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Fast-Food Strikes: The latest iteration of class war

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Last week fast-food workers walked off the job in over a hundred cities across the country to demonstrate against exploitation and wage slavery in fast-food corporations. Thousands of participants organised to demand a $15 an hour living wage. The tide of indignation is rising. From Walmart to Caterpillar, from Macy’s to the top six fast-food chains public outrage over naked worker exploitation is mounting. Inequality in the United States has reached fever pitch.

I’ve collated data from a series of articles and public policy reports published over the last several months to paint a picture of a nation haunted by the spectre of a growing class divide.

According to the Social Security Administration nearly 40 percent of all workers in the country made less than $20,000 last year. This doesn’t include figures on benefits such as health insurance or pensions. That’s below the federal poverty threshold for a family of four and close to the line for a family of three. On average, these workers earned just $17,459.55.

The New York Times reported on The Economic Policy Institutes findings that the bottom 20 percent of American workers by income — 28 million workers — earn less than $9.89 an hour; “That translates to $20,570 a year for a full-time employee”. Between 2006 and 2012 these workers saw their income fall by 5 percent. The report also found that wages for workers at the 50th percentile — their median pay is $16.30 an hour — have also dipped, falling 3.4 percent, while pay for the top 10 percent rose 3 percent.

A glaring disconnect between the nation’s top corporate executives and their wage earning employees couldn’t be starker. While workers wages have flatlined, executive pay jumped 16 percent last year alone. Citing Equilar, an executive compensation analysis firm, The Times reported that top executives were raking in, on average, $15.1 Million.

The pay gap between CEOs and their employees working in Fast-Food is particularly staggering. Speaking on Democracy Now, Sarah Anderson, author of the new report “Fast Food CEOs Rake in Taxpayer-Subsidised Pay“, gives an inside peak into how the top six fast-food corporations are taking advantage of a perverse tax loophole, one that rewards fast-food CEOs for underpaying employees. The way this “loophole” works is that it allows companies to deduct unlimited amounts from their corporate income taxes to pay their executives. The stipulation that makes this a loophole rather than broad day light robbery is that the deductions only apply to performance pay – things like stock-options, and related bonuses that come out of the cauldron of financial wizardry. Through this corporate handout fast-food executives are able to obfuscate the real costs of production.

Anderson’s study reveals that over the past two years, the CEOs of the top six publicly held fast food chains – YUM Brands (KFC, Taco Bell, Pizza Hut), McDonalds, Wendy’s, Burger King, Dunkin Brands and Dominos – “pocketed more than $183 million in fully deductible ‘performance pay,’ lowering their companies’ IRS bills by an estimated $64 million.”

In syllogistic form it looks something like this: If companies pay their executives more, then they pay less in federal taxes. Companies pay their executives butt-loads more. Therefore tax-payers get reamed. Mind your P’s and Q’s!

Not only is this low-ball business model denying fast-food employees a living wage and affronting their dignity by setting their human value so low that affording basics like food, water, clothing and shelter is impossible without government support, a second-job or illicit income, this business model is externalising its labor expenses. One study conducted by University of California Berkeley found that more than half of frontline fast-food workers depend on at least one public assistance program costing tax-payers a whopping $7 billion annually. What it comes down to is that fast-food company profits are being mystified. The real costs of labor, distorted by government handouts fatter than fast-food itself, is hiding the hidden reality of tax-payer-subsidized profits. Regular costs of doing business are being transformed into plain profits that ascend directly to the top. While Wendy, Colonel Sanders, the Burger King and Ronald McDonald stiff their employees and pocket the spoils millions of Americans are paying them to do it.

The coals of antagonism are smoldering. The wages of working people have levelled down below the costs of their subsistence. At the same time executive pay has soared. Last weeks organised protests against mass exploitation didn’t pit industrial workers against a class of industrial elites. The economy of mass consumption swallowed that of mass production. What last weeks’ calls for dignity and fair living wages express, however, is a new iteration of class struggle. America stands divided and unequal. The spectre of class war is present. “We’ll be back”, protesters chanted as they exited a McDonalds in Times Square.

