Empty Anti-Wall Street Rhetoric

	October 15, 2012
THIS WEEK
Back a century ago, in an age before push polls and voter databases, plutocrats didn’t mess much with subtleties. They just threatened. In the 1896 Presidential race, for instance, one New England industrialist opposed to the Populist-backed William Jennings Bryan had placards posted across the front of his factory.    “This factory,” the placards read, “will be closed on the morning after the November election if Bryan is elected.” Are plutocrats today rediscovering their heavy-handed roots? One Florida CEO last week emailed his 7,000 workers this stark warning: “If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company.” This emailing CEO, Westgate Resorts chief David Siegel, made headlines a few years back when he set out to build his own personal Palace of Versailles. Now he's trying to unload that abode for $100 million. In this week's Too Much, lots more on today's most arrogant — and some new pushback against them.
GREED AT A GLANCE
A third of publicly traded corporations in the United States now have security details in place for their CEOs. And security costs can be enormous. In 2011, the Las Vegas Sands shelled out $2.6 million to protect top exec Sheldon Adelson. But actual assaults on execs seem to be virtually nonexistent. Notes Business Controls Inc. founder Eugene Ferraro: “An executive who has ever really been confronted and their life threatened? That's kind of hard to find.” So why all the security? The appeal, observes a Mother Jones analysis, may be convenience: “Protection firms claim that they can save executives an average of 90 minutes a day by conducting 'advances' of venues, having cars and elevators waiting.” Cops in Louisiana don't figure to be keeping many more elevators waiting for CEOs. Their Louisiana Municipal Police Employees Retirement System has just filed a lawsuit against a $120 million payout for Simon Property Group CEO David Simon. Seems that Simon will pick up the $120 million if he just sticks with the company for the next seven years. The Simon Property Group, an Indiana-based real estate giant, says the $120 million will ensure that Simon will not take his talents elsewhere. The Louisiana pension fund is wondering where Simon could ever go and pick up that sort of cash. Simon’s late father, Melvin Simon, co-founded the company. The police lawsuit is calling Simon’s retention award “wholly irrational.” A Delaware court will be making the final call . . . Back in December 2010, the White House and GOP congressional leaders cut a deal that extended the Bush tax cuts of 2001 and 2003 through the end of this year. But that deal didn’t just extend the Bush tax cuts for America’s wealthiest. On the estate tax side, the deal actually sweetened them. One sweetener: For the past two years, deep-pocket couples have been able to sidestep future estate taxes by gifting up to $10 million, tax-free, to their near and dear ones. The lifetime gift tax exemption before the deal had been just $2 million. With less than three months left to exploit this sweet gift tax deal, wealth consultants are now urging rich clients to give to the $10 million max before year’s end. Congress might still extend this huge tax break for rich families, as Succession Capital Alliance’s Julian Movsesian is advising, but “it’s not worth it to take chances.”	Quote of the Week “What kind of moral outlook throws children, poor children, off of health insurance in order to give tax breaks to billionaires?” Senator Bernie Sanders  (I-Vermont), Viewpoint, October 10, 2012
PETULANT PLUTOCRAT OF THE WEEK
Are the feds cooking the books? Retired General Electric CEO Jack Welch tweeted that charge earlier this month after the official U.S. jobless rate fell under 8 percent. His chargebrought immediate ridicule down upon Welch from business journalists, including the managing editor at Fortune, where Welch has been writing a column. An indignant Welch then quit his Fortune gig and compared himself pompously to Soviet dissidents who dared challenge “ruling authorities.” Welch’s initial charge, notes analyst Dean Baker, reveals an amazing cluelessness about the Bureau of Labor Statistics. But the wild charge, adds economist Jeff Madrick, fits Welch’s own book-cooking profile. At G.E., Welch routinely had the corporate books manipulated, year in and out, to show increasing profits every single calendar quarter.
PROGRESS AND PROMISE
Local governments, a veteran UK lawmaker is suggesting, ought to have the power to declare neighborhoods “off limits” to rich people. In London and other UK locales, says MP Simon Hughes, the global wealthy are buying up homes that then sit empty for most of the year, creating huge dead zones where vibrant urbanscapes ought to be — and pushing home prices overall far beyond the means of average families. Localities, adds Hughes, should be able “to prevent housing from being bought unless it is going to be lived in.” The super rich, notes property law expert John Samson, sometimes leave homes vacant because they own so many — “a place in New York, a place in Monte Carlo, one in the south of France and so on” — that “they lose track.”	Take Action  on Inequality Upcoming next week: an interactive webinar for people interested in starting a local “resilience circle,” a grassroots group that links neighbors or co-workers in mutual support and social action.
INEQUALITY BY THE NUMBERS
	Stat of the Week Do CEOs care what we think any more? Corporate outlays for CEO perks — like free personal rides on corporate jets — dropped after the Great Recession hit. But total perk value rose in 2011. The typical Fortune100 CEO, says the Equilar executive pay data firm, took in $248,638 in “other compensation,” up 8.6 percent from the perk total the year before.
