Wall
Street Is Suddenly Woke And It's A Joke
Why all
the hand wringing about the economy? If what I read this week in the Wall Street Journal is correct, anyone
with a 401K, IRA, or other market-tied investment will most certainly take it
in the shorts in the coming years no matter what happens between President
Trump and China. Corporate political activism will sink us all.
Some of
America’s biggest CEOs gathered this week for an event known as the “Business
Roundtable.” WSJ’s David Benoit reported on
the event and the new language nearly unanimously endorsed from the group was
stunning.
Specifically, a discussion surrounding the language of their
mission statement: “What is the purpose of a corporation?” As Benoit wrote, the
standard has always been economist Milton Friedman’s classic theory. A
company’s only obligation is to maximize value for shareholders.
But in the toxic, rhetorical stew of modern politics, that
won’t fly.
A total of 181 of the 188-roundtable members endorsed a new
idea that their company decision-making based solely on yielding higher profits
is a thing of the past. Now, “all stakeholders – that is, employees, customers
and society writ large” will be considered, wrote Benoit.
Yep, you read that right. Corporate bigwigs signed on to the
notion “society” should be a deciding factor in their operational
decision-making. As if that’s defined by anything other than what some
politically active CEO determines it to mean in the midst of whatever social
“crises” Twitter dictates we’re in at any given moment.
Imagine
you have a bunch of money tied up in a company and their #MeToo vegan
non-binary CEO decides massive operational costs must increase to save the
Maltese walrus finch. Your returns and the company stock may sink, but you’ve
done a “good thing” says the CEO, so smile and suck it up, Mr. Monopoly
investor man.
While this isn’t a binding legal agreement, it is an
operational objective these companies agreed to follow. As I read it, CEOs will
become activist strongmen who can extend their middle finger to shareholders if
they deem a decision they made is in the best interests of “society.”
We’ve already seen how this plays out. One of the most recent
examples is Starbucks' former CEO Howard Schultz. For years we watched that
hazelnut move away from the business of selling coffee in favor of social
causes. I'm proud to say I ridiculed every single one of them on my show over
the years. Every single one of them crashed and burned.
When the economy tanked in the mid-2000s, Schultz came up with the idea of
selling bracelets at each Starbucks counter for $5. They were even red, white
and blue! The idea was to do your patriotic duty, buy a bracelet and with the
bracelet profits they’d lend that money to businesses who promised to create
jobs with it Think of that: a businessperson who has no understanding of why or
how jobs are created.
Know anybody with one of those bracelet stimulus jobs today?
During the era of racially charged riots in places like
Ferguson, Missouri and Baltimore, Maryland - Schultz sprang into
action once again. This time, he thought it a good idea to turn
his minimum wage baristas into social justice counselors by encouraging them to
talk about race with their customers.
The initiative was called “Race Together.” Employees were
encouraged to write “race together “ on their customers’ cups with the idea of
engaging them in a discussion about race relations. They even published a list
of “conversation starters” to aid the baristas and customers. “Could I get a
black coffee with my white privilege, please?”
Within days employees had become so uncomfortable and
customers so annoyed, Schultz had to cede another defeat in
an internal email to employees. "While
there has been criticism of the initiative — and I know this hasn't been easy
for any of you — let me assure you that we didn’t expect universal praise," he wrote.
In 2018, undeterred by previous
disasters Schultz made a pathetic attempt to ingratiate himself to the lunatic
fringe of the nation after a Philadelphia
Starbucks employee refused
to turn over a restroom key to two men who’d been loitering in the store for
some time but never purchased an item.
Key to the story was the race of the
customers, of course. The store manager called Philadelphia police. Police
removed the men. A national screaming match erupted over, in essence, loitering
in a business without buying anything...while black.
How did
it conclude? With Schultz closing all of his stores to train employees on getting their minds
right about race.
Schultz had to show the left-wing mob
on social media and in the press that he was willing to scold his entire
company to make sure this “terrible mistake” in Philadelphia was an isolated
incident.
Once the employees went through their “get your mind right”
classes (led by Obama’s former Attorney General Eric Holder who pocketed
serious shake-down money in the process), Schultz offered up his final
masterpiece. An edict. All stores must allow anyone entry at any
time and they are allowed to stay as long as they want without buying anything.
Further, if they’d like to use the bathroom in the store, their throne is your
throne.
