Class Warfare
“There’s
class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich
class, that’s making war, and we’re winning.”
-
In Class Warfare, Guess Which Class Is Winning –
NY Times
By JM Hamilton (8-25-2019)
The Business Roundtable (BR) – a very-much-for-profit entity, consisting of the crème de la crème of America’s CEOs –
came out w/ a public policy statement last week, which stood fifty years of laissez
faire business ideology - and the profits before all ethos - on its head.
Instead – and obviously feeling
the political sand shifting directly under their feet - the CEOs of the BR propose a capitalism that works for all stakeholders w/in American society.
The BR commits to (read hear) among other things:
·
Delivering value to customers;
·
Investing in employees… starting w/ compensating
them fairly (moreover, we foster diversity and inclusion, dignity &
respect);
·
Dealing fairly and ethically w/ our suppliers;
·
Supporting the communities in which we work; and
·
Generating long-term value for shareholders … we
are committed to transparency and effective engagement w/ shareholders.
The irony for any employee who has
worked w/in a Fortune 500 Company surely couldn’t have been lost on
anyone. Employees are constantly told
the importance of (indeed, evaluated based upon): honesty, transparency, delivering excellent
customer service, community philanthropy, and the achievement of departmental
goals. The meeting of said goals, directly
& indirectly, contributes to keeping ownership or shareholders happy.
Failure to meet any of these
expectations is, or can be, often grounds for termination.
Which begs the question, why would the CEOs of the BR feel the need to restate the principles of capitalism… unless of course, the C-Suite brass and the
ownership class don’t play by the very same rules they demand of their employees
and “stakeholders” daily?
That is to say, what has been
business as usual in America – under a profits uber alles regime – for
the last fifty years (?): not delivering value for customers; shafting
employees; dealing w/ suppliers in an unfair and unethical manner; exiting communities, when another city is willing to provide greater subsidies & tax breaks for the new corporate headquarters; and stiff-arming shareholder
requests for business plans & information (say, on how management plans on
dealing with: climate change, or poisons - passing as products - issued forth
by said company)… as well as, busting & closing down shareholder
resolutions requesting greater change & transparency?
Well, in a word, “yes.” If anyone tunes into Bloomberg or
reads business news w/ any degree of frequency, the press is replete w/
stories demonstrating how America’s top businesses, all too often, behave in ways completely antithetical to society’s well-being (while profits and wage &
wealth inequality soar).
In brief, the BR’ new policy
statement reminds us that the corporate aristocracy has been waging class warfare against the 99% for the last fifty years, and really amped up the blitz w/ the fall
of the Berlin Wall. It further reminds
us of our two-tiered societal structure and justice system, often written about
in this very blog. The last fifty years
is best defined by the rise of a Neo-Gilded Age, and directly correlated w/
that ascendency, a brewing and ongoing populist revolt. That is to say, an economy,
government, and justice system for the one percent, versus an economy,
government, and justice system for everybody else.
Let’s pretend for a moment that
this is actually something more than window dressing and platitudes. One can be forgiven for being cynical. Afterall, plutocrats have been wringing their
hands - since the ’08 crash and their subsequent bailout by the Federal Reserve
- and advocating reform (while often lobbying for the complete opposite behind
closed doors, or via their K Street minions).
What exactly would the business
& financial elite have to do to achieve the aforementioned goals?
Well, for starters, the BR would
need to break up the monopolies and cartels many of the CEOs have ownership
stakes in and run daily. There’s no
greater threat to community & democracy than unchecked power; and today, there’s no greater unchecked power than America’s cartel & monopoly economy. Serious competition w/in US business sectors
would provide the checks & balances that are entirely missing today (and that our owned government fails to provide), against the unprecedented economic power the CEOs of the BR wield. And no, American
businesses do not need colossal scale to compete on the world stage,
contrary to what we are told daily. Just ask Boeing.
So as to end fiscal, foreign
policy, judicial, monetary, and regulatory capture (that is to say, creating a democratic
government that responds to the will of the people, instead of an elite few),
BR CEOs would, ideally, need to insist upon campaign contribution and political reforms, such as: term limits; limits to the campaign season; and caps on
campaign contributions and spending.
Perhaps a constitutional amendment that would reapportion the Senate in a
more representative fashion? Since we're
dreaming, popularly elected SCOTUS members, as well as, a popularly elected
Federal Reserve decision making body, including, but not limited to, the Chairperson.