IN FOCUS
The Blitz of Empty Anti-Wall Street Rhetoric Candidates this fall are taking plenty of pokes at the financial industry's best and brightest. But they could be doing a lot more than poke. They could push to start taxing Wall Street. All those political ads flooding our media are smacking dozens of different targets. One particularly: Wall Street. From mid-April to mid-September, Ad Age reports, $1 of every $10 spent on campaign ads has blasted bankers. And these ads haven’t just come from Democrats. The list of “big anti-Wall Street spenders” even includes the Republican National Committee. Campaign strategists are placing these anti-Wall Street ads for an obvious reason. Wall Street’s greed grab, they understand, has deeply angered America. Last week brought still more cause for that anger. New York’s state comptroller, Thomas DiNapoli, revealed that average annual pay on Wall Street has shot up 16 percent over the last two years to $362,950. Financial industry pay in New York is now running 5.3 times higher than pay in the rest of the private sector. In 1980, Wall Streeters only averaged twice the private sector's take-home. The typical employee on Wall Street isn’t, of course, making $362,950. Wall Street secretaries don’t sit anywhere near that lofty total. But investment bankers and traders are making millions above it, and Wall Street’s “greater concentration” of these “most highly compensated positions,” as New York’s comptroller puts it, wildly skews the overall average. What are these “most highly compensated” doing to earn their millions? They’re running a casino. They take bets on stocks, currency, and commodities — and while away the hours designing ever more exotic financial “innovations” to bet on. On every bet, Wall Streeters take a cut, just like the “house” at any casino. And sometimes they rig the game and place their own bets on the sure-winners. This endless gambling impacts us all. Wall Street has essentially placed our entire economy on a risky roller coaster. On the ups and downs, crashes — even Great Recessions — become unavoidable.  Most Americans have at least a vague sense of these dynamics, and candidates are seeking to exploit this public unease with all those anti-Wall Street campaign ads. But we don’t need ads from candidates. We need commitments from them — to rein in our economic casino. How could these candidates start reining? They could enact what analysts call a financial transaction tax, a tiny levy on every “trade” — every gamble — that Wall Streeters take. Gamblers throughout the U.S. financial industry currently pay no tax on their wagers. All other gamblers in the United States do. Out of every $2 racetrack bet, a tax comes out. But Wall Street wheeler-dealers who can routinely bet billions pay no taxes whatsoever. A growing number of lawmakers in Congress are aiming to change this 1 percent-friendly status quo. They've introduced over a dozen different financial transaction tax bills. The latest — from Rep. Keith Ellison of Minnesota — would place a 0.5 percent tax on every stock trade and somewhat smaller taxes on every trade of bonds, derivatives, and currencies. Wall Street movers and shakers are predicting economic doom, not surprisingly, should a financial transaction tax ever become law. Traders will merely, they argue, shift their trading abroad. But if these traders should flee, they’ll have a hard time outrunning financial transaction taxation. Last week, 11 European nations, led by France and Germany, agreed to implement a new tax on stock, bond, and derivative trading. This landmark new victory for financial transaction taxation in Europe figures to give Ellison’s bill some substantial momentum. Some 130 organizations, part of a  “Robin Hood tax” campaign, have already endorsed it. These Robin Hood campaigners don’t have a fraction of the cash spent so far on all those anti-Wall Street political campaign ads. But they do now have solid legislation to push — and an equally solid determination to keep all those anti-Wall Street candidates honest. To encourage your representative in Congress to co-sponsor Rep. Keith Ellison’s new Robin Hood tax, click to this online action center.	New Wisdom on Wealth Robert Russell, We're on a dangerous path to government by wealthy,Patriot News, October 9, 2012. History teaches, notes this Penn State business analyst, that wealth that concentrates will be used to ensure that elite groups retain their economic advantage. Travis Waldron, The Definitive Timeline Of Romney’s Ever-Evolving Tax Plan, Think Progress, October 10, 2012. A recitation of the twists and turns that distract voters from an ongoing effort to usher in still more tax breaks for the rich. Harold Meyerson, A real class war may be on its way, Washington Post, October 11. Why a “majoritarian redistributionist movement” may well be on the horizon. Chris O'Brien, Bad news for boards: That superstar CEO you just hired will probably fail, San Jose Mercury News, October 12, 2012. So says an exhaustive new study. Chrystia Freeland, The Self-Destruction of the 1 Percent, New York Times, October 14, 2012. A look at plutocratic rot's inner essence, from 14th century Venice to today.
NEW AND NOTABLE
Inequality and the World Economy: A Special Report, The Economistmagazine, October 11, 2012. In the United States, top conservatives are still trying to deny growing inequality. But influential UK conservatives aren’t just acknowledging our unequal reality. They’re agreeing, in a just-published Economist magazine special report, that widening gaps “reduce both social mobility and future prosperity.” These conservatives are urging a new “true progressivism” agenda all about “attacking cronyism and investing in the young.” A good start. But this “true progressivism” ultimately rings false. TheEconomist crowd still fiercely opposes higher taxes on the rich, the key to preventing the grand concentrations of private wealth that make cronyism all but inevitable.	Web Gem Walmart at 50: Change Walmart to Rebuild America/ Explains this dynamic new site devoted to the voices of Walmart workers: “The profit of the very few is coming at the expense of America’s middle class.”