Written by yourinquirerprofoundly

December 9, 2013 at 2:05 pm

HealthCare.gov botched: The real farce is the Affordable Care Act

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Let’s get something clear, regardless of whether or not the Obama Administration get’s HealthCare.gov -the website that’s supposed to serve as the hub for the Affordable Care Act’s online insurance market – to “function smoothly” the insurance portal now associated with Obama’s tarnished creditability is nothing more than a new means of distributing sub-par health insurance plans, that for many newly coerced consumers will cost a lot of money for scanty coverage. Why is it that Aetna’s Chief Executive Mark Bertolini, frustrated that the delayed rollout was impeding customers from purchasing new plans groused on CNBC that “There’s so much wrong, you just don’t know what’s broken until you get a lot more of it fixed.” Bertolini like many other health industry leaders who invested tens of millions in gearing up for the so-called market overhaul stood to reap windfall profits from HealthCare.gov’s launch. That’s largely because they paid billions to underwrite ObamaCare through an armada of industry lobbyists.

Mired in the latest ObamaCare debacle we’d be wiser than amnesiac to remember the real reasons why the Affordable Health Care Act is a complete farce.

Recall who wrote the Affordable Care Act: Advanced Medical Technology Association, American Hospital Association, the Pharmaceutical Research and Manufacturers of America, the president-elect of the American Medical Association, the Chair of SEIU Healthcare of the Service Employees International Union, and America’s Health Insurance Plans – the lobby for insurers like Aetna, Humana, UnitedHealth and WellPoint. Although this list of health care industry associations and lobby groups is not exhaustive it illustrates the major interests that shaped Obama’s “landmark achievement”. Yet these special interests groups don’t represent those who bare the costs of a dysfunctional health care system, that is the patients. On the contrary they represent the financial aspirations of mega health insurance companies, pharmaceutical corporations, and hospitals that have been gouging patients and public health programs for decades helping to make the United States the most expensive, inefficient, dysfunctional and ass-backwards stupid health care system in the developed world. We are talking about a health care system based on a fee for service model that charges patients into bankruptcy and when they can no longer pay for services that cost a fraction in significantly less wealthy nations, discharges them and leaves them to die. We are talking about a system that forces hospitals to waste billions filling out brain-racking paperwork; $350 billion annually by some estimates. We are talking about a system that hovers over the chests of doctors like a foul smelling succubus inducing nightmares of career-blowing malpractice lawsuits. We are talking about a system that rewards drug leviathans by allowing them to systematically fuck public health care programs like Medicare and Medicaid out of billions of dollars by granting them oligopoly status and the leverage to dictate the terms of purchase. Furthermore, in full accordance with the laissez-faire principles that govern the US economy, the state heeds to Big Pharma’s demands to outlaw the importation of competitively priced drugs. It’s as if the entire health care industry has used the legislative process to shove a catheter up the public pee hole to filch profits from the social body.

It seems we’ve forgotten about the heady days when the “Pharmaceutical Research and Manufacturers of America announced that the industry would contribute an estimated $150 million to campaign for Obamacare.” It’s also been erased from collective consciousness that the health care industry put the golden star on Montana Senator Max Baucus’s forehead and donated $2 million plus to his campaign in return for being the industry’s favorite little whore. One man, swiftly guided by his obsequious chief health policy counsel Elizabeth Fowler, who as Glenn Greenwald pointed out three years ago, “was hired by the health insurance giant WellPoint to serve as its Vice President for Public Policy and External Affairs,” would play an extraordinary role in giving the health care industry the gift of a lifetime. Embodying the congealed schemes of his corporate clients Baucus led the Senate Finance Committee in designing the health care overhaul dreamed up by industry leaders. That meant then, as it does today, that the privileges allotted to the parasitic industry that in semantics only is in charge of caring for the sick and injured was granted a stay on the status quo. In it’s “reformed” form the Affordable Care Act would continue to invite the system to suck its green life blood.

