Cash Bonuses, Wealth Inequality and the ‘Corporatocracy’

From Here & Back Again

By James Coufal

(Cazenovia, NY – March 2013) As much as I read, watch and observe, I missed any notice of a 28th amendment being proposed. Chris Hoffman’s column brought it to my attention and, I hope, to many of you. Thanks, Chris.

Briefly, the 28th amendment would do away with the façade of corporations being people, as was passed by a Supreme Court of the United States decision in 2010. The so-called “Citizens United” decision.

In his book, “Fine Print,” David Cay Johnston, soon to be a speaker in the Cazenovia Forum series, describes what he calls the takeover of America by the “corporatocracy.” It is a very revealing look at how large corporations, with the knowing or unknowing aid of government at all levels, are fleecing the mass of people while growing stronger all the time.

It’s well worth the read.

In the last chapter, Johnston offers suggestions as to how we can overcome this very real takeover, the most important of which is to have the Citizens United decision overturned. The 28th amendment would purposefully do this and is a real action people should support with the kind of zeal gun advocates muster over the issue of gun control.

The corporatocracy is a complex thing, and all I can do here is offer some brief examples of how things work. If they seem a little off-base, remember they are woven in an intricate system.

The growing wealth inequity in the country is part of it. Recently, State Comptroller Thomas DiNapoli issued a report wherein he estimated that cash bonuses paid to New York securities industry employees will rise by 7 percent to $20 billion during the bonus-giving season.

The average cash bonus rose an estimated 9 percent in 2012 to about $121,900.

Those receiving such bonuses are often the same people who were involved in the Wall Street crash and our economic downturn, and many of them now hold important economic positions in government.

Fox/henhouse?

It’s not as if these folks weren’t well-paid to begin with. The average salary, including bonuses, in New York City’s securities industry was $362,900, or 5.3 times greater than the average $67,900 of the rest of the City’s private sector.

During our economic downturn, the securities industry showed a profit of $23.9 billion in 2012, or three times the profit in 2011. So, just who is suffering? New reports show the big banks buying up foreclosed properties so they can then sell them at a large profit to you and me.

These are the same banks that were instrumental in the Wall Street collapse and the downturn; of course, it’s legal, but the system limits who can do it to the wealthy.

G. William Domhoff, in his study, “Wealth, Income, Power,” says:

“First, wealth can be seen as a ‘resource’ that is very useful in exercising power. That’s obvious when we think of donations to political parties, payments to lobbyists, and grants to experts who are employed to think up new policies beneficial to the wealthy.

“Wealth also can be useful in shaping the general social environment to the benefit of the wealthy, whether through hiring public relations firms or donating money for universities, museums, music halls and art galleries.”

Wealth and income disparity in the U.S. is great and growing. Domhoff found that in 2010 the top 1 percent of households owned 35.4 percent of all privately held wealth; middle income people – managerial, professional, small businesses, etc., or 19 percent of those studied – held 53.5 percent, with only 11 percent of the wealth owned by the bottom 89 percent of the wage and salary workers.

Study after study has found the same pattern. Class warfare has broken out over less stringent disparities in the past, including those in this country.

How does this disparity come about? Going back to Johnston’s book, he describes the ‘how’ for many different industries, from oil and gas to Wall Street, railroads and others. One example must suffice here. How many of you have heard of a “master partnership?”

It is another “person” created by the federal government especially for pipeline owners. They collect taxes like any other industry. Fair enough, but here’s the catch. While they collect the taxes, they don’t have to pay them.

They get to keep them … Nice deal if you can get it.

Talk about deficit budgets and wonder how we got them?

The book, “Foodopoly,” examines the system that has just a few companies dominate and determine what we eat, from farm to dinner plate. More corporatocracy, fewer family farms.

Noam Chomsky puts it bluntly:

“…control of government is narrowly concentrated at the peak of the income scale, while a large majority ‘down below’ has been virtually disenfranchised. The current political-economic system is a form of plutocracy, diverging sharply from democracy…”

This is what Johnston calls the corporatocracy. By logic, we are mostly average or “down below” and, thus, disenfranchised.

We will stay there until we make our voices heard.

Jim Coufal of Cazenovia is a part-time philosopher and full-time observer of global trends. He can be reached at madnews@m3pmedia.com.