on your ass

Don’t look back.

Don’t you cry!
Don’t you dare cry.

As the walls come tumbling down;

As the bricks, the mortar, the glass, the paint the fuckin dirt all look back at you.

And scream until you shatter.

What now Mr. and Mrs. everyday for the everything?

End The war

Photo By: Kris Berrios

Into You

Everyday I walk past myself
Falling from lost leaves that scatter
Scatter across my soul

A forgotten match that strikes forth to you

Sudden to a sweet red kiss
Thrashing through the doves

Bound by sheets through sheer in and out of wet time

And earning that last deep and deadly kiss

Escaping into you

Backwards American

I’m a backwards American
What does it mean when those who shun the desolate meaning of torture
Look away brushing the lint off their dark blue suites
I’m a backwards American
Living within a glory that has no sun
A fading light that falls across the eyes of children
A fading light that falls with every solider falling onto the hot red earth
Hot red earth

Looking for that day
Our daily bread
Washing away the hate and the lies
Open your mouths and take the wafer
Washing it down
Washing it down
With bile

I’m a backwards American
Watching everyday
As behind closed doors
Behind red oak doors

Words with a smile
A dark black smile

As the crow flies over our heads

As the winds blow through our hair

As a baby is born

As we die

As we make love

As we drink from the cup

As we end

Not understanding why

Fascism is a feeling

Don’t stick to the arid dreams of decay
Thinking about your nostradamus nightmare lie
Who become the factors of our own demise?
Setting fourth a reality all to common to the bible,
How then walking up and down skidrow
How then walking through the streets of New Orleans
White trailer city under the thoughts of the forgotten
In a refuse society of the have knot’s
Fascism is a feeling
It’s like a virus
It pours into your rectum
Spreading out like fingers through your insides
It devours your sense of reason
The unknowable
You just start to believe.
Your function as a body
As a heart
As a brain
Soon starts to blacken and decay
So when the battle cries sound
You come around and lend the shell of what you once were
Over to what you have become
And then when you sit
Across from concentration camp 1,2 and 3
You lean up against a wall
And cry for the now
And for the should haves