In loving, living memory, John Melançon 1928 – 2007
Summary to a friend:
The first one was quite good. In addition to presenting how messed up things are and the need for radical change in a really good way to talk about, to continue the conversation with just anyone -- how the reaction to squeezed profits is to shift costs onto all of us (less pay for more work, but also tax subsidies, services cuts, so that you can come up with examples forever), the parts that were new to me:
- top 50 hedge fund managers paying themselves an average of $588 million
a year-- more than 50 times fortune 500 CEOS, who are themselves paid 333 times more than the average worker.
- the speculative economy is 95% of the money economy. It's far, far bigger than the real economy
Squeeze out what we have
Who owns oil? If anything, it belongs to everyone in common.
And they use military operations – paid for with our taxes – to get access and control that petroleum.
Pollution is another form of shifting costs.
Asbestos– they knew in the 1930s it was dangerous. And then the company just dec
The internet - taxpayer paid for the development.
Private owners got 40 year mortgages to provide
The whole housing industry and
Book: unjust deserts: between 85 to 90% of all our productivity is from common heritage.
Gus Faith (?) wrote-- as we approach an era of resource scarcity, the amount of
The whole US economy is based on extremely cheap energy.
Massive subsidies for agribus
You can't run a complex economy
Egregious Pennsylvania with the juvenile court system
And immigration– they did not
Me: that applies to people in the U.S. too, we just aren't educated as well.
This is why I love radical economics. There is nothing.
The Working Class Squeeze
More than $3,000 less median per worker
Taxis shifted from wealthy individuals and onto the rest of us
And services are going down. And that's used to recruit working class people
Before the housing crisis half of all home foreclosures was because of medical emergencies.
Private equity firms are investment clubs for rich people. Need a million dollars to invest. And they regularly get 20-30% return on this investment.
In 2004, Goldman Sachs, TPG, Bain Capital buy Burger King for $1.5B, put up only $325M (which is typical)
They also pay themselves from BK:
$30M "transaction fee"
$9M management fee
Loaded BK with debt and paid themselves $357M dividend
$33M bonus for good management
$30M to end management contract
IPO: $425M - still held 75% of stock
2007: sold more stock, $462M, majority share
So they took $1.3B in two years from the $325M plus loan they put up.
so the management stuff went to Goldman Sachs-- they get paid first.
The second circle out is the extremely wealthy private equity investors
then the outside circle, the lenders, just make the usual
This company will be staggering under this debt for a long time.
Moody's said you have loaded this company up with debt and gave a negative rating-- it's got to be really bad for them to say this to the company that hired them for the assessment.
They stripped the future of the company for their present profit.
Company will survive.
also shifting coss onto the public-- a worker at $14K a year -- and the family -- is on every form of public assistance.
They did hire a CEO who turned the company around. Recenly quoted as saying BK is now "the leader in handheld chicken products"
From 1986 to 2002, GM spent:
43% of net income on stock buybacks
52% of net income on dividends
95% paid out, retaining only 5% to finance future operations and growth
if they'd merely banked that, they'd have $33.8B even at the tiniest interest rate of 2.5%
Average worker, $30K a year
S&P500 CEOs $10M a year
Top 50 Hedge & Private Equity Fund Managers
average $588M a year
many a billion or three billion
The problem of extremely and rapidly concentrating wealth-- you have to find a place to invest it.
Profit rates in the real economy are too low (the whole economy is growing only 3% a year)
So: build a casino (economy)
-> make your own rules
Problem of risk? Push it onto everyone else.
Manufacturing as a share of GDP went from 25% to 10% from 1950 to now, while
Finance went up to over 20%.
They don't need us to make money, except to strip some of our
We've lost leverage. There's not a lot of future for workers in this picture.
Black woman: It makes all these job training programs a joke.
I think the bailouts have to stop. All we're doing is taking wealth that might vaporize, held mostly by the wealthiest
Capitalism structures debt obligations to make you work 30 years to pay off. We'll be working for them the rest of our lives.
Cancel the debt.
Movement in Italy has slogan we should adopt: "We won't pay for your crisis."
Why do banks have to make money off of moving money around
A number of suggestions for fundamental change
Charles: More and more a sense to people I talk to that these people are criminals.
How do we make it real for people?
When is the anger going to turn into action?
How are we going to take care of people falling through the cracks?
Why are we having so many tent cities?
taking care of each other
Mike: We're doing a lot of detailed work on the ground, why not orient it toward fundamental change in the system?
How do you organize
Republic Window in Chicago
But lead by a communist union,
the formula here is,
you have something they want
mobilize public opinion in your favor
Turned it into a blow against Bank of America (and JP?)
UE turned this into a viral campaign that way
Plant is supposed to re-open under new ownership
Another example is City Life
people refusing to move when foreclosed on
Very few of the 13 eviction blocking actions have led to arrests.
One family said, we can't do this any more
Lawrence, on the bullhorn, telling people we're prepared to get arrested
one of the lawyers watching the cops, saw two of them crying
there is a certain amount of class identity here
Chuck Turner - up on federal charges has turned it around
Get in touch with City Life about a May 2 action
They're doing something around a woman who got foreclosed on.
Their websites pretty lame. Give them a call.
Howsing debt doubled in ten years– $5 trillion to $10T.
The careful looking at
Builds a stack of chairs.
Two fall off with a crash. "Just a market correction."
It won't crash
They don't stay up
$45T in credit default swaps. Which according to Alan Greenspan was the way of spreading the risk that meant regulation wasn't needed. It becomes just something to buy and sell. "With deregulation they finally created Four-fifths had no basis on an underlying asset.
On top of $35T (the stack of chairs)
On top of $5T
They are saying
House of Representatives voting it down the first time.
The gun they are holding to our heads is that if we don't bail them out they will take the whole economy down with them.
The strategic power of the working class in developing countries, where the productive economy is moving too.
Woman: I'm really concerned that this is the moment for change, for organizing, and I'd like to see what we do now.
Mike: Ideally, it comes out of the organization you work for.
Connecting what is happening to people in their community
Me: Organizing retail workers-- guaranteeing salary for a year if fired for workplace organizing.
[How many would it take us to chip in to support a $20K, let alone a $14K, salary for a year? Eighty of us chipping in $250 each? So to fully subsidize a workplace of 100 people (that would cover Christmas Tree Shops) we would need 100 times 100, a full 10,000 people who really really give a damn and have disposable income. OK, not impossible, but extremely unlikely, and ]
Difference between worker to CEOs to hedge fund managers. And look at other countries.
John: I was involved in building a . Works at Dollars & Sense. I think this kind of education is so important. I'm going to add 5-10 hours
Jobs With Justice is sort of organizing a training for trainers for this, to take it to student groups, unions
Get clear whose to blame, who is not to blame
reasonably clear analysis