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The Emerging American Oligarchy Amidst all the chatter of an “ownership society”, it is clear that the new class in America is the top officers of publicly traded companies - the new American Oligarchs. During the three years ending 12/31/03 the compensation of the Chief Executive Officers of S&P 500 companies has roughly doubled from $4,124,000 in the fiscal year 2000 to $8,124,000 for 2003. It is projected by Paul Hodgson of The Corporate Library to advance to $10,751,000 for the current year, indicating an annual compound growth rate for the four years of Bush’s presidency of $41.17%. How about the rest of the labor force? Average wages for July 2000 were $14.02/hr as against $15.70 for this past July, slightly less than a 3% annual increase. This vast increase has nothing to do with “pay for performance” - The S&P stood at 1342.90 on January 22, 2001; it closed August 31, 2004, at 1104.24. Let’s look at what they did for themselves by way of tax “reform”. While tax reduction benefited the average worker about $500 a year, the $10,000,000 a year CEO will receive a tax cut of approximately $400,000. and retain 85% of pre tax earnings. Is this just another case of a winning American party taking care of its political supporters? No. This is quite a unique situation. The Oligarchs are the Bush Administration. Without lingering over long on Vice President Cheney’s brief and profitable sojourn in the private sector, we should nonetheless dwell on Treasury Secretary Snow’s unique claims to be the Chief Oligarch. Formerly head of the Business Roundtable at the time that organization famously defeated the accounting profession so as to be able to award CEOs “invisible, costless” options, Snow sweetened up the upwards of $70 million he took from CSX Corporation (whose shareholders had gained not a sou during his tenure) by adding on several years of fictitious service for purposes of calculating his own pension. And here is the ultimate lie in the claims for an “ownership society” In the name of giving employees’ ownership of their own pensions, government action has enabled corporate sponsors to avoid expense - and in the process, to add to their income statements handsomely, with according benefit to option holders - by the simple device of transferring liability to the employees themselves. This sleight of hand is effected with the boast that employees have been freed - yes, freed - from the protection of corporate and government financial back up. Did you ever hear of a defined benefit plan for senior executives being terminated? Are CEOs being “given” ownership of their pensions? Much like the recent experience in Russia, a few individuals in America under cover of law managed vastly to enrich themselves. In this they were aided by the explicit policies of the Bush Administration which will be known in history as the time of the American Oligarchy. October 2004
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