Schultz left his post as CEO not long
after this final magnum opus of leadership. But
in his social engineering wake he left Starbucks stores all over the country to
figure out what to do with homeless, drug addicts, and mentally ill people
who’ve turned their once proud coffee shops into halfway houses. That’s Schultz’
legacy.
Starbucks should be a cautionary tale
to the members of the “Business Roundtable.” Instead, they signaled this week
they’d like to embolden their CEOs to have the autonomy to behave more like
Schultz. Shun their business model for political showboating masked as
social conscience.
Well investors, I’d encourage you to check if you have money
tied up in any of the 181 companies who agreed to this madness going forward.
As for me, I’m a proud Dunkin’ customer. I’m also considering a listen to
that Knott’s Landing guy on the commercials and buy gold. It can’t be any
more risky than where Wall Street seems to be headed.
ALL CORPORATIONS AND ALL BILLIONAIRES WANT WIDER OPEN BORDERS,
FIGHT AGAINST E-VERIFY AND DEMAND AMNESTY TO KEEP WAGES DEPRESSED!
"Since 2009, global dividend payouts have increased by approximately 95 percent, almost doubling in value. The same period has seen an escalating assault on the conditions of the working class, epitomized by the growth of two-tier wage systems among autoworkers in the United States, the uberization of vast sections of the working class via the proliferation of casual and temporary jobs, and the growth of corporations like Amazon, whose profits are based upon the ever-more precise use of automation to increase the conditions of exploitation of their workforce."
Record global dividend payouts fuel rising social inequality
A new report published
this week by the financial advisory firm Janus Hendersons shows that
the world’s largest corporations
will hand out $1.43
trillion in dividend payments to their shareholders in 2019, setting
a new record.
Ten years after the
global financial crisis began in 2008, wages continue to stagnate, poverty is
rising, and workers everywhere are lyingly told that there is no money for such
elementary social needs as healthcare, education and pensions. At the same
time, the class of corporate executives and billionaire shareholders continues
to rake in incredible sums of money.
According to the
report, which is based on data calculated for the world’s 1,200 largest
companies, total dividend payments surpassed half a trillion US dollars in the
second quarter of this year, reaching $513 billion. To place this number in
context, the amount handed out directly to shareholders in 2019 will be more
than the annual economic output of Spain, a country of 47 million people. In
just three months, the 20 largest companies alone paid $87.9 billion in
dividends, roughly twice the total economic output of Tunisia (population 11.5
million) for an entire year.
Dividends are payments
made by companies to their shareholders on a quarterly or annual basis, with
every share entitling its owner to receive an amount determined by the
company’s board. The money for these payments does not arise out of thin air.
It is extracted from the collective labour of the working class. Its source, as
Karl Marx discovered more than 150 years ago, is the surplus arising from the
difference in value between what the workers are paid in wages and what they
produce in the course of their work.
The figures contained
in the report demonstrate how the share market serves as a mechanism for the
transfer of wealth up the income scale from the working class to the wealthiest
sections of society. The overwhelming majority of shares of all these
corporations are dominated by a relative handful of investment firms and hedge
funds which are controlled by a tiny layer of billionaire and multi-millionaire
shareholders.
One hundred years ago,
the Russian Marxist revolutionary Vladimir Lenin, analyzing the development of
imperialism at the turn of the 20th century, noted that an essential feature of
this period of capitalist decay was an “extraordinary growth of a class, or
rather, a stratum of rentiers, i.e., people who live by ‘clipping coupons,’ who
take no part in any enterprise whatever, whose profession is idleness.” Today,
the processes then analyzed by Lenin have developed to a far greater level of
maturity.
The growth of dividend
payments is just one expression of how corporate profits are being used,
not to re-invest into productive capital, but for essentially parasitic
financial activities to directly enrich the corporate and financial elite.
The financial
investment firm Moody’s reported last June that stock buybacks in 2018 by the
S&P 500 companies (500 US-based companies that comprise around 80 percent
of the US market) had doubled from the previous year to reach $467 billion in
the year to March 2019. Stock buybacks occur when companies purchase their own
stock in order to artificially inflate their own share price. Their sole
purpose is to increase the wealth of shareholders by raising the price of the
shares that they own.
