Wednesday, August 1, 2012

A Primer on Greed

OK, boys and girls.  The word for today is:

greed [greed] n

strong desire for more: an overwhelming desire to have more of something such as money than is actually needed

Let us illustrate this word with an admittedly absurd example.

- I need enough food to keep from starving to death.

- I need enough food to satisfy my hunger.

- I need extra food to store away in my home to keep me from running out someday.

- Just in case the food runs out in my home, I need a warehouse (or maybe 2 or more) to be able to fill up with more food.  After all, one can never have enough!

- Whew!  All this food doesn’t seem like it’s quite enough.  I may well have to steal some. Maybe others won’t have enough – but that’s their problem!  I may land up going to jail, but it’s a chance I have to take because…repeat after me…one can never have enough!

So this is indeed an absurd example.  Or is it?

If we substitute ‘money’ for food and ‘banks’ for warehouses, we can come up with plenty of real life examples of greed.

For example, there is today’s favorite example of someone who is filthy rich, Mitt Romney who is reputedly worth about a quarter billion dollars.  Romney and his company, Bain Capital had an unlimited appetite for making millions upon millions of dollars even though many people lost their jobs in the process.  And then there are all of those overseas investments in places like the Cayman Islands (presumably to avoid taxes).  But is the relatively small amount of money he saved by doing this worth all of the grief he is taking from the need to hide all of this by not releasing tax returns that people from both parties are demanding?

Then there is the flap over Ralph Lauren outfitting the 2012 US Olympic team with clothing made in China.  Look, I get it.  Chinese labor is much cheaper than ours.  So when selling goods in a very price sensitive marketplace, manufacturers may well have to cut costs in every way possible to stay competitive.  But a look at the Ralph Lauren website shows for example, men’s polo shirts for $145 up to the double breasted blazer for a cool $795.  It is obvious that these upscale items are hardly price sensitive and are likely to be hugely profitable for the company.  How much of that huge profit would they lose out on if this clothing was made by American workers? 

A similar argument can be made about Apple and its very profitable iPhone and iPad which are also manufactured in China.  To add insult to injury, Apple has received a great deal of criticism over the horrid labor conditions in Chinese factories making these devices.

In 2010, workers in China planned to sue iPhone contractors over poisoning by a cleaner used to clean LCD screens. One worker claimed that he and his coworkers had not been informed of possible occupational illnesses.  After a spate of suicides in a Foxconn facility in China making iPads and iPhones, albeit at a lower rate than in China as a whole, workers were forced to sign a legally binding document guaranteeing that they would not kill themselves.  In 2011 Apple admitted that its suppliers' child labor practices in China had worsened.
Workers in factories producing Apple products have also been exposed to n-hexane, a neurotoxin that is a cheaper alternative than alcohol for cleaning the products.

See the above link for footnotes to support these assertions.  Suicides and child labor issues aside, it’s beyond belief that Apple was willing to see their factory workers exposed to a toxic chemical for the sake of preserving every penny of profits. But when you are a corporation, you can never have too much profit!

And check out this list of notable accounting scandals which include Enron and Bernie Madoff.  These are examples of CEOs and other executives who were already fabulously wealthy resorting to crime to further pad their wealth with many of them now deservedly serving jail time.

So what do these super wealthy individuals do with all of this money?  Bill and Melinda Gates along with Warren Buffett set up a philanthropic foundation aimed towards helping people in poverty.  And there are many others who share their wealth in similar ways who are not as well known.

But what is most disturbing are the increasing efforts of some of the super rich to buy politicians and elections.  Yes, money has always been a significant part of politics, but the infamous Citizens United Supreme Court decision opened the money floodgates wide open by allowing unlimited political contributions to persuade the electorate to see things their way.  It has already had an effect on the 2010 elections and will undoubtedly figure prominently in the upcoming 2012 elections.

One of the efforts by the super rich centers on the estate tax lobby.

2006 report by Public Citizen and United for a Fair Economy -- both nonprofits opposed to concentrated wealth -- identified 18 families financing a coordinated campaign to repeal the estate tax altogether. Among the leading names behind that push: the Gallos (E&J Gallo Winery), the Kochs (Koch Industries), the Mars' (Mars Inc.), the Waltons (Wal-Mart), and the Wegmans (Wegmans Food Markets). At the time, the report estimated the families' collected net worth to be at least $185 billion, roughly equal to the market cap of Google today.   

A couple of the above families are worth a special mention.

Here is a list of the Walton family fortune as of 2012 published by Forbes:

- Christy Walton and family US$25.3 billion
- Jim Walton US$23.7 billion
- Alice Walton US$23.3 billion
- S. Robson Walton US$23.1 billion
- Ann Walton Kroenke US$3.9 billion
- Nancy Walton Laurie US$3.4 billion

Total: US$102.7 billion

To put the above number into some perspective, this one family has a net worth equal to the combined wealth of the bottom 30 percent of all Americans.  Remember “filthy rich” Mitt Romney?  This is equal to about 400 times Romney’s estimated wealth.

While all of this incredible wealth has been accumulated, Wal-Mart has been notorious for low pay and benefits for its employees over the years and has dealt with unions as mortal enemies to be destroyed.  But just think about how a tiny fraction of this fortune directed towards providing a living wage and good health benefits for their workers would help the lives of so many families who are struggling to stay above water.  Obviously, they haven’t thought about it.

And then there are the Koch Brothers who at one time were unknown to most but have since been profiled in the media (but probably not on Fox News or others on the right) for their political activity that consists of buying politicians to promote their agenda of among other things, environmental deregulation (to save money instead of preventing and cleaning up pollution), climate change denial (so we will continue to use the fossil fuels they produce), and union busting (to share the least possible amount of money with workers).   

To get a better sense of what this is all about, please check out this video link from the excellent Robert Greenwald documentary, Koch Brothers Exposed    For those who are interested, here is one of my previous postings, The Koch Brothers - The Most Powerful People You've Never Heard Of.  They have especially benefited from the aforementioned Citizens United Supreme Court decision allowing unlimited political contributions. 

So this ends our little primer on the subject of greed.  What can we learn from all of this?  It’s that greed is all around us and will be as long as people walk the face of the earth. While some will get the lion’s share and others get the crumbs, there will still be some who will come back to go after the crumbs they missed the first time around. And while we can’t get rid of greed in this world, we can do a better job of recognizing it and calling it out for what it is. 

For example, when we see politicians who advocate more tax giveaways for the wealthiest among us while asking for sacrifice from others of their safety net, that is greed!  And when fabulously rich CEOs and their bought politicians are out to crush the efforts of workers to collectively bargain over living wages and working conditions, that is greed! 

While the greedy can do their best to buy the government they want, when we go to vote, we can send a message to all of them.  That unlike what the fictional Gordon Gekko from the movie, Wall Street had to say on the subject, greed is NOT good!