Who's waging Class War?
Watching Washington's know-it-alls perform on the Sunday morning political talk shows is much like watching blowfish, cockatoos and other showy critters featured on the Animal Channel. What a hoot to see them strut their stuff!
My favorites are such persnickety pundits as George Will and pompous politicos like Phil Gramm who puff up and fall into absolute hissy fits at the merest mention that working folks are not getting much benefit from Wall Street's economic boom: "Class War," they sputter and spew. "The left is trying to foment Class War in our country!"
The left? Do they mean Newt Gingrich, Bill Clinton, Alan Greenspan, Tom DeLay and Robert Rubin? Or maybe "Chainsaw Al" Dunlap (Sunbeam), Philip Knight (Nike), Michael Eisner (Disney) and Robert Allen (AT&T). These are your class warriors, each one a part of the army of ignorance and arrogance operating from Washington and Wall Street an army that is waging a relentless economic war against America's working folks, literally knocking down the middle class. The left is not fomenting a class war, but it damn sure should begin to fight back against the furious assault from the corporatists on the right.
You want class war? Meet Gerry Cameron, CEO of U.S. Bancorp based in Portland, Oregon. This spring, he engineered an $8.8 billion takeover of his own bank by First Bank Systems Inc. in faraway Minneapolis. Four thousand Bancorp employees were being hurled out the door as a result of Gerry's deal, and 44 local branches were being closed.
Also, the law firm servicing U.S. Bancorp, the cleaning crew that maintained its office tower, and the small flower shop on the ground floor all took hits. Business after business lost jobs and income as the Minneapolis owners consolidated their acquisition and Bancorp cutbacks rippled through the Portland economy. To be fair, the flower shop did have one shortlived uptick in business: sympathy bouquets delivered to departing bank employees.
It should be noted, too, that Mr. Cameron went out of his way to assist at least one Bancorp employee: himself! The merger gave him a $12.4 million personal thank you payment--tax free, since First Bank agreed to pay all taxes he'd owe on that generous sum. He also gets to be chairman of the Portland division of the Minneapolis bank, continuing to receive his $1.6 million annual paycheck plus gaining untold millions in profits from the Bancorp stock he owned. And his new stock options on 100,000 shares of the Minneapolis bank are worth at least $8.6 million. To put a cherry on the top of this whipped cream of a deal, Cam eron is also assured of being paid $1 million a year after his planned retirement in 1998.
You want class war? The Bill Clinton/Newt Gingrich/Trent Lott tax and budget agreement is a primo example. The working poor will be worse off under this raw deal, and the middle class will feel very little or no improvement. But the wealthiest 10%, and especially the wealthiest 1% the millionaire class will make out like bandits. Major corporations are the big winners, not only fighting off any cuts in their existing welfare benefits, but actually gaining more than $100 billion in new loopholes and subsidies.
Notice that payroll taxes were not reduced one iota or spread more equitably. And while our Medicare program took a $115 billion chop. The multibillion dollar Pentagon budget was not even on the cutting table; it will enjoy about a $20 billion increase.
Yet when Clinton gleefully signed this sucker, announcing in his best Reaganesque tones that "the sun is shining on America again," he used a couple of middle class families as his photo op props. Out of camera view, the corporate lobbyists sported broad and knowing smiles.
You want class war? Talk with Angela Stroud. For 17 years, she worked for Champion Products in Clayton, N.C., turning out quality sweatsuits, jerseys and other sportswear items. She and her coworkers have made this division of Sara Lee the industry leader, even supplying the uniforms for the NFL, the NBA and last year's U.S. Olympic team.
Despite her loyalty and productivity, however, Angela and 414 other Champion workers in Clayton were punted out the factory door in April. They were the latest to join 1,400 other Champion employees in North Carolina (62% of its statewide workforce) who have lost their jobs in the past five years.
Is Champion losing sales or is Sara Lee unprofitable? Hardly. Business is booming and Sara Lee took nearly a billion dollars in profits last year. But the company can go from profit to profiteering by shipping production--and Angela's job--to Chihuahua, Mexico, where 50 cent an hour labor is available and health and safety laws are a cruel joke. Then, thanks to NAFTA, Champion's products can be trucked right back across the border (in Mexican licensed and driven trucks) without any tariffs being applied. Interestingly, Champion charges the same price for these cheaply made imports as it does for U.S. made goods. Those at the top of the company pocket the difference between Angela Stroud's $10 an hour wage and the 50 cents they pay to Chihuahuan workers. Let's compare Ms. Stroud's severance with Gerry Cameron's multimillion dollar severance in Portland. She gets a week's pay for each of the 17 years she devoted to Champion. That is only four months, then she's on her own. Adios chump, is the corporate attitude. They call this "global competitiveness," but that's globaloney. Call it by its real name: Class War.
©1998 Dollars and Sense Magazine. Reprinted with permission. Subscriptions to Dollars & Sense are $18.95 from 1 Summer St., Somerville, MA 02143.
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