BLOG: TRUMP'S BANKSTER
REGIME IS AS INFESTED WITH GOLDMAN SACHS PEOPLE AS OBAMA'S WAS JPMORGAN
Goldman Sachs data
published at the end of July shows that in the 12 months ending March 31, the
same S&P 500 spent 103.8 percent of their free cash flow on dividend
payouts and stock buybacks. In other words, they spent more than their income
in direct handouts to investors over the same period. This is the first time
that this has taken place since the period of 2006–2008, in the immediate
lead-up to the 2008 financial crash produced by the criminal speculative
activities of the corporate and financial elite. In the period since, these
activities have not only continued, they have intensified.
The policies of
governments around the world are oriented toward the artificial inflation of
the share market, with central banks in the United States, Europe and Japan
taking on unprecedented levels of debt to maintain the flow of ultra-cheap
credit to fuel financial speculation. Prior to 2008, the balance sheet of the
European Central bank stood at approximately 1 trillion euros, or ten percent
of the economic output of the euro zone. This has since more than quadrupled to
4.7 trillion euros, or 40 percent of output.
The report refutes the
lying claims by the same governments that workers must accept the slashing of
social programs and conditions because there is simply no money to fund them.
For example, dividend payments by French corporations in the second quarter of
2019 reached $51 billion, the highest amount ever. The same week as the
report’s release, the French media has been filled with accounts of the “busy
week” of President Emmanuel Macron following his return from summer holidays,
and the demand that he make progress on his government’s agenda of slashing
pensions and completing education reforms to cut spending. But the dividend
payouts of the largest French corporations in 2019 alone would cover two thirds
of the entire spending on pensions for the year.
Since 2009, global
dividend payouts have increased by approximately 95 percent, almost doubling in
value. The same period has seen an escalating assault on the conditions of the
working class, epitomized by the growth of two-tier wage systems among
autoworkers in the United States, the uberization of vast sections of the
working class via the proliferation of casual and temporary jobs, and the
growth of corporations like Amazon, whose profits are based upon the ever-more
precise use of automation to increase the conditions of exploitation of their
workforces.
The two processes are,
fact, directly connected. The increased exploitation of the working class is
the necessary basis for the funnelling of profits into the hands of the
super-rich.
For example, Ford Motor
Company’s announcement of the layoff of 12,000 workers across Europe at the end
of June of this year was greeted with rapture on share markets. Share prices
immediately rose by three percent, as the financial investors anticipated that
the increased exploitation of the remaining workforce would free up cash for
higher dividend payouts and stock buybacks.
This process, however,
has depended upon one essential condition: the continued suppression of the
class struggle and resistance by workers, which for decades has been carried
out by the trade unions, the bought-and-paid-for allies of the companies and
governments in every country. Internationally, however, the grip of these
pro-corporate tools is breaking up as workers are entering into struggle
against intolerable conditions of social inequality and the assault on their
jobs and living standards.
The year 2019 has
witnessed an upsurge of working-class struggle, from the “yellow vest” protests
in France, to teachers’ strikes in the US, to the mass protests in Puerto Rico,
Algeria and Sudan, to the growing opposition among US autoworkers to the
conspiracy of the automakers and the bribed United Auto Workers union to impose
further concessions.
These struggles will
continue to escalate. But the precondition for their success is for workers to
understand that they face not just one company, union or government, but the
entire capitalist system, which depends upon the immizeration of the working
class for the enrichment of the elite. The alternative is socialism—the
expropriation of the ill-gotten gains of the financial oligarchy and the
transformation of the gigantic corporations into public utilities, controlled
democratically by the working class, and organized to meet social need.
AMERICA'S
CRIMINAL BANKSTERS LOOTED MORE THAN A TRILLION DOLLARS OF AMERICA'S REAL ESTATE
WITH THEIR TOXIC MORTGAGES AND WERE REWARDED WITH NO-STRINGS BAILOUTS AND NO
(REAL) REGULATION.... THEY'RE STILL LOOTING AMERICA!
"It would inevitably be met with massive and
overwhelming
opposition on the part of the financial oligarchy,
which
controls all levers of the state power, and has at
its disposal
not only the courts and politicians, but, even
more decisively,
the police and the army."
Socialism and the problem of the
super-rich
28 December 2017
Nearly one hundred and fifty years ago,
Karl Marx, citing the early 19th century French economist Jean Charles Léonard
de Sismondi, observed that “the Roman proletariat lived at the expense of
society, while modern society lives at the expense of the proletariat.”
