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George Waring dives into Davos


By George Waring 2-12-14

The best of times, the worst of times

                1789. “It was the best of times. It was the worst of times.” I thank my Jr. High English teacher for having us read Dickens’ Tale of Two Cities, and then for treating us to the Ronald Coleman movie version. Some sixty years ago lessons in social justice were presented by union teachers in public schools, right here in the U.S.

                This reminiscence introduces my subject: “the best of times” for the fortunate few. In the Swiss Alps in January, 2,500 global “aristocrats” gathered by day to solve our planet’s problems. They only partied through the nights. Christopher Dickey, formerly Newsweek’s Paris correspondent, wrote a column about the revelers last month entitled: “Income Inequality Was Quickly Forgotten at Davos.” He began his account with the following sentence: “’It kind of disappeared,’ said one woman at the end of the World Economic Forum when someone asked what happened to perhaps the greatest issue facing the world today.”

                Prior to the Forum our corporate media fed us nonsense about the serious attention that Davos would give to the growing global problem of accelerating poverty. The conference organizers commenced the forum by calling on attendees “to address the explosive imbalance between the world’s astronomical rich and those who live in grinding poverty.” Pope Francis sent the glitterati a “polite but blunt” plea: “I ask you to ensure that humanity is served by wealth and not ruled by it.”

                Coinciding with the Davos forum, Oxfam issued a working paper  on growing global poverty, “Working for the Few: Political capture and economic inequality.” Three points made the news: “Almost half of the world’s wealth is now owned by just one percent of the population. The wealth of the one percent richest people in the world amounts to $110 trillion, 65 times the total wealth of the bottom half of the world’s population. The bottom half of the world’s population owns the same as the richest 85 people in the world.”

                Dickey’s report concluded with this summation:

                “The consensus among the rich guys I talked to (most of whom had left in their chauffeur-driven Audis and private jets on Friday), was that Davos this year was just the way it should be: a place to make more deals face to face with more people much faster than they could anywhere else – then spend a few hours on the slopes or taking in the esoteric offerings on the conference agenda, like Goldie Hawn talking about meditation. “I like to improve my mind,” one influential American CEO told me.”

                Who knows? Maybe that influential American was Jamie Dimon, the celebrated JPMorganChase CEO. He had just received a bonus of $20 million from his Board of Directors. This windfall came after surviving a year in which his firm had been fined more than $20 billion by the U.S. Justice Department for violating criminal laws and banking regulations.

                Sam Pizzigati’s website TOO MUCH ranked Dimon ninth on its 2012 list of the ten greediest American CEOs. Since the housing bubble burst in 2008, Dimon’s earnings have totaled $90 million. His 74% pay raise in January forced a New York Times business editor to compose a long piece justifying Dimon’s record-setting Wall Street bonus. His bank’s salary committee was composed of former CEOs from Exxon Mobil, Johnson & Johnson, and NBC Universal. Who could question the judgment of those capitalist rulers of the universe? They must recognize value when they see it.

                Dimon earned the reputation of being the most outspoken Wall Street critic of the Dodd-Frank Act of 2009 that created new regulations for the financial industry. He was credited with masterminding the lobbying effort in Congress that defanged the hated re-regulatory effort. In other words, Dimon earned every penny of his big bonus by saving the financial industry’s “free market.” And “every penny,” of his bonus was tax deductible for JPMorganChase. That’s because the $20 million was awarded in “performance pay,” a gift to corporations from their friends on the tax writing committees in Congress. There is no limit on how much of a CEO’s “pay for performance” is tax deductible. It falls to the little people who actually pay taxes to make up the governmental cost of Mr. Dimon’s fortunate political friendships.

                If Dimon were a European banker, he would not have been so blessed. The European Union just enacted a new rule which bars bankers from receiving bonuses greater than twice their salary.

                Meanwhile, for “the worst of times” imagine a Congress that cuts food stamps and unemployment benefits during our continuing Great Recession.

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