June 2003

Views expressed are those of the authors, not necessarily of the AFSC.

It Doesn't Add Up

Marty Jezer is author of Abbie Hoffman: American Rebel (Rutgers University Press) and The Dark Ages: Life in the USA, 1945-1960 (South End Press) among others. He writes for the Brattleboro (VT) Reformer and welcomes comments at <mjez@sover.net >

The same week that the Vermont legislature voted to raise the state's minimum wage from $6.25 to $6.75 an hour, it was reported that Central Vermont Public Services' CEO, Robert H. Young, had his compensation package increased from $303,000 to $938,184. My rough math indicates that minimum wage workers can expect an eight percent wage-hike, but will still be living in poverty even if they hold full-time jobs. Mr. Young, on the other hand, will enjoy a rise in income of more than 300 percent. Based on a 40-hour week, his pay will go from about $150 to $450 an hour.

CVPS spokesman, Stephen Costello, correctly noted that ratepayers are only paying part of Young's compensation, and that "outside consultants" recommended the generous package. Young's salary is competitive to what CEOs of similar-sized companies get. "We have to compete for talent across New England and across the country," Costello said.

But CEO salaries exist outside of the competitive free-market; it's a closed market of crony capitalism at its most blatant. CEOs sit on each other's company boards and reward each other with huge salaries, bonuses, incentives, and stock options. Those "outside consultants" don't reflect the interests of company employees or consumers of company products; nor do they represent small shareholders. More and more, our economy is becoming a two-tier, closed-circle system. When it comes to economic decision-making, most Americans are shut out.

Hard times seem to have no effect on executive salaries. American Airlines, losing $1.5 million a day and on the verge of bankruptcy, negotiated a $1.8 billion, 23 percent cut in wages and benefits from its unionized employees. Seven thousand face layoffs. At the same time, CEO Donald J. Carty rewarded himself with a $1.6 million bonus, doubled the pay of six top executives, and set up a protected $41 million pension fund for the company's 45 top managers. Airline unions forced Carty's resignation. Strong unions are a potential counter to crony capitalism, but in the current political climate they have very little power.

The demand for tax cuts dominates the economic discussion. Bush wants $550 billion in cuts over the next ten years, most of which will go to people like Young and Carty, the wealthiest one percent of the population. Some Republicans want to reduce the cuts to $350 billion, which is still more than the economy can afford. Those moderates have been attacked by right-wingers who, in TV ads, compared them to the hated and un-American French. "Nothing is more important in the face of war than cutting taxes," said Tom DeLay, the Republican House majority leader. Really?

Meanwhile, states face their biggest deficits since the second world war--a $100 billion shortfall by some estimates. Bush takes credit for cutting federal taxes, but he's forcing local and state governments to slash services and raise taxes.

An article in the New York Times
(4/21) describes some steps state governments are taking to balance their budgets. In Oklahoma, teachers are driving buses, cooking school lunches, and mopping floors because of cut-backs to support staff. Many states are slashing student financial aid, raising college tuition, and cutting faculty. Nebraska with a $761 million budget shortfall has cut 431 positions at the University of Nebraska, though not members of the Cornhusker football coaching staff. In Portland, Oregon teachers have agreed to work two weeks without pay, and in Colorado property tax breaks for elderly residents have been suspended and some school districts are on a four-day week in order to save money.

When pressed to comment on these cutbacks, Bush was unmoved. "It's because we went though a recession and we're at war," he told the National Governors' Association.

Worcester firefighters' new billboard. Source: wmass.indymedia.org/newswire/

Despite the talk of war and terrorism, police departments across the country are strapped for cash. Congress is cutting 6000 airport screening jobs--11 percent of the security force--in order to save $280 million in the federal budget, a miniscule percentage of the proposed Bush tax cut.

The war and reconstruction of Iraq is budgeted at $74.7 billion, though most experts believe it will cost more. Included in that budget is money for "universal health service delivery to the Iraqi population." I don't begrudge the Iraqis their medical expenses at our cost, but what about those millions of Americans who have no health insurance? And what kind of health plan will Bush be offering Iraq? The American-system of HMOs, bureaucratic paperwork, and high premiums, co-payments, and deductibles? If so, the Iraqis will have yet another reason for wanting us out of their country. Meanwhile in our country, millions of senior citizens, children, and low-income Americans are losing their health care benefits as bankrupt states slash Medicare and Medicare coverage.

It doesn't add up. Astronomical pay for top management but fierce resistance to an equitable livable wage for the millions of Americans in minimum wage jobs. Tax cuts for the rich but increased scrutiny by the IRS of the working poor who take the earned income credit. Much talk about terrorism and national security but not enough money to protect our vulnerable shipping ports, airports, or nuclear and industrial plants. More money for war, but less money for schools, health care, social services, and economic infrastructure--the necessities of future prosperity.

Ideology rules. The Republican right-wingers who dominate the Bush administration want to destroy government social programs and turn government services over to their cronies in the corporate sector. But the free market can't, without government support, build low-cost housing, provide universal access to health care, protect small businesses, downtown centers, family farms, and the environment against the scourge of corporate globalization, fund public education; nor can it show compassion for the poor and disabled. It just ain't profitable. By cutting taxes, increasing military spending, and running huge deficits, Bush and his allies are deliberately starving the public sector. Future generations will pay for their greed, their blunders, and the "political correctness" of their ideological blinders.

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