The pace of the ideological shell game has accelerated in a desperate effort to prevent the public from connecting the “economic dots” and drawing historical conclusions.
As the stock market tanks, 401(k) retirement savings vanish and $7 trillion in stock value evaporates, “infectious greed” (Allen Greenspan), a few rotten apples, accounting fraud, extravagant executive stock options and insider trading have been offered as explanations.
To keep the focus narrow, a few executives from WorldCom and Adelphia Communications – with much fanfare – have been hauled off to jail in handcuffs. Plus a number of other corporations are under criminal investigation, e.g., AOL, Computer Associates, Global Crossing, Enron and Qwest.
The Financial Times surveyed executive incomes (salaries plus sale of stock between 1999 and 2001) at the “25 largest U.S. companies to go bust in the last 18 months.” Of the 280 executives and directors surveyed, “52 grossed more than $10 m[illion], 31 more than $25m, 16 more than $50m and eight more than $100m.” These “business excesses” put “the whole system … in jeopardy,” according to Ambassador Felix Rohatyn, the former director of Lazard Freres and governor of the New York Stock Exchange.
Dennis Kozlowski, the former chairman of Tyco, Ltd., has gained particular notoriety from charges that he evaded New York State taxes on the purchase of art work and the deferral of taxes of $208 million in stock option profits.
The scandals have created a booming business for the flacks on Madison Ave. “Like a rock band making the big leap from cult following to global iconic status, corporate social responsibility (CSR) seems to have hit the business mainstream in the last twelve months,” commented PR Week, a public relations business publication.
President Bush, a dubious voice for CSR, went to Wall Street to preach the virtues of corporate responsibility, and shortly thereafter signed “tough” legislation to “curb corporate fraud and end the era of low standards and false profits …” (The administration immediately limited the provision that protects corporate whistle-blowers, a step that keeps the door ajar for “corporate evil-doers.”)
While the administration and Congress, PR firms and the mass media engage in damage control, the unspoken crimes of “market fundamentalism” proceed on a Fast Track. The global finance-driven neoliberal agenda escaped unscathed from corporate scandals. For the United States, this means more McJobs, more unemployment, more inequality, more looting of Social Security, more fiscal crises and the austerity they impose, more environmental casualties, and less health care – all, for the moment, perfectly legal crimes.
But the “criminal code” can be changed democratically. There is no reason why 2,525 individuals and married couples with an average adjusted gross income of $389,000 paid no federal income tax. The wealthy, contrary to the way they present themselves, are not the geese that lay golden eggs.
Wealth comes from workers. It is merely appropriated by a few. Under current governance corporate responsibility is an oxymoron. It is time to federalize corporate charters with sunshine rules and significant worker representation on the boards of directors. Even federally regulated corporations can not be relied upon to create full employment.
Tax the wealthy to pay for public works projects, for schools, bridges, alternative energy sources, etc. These can bridge the gap. None of this is particularly radical. It is democracy in action. We have just been encouraged to worship wealth for the past 20 or so years. Now we know it’s a false god.
The author can be reached at pww@pww.org
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