If we are truly going to protect
the stakeholders in society, the CEOs of the BR are going to want to put a
leash upon – if not altogether eliminate - ALEC, K Street lobbyists & the US Chamber. It’s these bodies that often
advocate policies and positions that no responsible company would be caught
dead advocating in public, on behalf of their business patrons (that is to say,
ALEC, K Street, and the US Chamber are paragons of the profits before all
mentality that has crushed the American Dream and virtuous capitalism).
Since we are talking
diversity and inclusion – dignity & respect – among all employees, that
pretty much rules out supporting the GOP, which is xenophobic, homophobic,
misogynistic and racist. It’s hard to
express & achieve the BR’s new goals and support the political party of bigotry. Isn’t it?
And while we are placing the US and
her communities first, the offshoring of jobs to save a buck, the Uber economy,
treating employees as contractors & subcontractors… yeah, that has to
go. And the BR, if its genuine and
sincere, obviously must see the need to provide equal pay, paid maternity
leave, and a living wage? Right?
How about investments? Would we expect a reputable CEO and company
to be hanging out w/ dictators and despots on the global stage… dictatorships
who behave in ways completely antithetical to America’s, and American multinationals',
professed values of freedom, human rights, liberty, rule of law, democracy and
yes, even – often ignored – egalitarianism?
Doesn’t really work for CEOs to be seen w/ killers, like MBS and Saudi
Arabia, does it?
And then there’s crossover
investments, and board seats, w/in America itself. Should the BR’s CEOs have investments w/ gun
manufacturers, how about the ultimate earth killer, Big Oil… what about the
MIC, which sells death and mayhem around the globe? Not a good look, and entirely inconsistent
w/ the BR’s renewed conscience. How
about tobacco and Big Pharma, which robs the public and the taxpayer,
daily. Perhaps the BR CEOs could
recommend ending some of these industries, or current business practices of
same, altogether? At the minimum, boycott & divestment would seem entirely appropriate.
What of accounting and tax fairness, simplification, and transparency?
There’s little doubt that such reforms would better serve America, her
communities, employees, and yes, even shareholders (done properly, it just might spur aggregate demand). How about a tax on wealth to mitigate the power of the ownership class, who make unseemly demands of BR CEOs… unseemly
demands like taking out massive loans on the corporate credit line to finance dividends
and stockholder buybacks? This debt, if history repeats, setting companies up for failure, during the next economic downturn. What better way to protect communities, employees, and in the long term, shareholder value?
Limits on the amount of leverage applied to predatory private equity LBOs? What better way to protect: bondholders, business, labor, stakeholders, and the American economy?
Limits on the amount of leverage applied to predatory private equity LBOs? What better way to protect: bondholders, business, labor, stakeholders, and the American economy?
How about trade agreements that
dispense w/ dictators, or that are tied to reforming nondemocratic regimes and
improving democracy and human rights? Such trade agreements just might mitigate the mass migrations we are seeing out of the world's authoritarian/totalitarian regimes & failed states. What about fair trade agreements that mitigate labor, regulatory, and tax
arbitrage, and give labor a seat at the table during negotiations?
Et al., et al.
Yes, let’s not be naïve, or take the BR at its word… but let’s be willing to suspend disbelief for a moment and
imagine that these CEOs are, collectively, ready for real change. It took fifty years of neoliberal
ideology to create our present mess; it’s going to take a while – and perhaps a
couple of progressive administrations – to unwind.
There’s, obviously, a great deal of money to be made in honesty, truth, and transparency (otherwise these smart
business leaders wouldn’t be recommending these changes). But w/in the short to midterm, the transition
to a more compassionate & ethical capitalism, like that proposed by the BR, could prove challenging, indeed. Perhaps the BR could backup their mission statement,
w/ an action plan and a timeline?
At the end of the day, actions
speak louder than a press release.
It would be presumptuous for JMH
to assume to speak for all Americans…. However,
my guess is the majority of Americans would gladly support the aforementioned reforms.
Would it be better if these
leaders – and the ownership class - took these actions upon themselves, or wait
for a nonviolent political revolution that insisted upon changes, perhaps even
far more draconian?
After all, class warfare,
ultimately, is bad for: America, business, capitalism, and profits.
Copyright JM
Hamilton Publishing 2019
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