Never has this been so true as today, as
day after day, week after week, reports are published showing the massive
social wealth piled up by the financial oligarchy at the expense of the working
class.
The latest of these is the Bloomberg
Billionaires
Index published on Friday, which showed
that the
fortunes of the world’s wealthiest 500
billionaires
rose 23 percent over the past year,
making them $1
trillion richer than at the end of 2016.
The combined
wealth of this group reached $5.3
trillion. The gain
of $1 trillion was four times last
year’s increase.
Bloomberg found that the world’s richest
500 people as a group added an average of $2.7 billion to their fortunes every
day in 2017. This
means that, on average, each of these individuals added $5,400,000 every day,
or $225,000 every hour—roughly equivalent to the combined income of five
working-class households in the US over the course of a year.
The rapid expansion of the wealth of the
financial oligarchy accompanies growing indicators of social misery at the
other pole of society, exemplified in the report this month by the Centers for
Disease Control that life expectancy in the US fell for the second year in a
row.
Wealth concentration on the scale
reflected in these reports has immense social implications. It is impossible to
seriously address a single social issue without confronting the problem of
economic inequality. The colossal diversion of resources into private wealth
accumulation by the financial oligarchy effectively starves society of the
resources it needs to deal with the most basic problems.
The United Nations estimates that it
would cost $30 billion a year to eradicate world hunger, a small fraction of
the wealth monopolized by the world’s billionaires. Amazon founder Jeff Bezos
alone added $34.2 billion to his fortune in 2017.
America’s 159 billionaires added $315
billion to their fortunes last year, giving them a collective net worth of $2
trillion. This is double the $1 trillion spent by the US government in 2015 on
health care ($980 billion), education ($70 billion) and housing ($63 billion)
combined.
The funneling of these vast sums into the
bank accounts of the super-rich, combined with the nearly $1 trillion set aside
every year to fund the military machine that protects the oligarchy’s financial
interests around the world, leaves virtually nothing to address the crumbling
social and physical infrastructure (roads, bridges, rail, mass transit) of the
United States.
The tax bill just passed by the Trump
administration will fuel a further growth of social inequality in the US and
around the world beyond what are already the highest levels since the Gilded
Age at the turn of the 20th century.
The economic life of the planet is
determined by the drive of the ruling elite for ever greater self-enrichment.
The policies of all capitalist governments and parties, whether right-wing or
nominally “left,” are driven by this requirement. The unprecedented rise in the
stock market has been engineered by the world’s central banks, led by the US
Federal Reserve, to enable the capitalist class to recoup its losses and
increase its share of wealth and income in the aftermath of the 2008 financial
crisis. The Fed, first
under Bush and then under Obama, led the way in organizing bank bailouts and
the infusion of trillions into the financial markets by means of ultra-low
interest rates and “quantitative easing” money-printing operations.
To provide a certain context, the total of
$5.3 trillion in assets controlled by the richest 500 people is greater than
the combined GDPs of the UK and France. The $2 trillion owned by US
billionaires is almost twice the GDP of Mexico, a country of 128 million
people. It is also more than double the combined GDPs of Argentina, Chile and
Peru.
Bezos’ gain for the year is itself only
slightly less than the combined GDPs of Jamaica ($14 billion), Niger ($7.5
billion) and Zimbabwe ($16 billion), with a combined population of 40 million.
The financial elite has definite social
interests, which it enforces through the wholesale buying of political parties
and politicians, making democracy under capitalism nothing but a hollow shell.
What would happen in response to any
serious effort to reform this state of affairs, to pursue a modest reallocation
of social resources, within the framework of the capitalist system, to ensure
that all people received the basic rudiments of nutrition, health care, and
education?
It would inevitably be met with massive
and overwhelming opposition on the part of the financial oligarchy, which
controls all levers of the state power, and has at its disposal not only the
courts and politicians, but, even more decisively, the police and the army.
When social reform is impossible, social
revolution becomes inevitable. There is no way to avoid the conclusion that it
is necessary to expropriate the wealth of the financial oligarchy.
These resources are derived from the
social labor of the working class, which produces all the wealth of society.
The working class is the only social force that can and must carry out this
historic task. The only answer to the growth of poverty and immiseration for
the masses alongside ever more obscene levels of wealth for a tiny minority is
socialism, based on common ownership and democratic control of the productive
forces and the rational, planned international coordination of economic life.
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