Today’s seven page feature story in the New York Times discusses the anxiety of health insurance executives and industry chiefs the HealthCare.gov quagmire has produced. “With the website practically unusable, insurers were panicking; their customers could not log onto HealthCare.gov to buy new plans.” Health insurance executives who had invested heavily in preparing for the implementation of ObamaCare had high expectations of lucrative profits. Following their logic, a logic they were able to have codified into law, insurers would agree to sell insurance to everyone. Here Obama gets to look great for the one material benefit his health care bill would provide, prohibiting the denial of coverage for people with preexisting conditions. The onanistic sentiments that disseminated across the beltway media pretty much veiled the rest of the bull shit that stank behind the closed doors where the legislative architects had their interests carved in stone. The logic continues. So the insurers will agree to insure everyone… as long as the government requires every American to buy that insurance, and uses tax dollars to subsidize those who could not afford to do so. Enter the “individual mandate”, the decree that regardless of what kind of policy you can access whether it be a good and affordable policy, one that actually covers hospital visits, mental health, outpatient services and shit, doctors visits, or a crap ass bare bones policy offered by your stingy employer with the high deductible and minimal service coverages, you have to buy a policy or face (they delayed this part too) a penalty. Essentially the individual mandate stipulates that people will have to buy insurance that has already proven in innumerable cases inadequate to cover patients needs while draining public health resources with outlandish charges. In conclusion the insurers would agree to “sell their undifferentiated commodity to all people, no matter how sick, if the government agreed to require all people, no matter how healthy, to buy their undifferentiated commodity.” So the anxiety triggered by the rollout fumble seems a rational response to insurers concerned that those they paid to rig the system are fucking up.

Another rational response would be to see the botched healthcare rollout for what it is, the rollout of a still defunct healthcare system. Materially reforming health care in the United States, that is actually treating ill and injured patients and charging them for the quality rather than quantity of care received hinged on three things; establishing a single-payer system, providing a public option and reigning in the power and profits of Big Pharma. In a scathing article Matt Taibbi recalls how Obama himself agreed that a single-payer system would be the best means to reform health care.

Everyone knows this, including the president. Last spring, when he met with Rep. Lynn Woolsey, the co-chair of the Congressional Progressive Caucus, Obama openly said so. “He said if he were starting from scratch, he would have a single-payer system,” says Woolsey. “But he thought it wasn’t possible, because it would disrupt the health care industry.Huh? This isn’t a small point: The president and the Democrats decided not to press for the only plan that makes sense for everyone, in order to preserve an industry that is not only cruel and stupid and dysfunctional, but through its rank inefficiency has necessitated the very reforms now being debated. Even though the Democrats enjoy a political monopoly and could have started from a very strong bargaining position, they chose instead to concede at least half the battle before it even began.

So the best plan of reform was fed to the beasts before the games began. Fine. At least a public option might have kept kept insurers just less than pathologically dishonest when setting their premiums. No. That was jettisoned too. Absent the public option the Affordable Care Act was as meaningful a reform as reroofing a house scheduled for demolition. Without it there can be no price floor to anchor the premiums set by plundering health insurance companies. There is simply no way to keep artificial price setters competitive without the presence of a lowest cost operator in the market. (This is economics 101. Any free market espousing McGraw Hill high school ECON book talks about this somewhere in Chapter 1). Having failed to curb the cancerous growth of pharmaceutical companies by allowing bulk purchase bargaining, capping Medicare/Medicaid reimbursements or by permitting the importation of competitively priced drugs, the Obama Administration instead handed major drug corporations the same golden party favor dished out by his predecessor when he passed the 2003 Medicare Prescription Drug, Improvement and Modernization Act (MMA). Only this time the gift basket also included a potential 47 million new clients to the health insurance industry.

Lamenting the bungled HealthCare.gov rollout is like decrying Walmart for putting out food drive baskets for their underpaid employees while accepting their business model as the usual cost of doing business that makes the goods you consume wicked cheap. To not see ObamaCare in all of its aspects whether expediently implemented or botched as anything less than a corporate hijacking of public health is to miss the point entirely. Reform was in theory spearheaded because of inherent inefficiencies in the health care system. This system being comprised of health care providers, drug manufacturers and health insurance companies were, as they are today, rife with malfeasance and largesse. Having not treated the underlying causes of the health care system’s colossal failure corporate domination will continue to put profits before people and live off the blood they rip off patients. Amazingly we’ve been beguiled to think that the success of failure of public health comes down to a smoothly functioning webpage.

