July 22nd / 24th, 2011
"America Needs FDR's 'Second Bill of Rights'"
Earlier this month, Federal Reserve Board Governor Sarah Bloom Raskin
spoke out about the relationship between pay disparity and our economy. Raskin
noted that the income gap between CEOs and workers was the widest it's been
since 1928, just prior to the stock market crash which threw America into
a depression.
Just how wide is the gap? According to Governance Metrics International,
CEOs saw their pay rise by 27% last year, while the average employee only
netted a raise of about 2% (other sources say 0% to 1%). Median CEO pay in
2010 was $9 million dollars, and their average bonus was $2.2 million. It's
no wonder, then, that the wealthiest 1% of our population account for 20% of
our nation's income.
Kenneth Douglas, former CEO of Dean Foods knows all too well about
executive pay, and, like Raskin, he is concerned about the growing income gap
between the haves and the have nots. Douglas ran Dean Foods until 1987 and
during his tenure there, he increased sales from $165 million to $1.4 billion
dollars. His salary at the time was $1 million, but it could have been more.
Peter Whoriskey of the Washington Post interviewed Douglas who told
him,"My board said, 'we want to give you more money as a reward for the company's
success' ". Douglas repeatedly rejected the offers, saying he was, "making
enough". Fast forward to 2010, and Douglas' successor, Gregg Engels, is
making $10 million dollars per year. Douglas had a Cadillac. Engels has a
private jet.
The Dean Foods story is an example of the moral decline of America's
corporations over the past two decades, but it is also an indicator of far
reaching economic problems. Said Raskin of the growing pay disparity, "The
inequality is destabilizing and undermines the ability of the economy to grow
sustainably and efficiently. Income inequality is anathema to the social
progress that is part and parcel of such growth".
Kenneth Douglas answered the age old question of "How much is enough?"
when he said he could live comfortably on a million dollar salary. His job was
to make an honest profit for Dean Foods, and to reinvest that profit in
the company and its workforce. But today's greedy CEOs and their Boards have
a much different focus, which is to shutter plants in America, open plants
in third world countries, pay foreign workers slave wages, ship the cheaply
made products back into America with very little tariff, and sell the
products at huge profits which end up paying for exorbitant bonuses and
dividends.
And just how profitable ARE these corporations? Former President Bill
Clinton told CNN's Wolf Blitzer that US companies with overseas operations have
$2 Trillion dollars in cash that they have not yet committed. And that
cash is only taxed at a rate of 5% because once upon a time, George W. Bush
said that lower taxes would result in the creation of jobs. He was right,
except that the jobs created were in Indonesia, Korea, and the Dominican
Republic.
President Obama's solution is to tax wealthy people at a higher rate. But
that doesn't create jobs either, nor would the additional revenue solve our
budget problems. As I've stated before, only the repeal of bad trade
agreements, and suspension of tax breaks for hiring overseas workers will make a
difference.
But what about the millions of people who have already lost their homes
and healthcare coverage from a recession caused by greed? Their suffering
could have been prevented had a little known act been passed in 1944.
In his final State of the Union address, President Franklin Roosevelt
proposed enacting the "Second Bill of Rights", which would have guaranteed
everyone the right to a good job, and a level of remuneration that would allow
the employee to provide for his or her family. It stated that every family
has the right to a decent home, and access to medical care. And, the Second
Bill of Rights declared that we would all be protected from the economic
fears of old age, sickness, accident, and unemployment. Unfortunately, FDR
died before the Second Bill of Rights could be enacted. That's too bad
because it would have changed EVERYTHING. Today's greedy CEOs wouldn't be able
to get away with laying off American workers and running sweatshops
overseas. They wouldn't be allowed to keep all of their obscene profits for
themselves. And the Second Bill of Rights would have protected us against the
greed of Wall Street.
It's not too late to re-visit FDR's grand plan, but don't hold your
breath. Republicans and Democrats can't even agree on a debt ceiling because
they're too busy arguing about light bulbs. Still, wouldn't it be wonderful if
one man's dream could end a nightmare for all of us?
|