Written by yourinquirerprofoundly

December 1, 2013 at 4:15 pm

Elizabeth Warren’s Warning: Chamber of Commerce will make the Supreme Court its subsidiary

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During a speech last week at the American Constitution Society for Law and Policy National Convention, Massachusetts Senator Elizabeth Warren admonished her audience against the Chamber of Commerce’s growing influence on the Supreme Court. “Take a look at the win rate of the Chamber of Commerce,” “According to the Constitution Accountability Center, the chamber moved from a 43 percent win rate during the very conservative Berger court to a 56 percent win rate under the very conservative Rehnquist court. And now they are at a 70 percent win rate under the Roberts court.”

The Chamber of Commerce which fronts as the voice for American small business but operates as the largest anti-business/finance reform lobbying force in Washington has fought every Wall Street reform proposed since the financial collapse of 2008. Laws that would increase the transparency of executive compensation, make financial statements more reliable and accounting fraud more difficult to hide have all been fought by the Chamber’s team of lobbyists and millions of dollars contributed by CEOs from the largest corporations who want to keep their lobbying agenda secret.

In 2012 alone the Chamber of Commerce funneled over $100 million into the election campaigns of politicians who would do their bidding making the Chamber one of the biggest players in the money-access-power nexus that came to light during the 2012 Elections.

Other recent campaigns include the Chamber’s efforts to squash, and today, rollback regulations established under the Sarbanes-Oxley Act, a law passed in 2002 designed to enhance transparency and accounting standards for public company boards and public accounting firms in the wake of the Enron, Tyco and WorldCom scandals. Before his ouster from AIG in 2005, Maurice Greenberg diverted $23 million from the Starr Foundation bankrolling the Chamber in its push against regulations effected by Sarbanes-Oxley. Starr Foundation is one of the largest private foundations in the United States, a non-profit that funds research and education programs in a number of areas, “including education, medicine and healthcare, human needs, public policy, culture and the environment”. The Chamber’s decade-long anti-regulation campaign is really about limiting the control shareholders have over their executives, limiting corporate disclosures to investors, and protecting the secrecy of corporate boardrooms while preventing shareholders and the public from holding the same board rooms accountable.

Then there was the 2009 Chamber funded national ad blitzkrieg attacking the Affordable Health Care Act. The National Journal later revealed how deceitful of the Chamber’s ad campaign was when it reported that major insurers

including Aetna, Cigna, Humana, UnitedHealth Group and WellPoint had funneled between $10 million and $20 million to the U.S. Chamber to fund the campaign. Meanwhile, America’s Health Insurance Plans, the industry trade association, continued to public voice support for reform.

Another memorable 2009 campaign, one that put Elizabeth Warren in the cross hairs was the Chamber’s “Stop the Consumer Financial Protection Agency”. The Consumer Financial Protection Agency was conceived by Warren in a 2007 article she wrote in the Democracy Journal. Her idea was to create and agency that would have the authority and accountability to supervise, examine, and enforce consumer financial protection laws. The Chamber carried out an aggressive ad campaign featuring small business owners complaining that such an agency would crack down on small businesses that offer store credit to customers. Because of laws that do not require 501(c)3s like the Chamber to report donors the banks and credit card companies that financed the multi-million dollar ad and lobbying efforts were never disclosed.

Secrecy and anonymity are the trademark of the Chamber of Commerce. Ruling elites pay the non-profit hundreds of millions a year to secure the lucrative advantages they seek. But the drive for power is ceaseless within the ruling class. Nothing short of total control of all branches of the State will satisfy the appetites of those who wield power behind closed doors. The Chamber of Commerce and the corporations it represents from the shadows have already hijacked the legislative process, elections and government policy. It has already diffused its influence throughout “the least dangerous branch” as the increasing number of rulings favoring Big Business shows. Elizabeth Warren’s warning is prescient. Continuing her speech last week she said, “Follow this pro-business trend to its obvious conclusion and you will end up with a Supreme Court that’s a wholly owned subsidiary of the Chamber of Commerce.”

Written by yourinquirerprofoundly

June 20, 2013 at 10:01 pm