They’ll stone you when you’re at the breakfast table.
They’ll stone you when you are young and able.
They’ll stone you when you’re tryin’ to make a buck.
They’ll stone you and then they’ll say good luck.
—Bob Dylan, from “Rainy Day Women #12 and 35”
There comes a time in the history of a nation when extreme inequality turns into pillage. If economic power is concentrated so is political power, and the wealthy are able to do whatever they damn well please. They can lie, cheat, and steal because they know they won’t be held to account.
Have the super-rich now taken control of our political and economic systems? Some current news makes me worry.
Let’s start with the food industry, the food cartel that includes General Mills, PepsiCo, and Tyson, which has been jacking up prices non-stop since 2020. Why are food prices up 25% since then?
These giants blame supply chains, the rising costs of labor, and the rising prices of other inputs required to produce and distribute their products. It’s not their fault, they say. But the real culprit, upon closer examination, is stock buybacks, another word for stock manipulation. These firms are fleecing shoppers by raising prices and then using the cash to buy back their own stocks, thereby increasing the market value of each share. Stock buybacks do not increase the value of a company, but they move money effortlessly to the largest Wall Street shareowners and to a company’s top executives, who receive most of their compensation via stock incentives.
As food prices shot up by 25%, “the 10 largest grocery and restaurant brands have together returned or pledged to return more than $77 billion to shareholders,” reports Veronica Riccobene in her excellent article “Big Food, Big Profits, Big Lies.”
In related news, California fast-good giants have claimed that the state’s 2023 minimum wage law, which raised wages from $16 to $20 per hour, killed 10,000 jobs. A closer look, picked up by the Los Angeles Times, showed that the industry cooked the numbers by comparing employment in September with December. But every year, September is within the peak dining out season, and in December people dine out least. When adjusted for seasonal variation or compared with the employment levels exactly one year earlier (both standard ways of measuring employment levels) the number of jobs actually increased by 7,000 after the minimum wage law was enacted.
Boeing recently crashed into the news again, when company CEO Dave Calhoun was roasted by a couple of congressional committees about its shoddy production processes. There were plenty of outraged performances, but none of the oh-so-self-righteous lawmakers had the cajónes to ask about the impact on safety of Boeing’s $61 billion in stock buybacks or about how about Calhoun hauled in $30 million in stock incentives while Boeing lost $1.6 billion in 2023. Is it possible that maybe, just maybe, Boeing financed those buybacks by laying off workers, moving work to lower-wage sub-contractors, and cutting safety corners? Radio silence from Congress. (See “Did Stock Buybacks Knock the Bolts Out of Boeing?”)
Then there’s the way Wall Street squeezes out new home buyers by gobbling up houses and turning them into rentals. (See “Wall Street to Working-Class Homebuyers: Fuggeddaboutdit!”)
Let’s not forget that John Deere recently announced moving jobs from the U.S. to Mexico while feasting on government contracts and, of course, using job cuts to finance stock buybacks.
Do we have to even mention how Big Pharma is charging us more than it does Canadians, or how health insurance companies collude to fix prices, or how giant hospital chains over-charge us with impunity?
They rip us off to feed their profits, which then gets shipped to the richest of the rich via stock buybacks. Of the $3 trillion in after tax U.S. corporate profits in 2022, about $1.31 trillion went to stock buybacks. In 1980 there were 13 US billionaires. Now there are 748.
None of this is accidental. Stock buybacks were deregulated in 1982. That’s when Wall Street began its financial war on workers and got filthy rich. (See my new book for the gory details.)
Just hearing that phrase makes me nauseous because it’s a stark reminder of how feeble we are. Progressives have been complaining about government giveaways to large corporations at least since the 1970s and the practice has only grown worse.
I’ll bet you already know how bad it is. We taxpayers give the oil industry about $20 billion a year in subsidies while BP, Shell, Chevron, Exxon Mobile and TotalEnergies plow $104 billion in dividends and stock buybacks into the pockets of their shareholders (2022). Wall Street may be getting as much as $800 million a day via the Federal Reserve, according to one report. I have yet to find a credible source that adds it all up. I’m guessing it’s well over a trillion dollars a year in direct subsidies, tax breaks, and financial market supports. To rub it in, the richest corporations have successfully lobbied for so many tax loopholes that they pay little or nothing at all.
“But wait,” they tell us, “Tax cuts and subsidies create jobs.”
That’s the biggest and most painful lie of all. Since the deregulation of Wall Street, corporations have been on a job killing spree. Stock buybacks are financed with job cuts. More than 30 million of us have suffered through mass layoffs (defined as 50 or more workers let go at one time) since 1996. Kill the jobs, save some money, buy back your stocks, put the money in your pocket, rinse and repeat.
We’re nowhere near any kind of organized mass uprising. But American workers are not stupid. They may not be able to spell out in detail how they are getting ripped off, but they know it’s happening. Most importantly, they understand that the government works for the rich and not for them. That’s why so many are willing to support train-wrecking outsiders who attack the government, even when they are anti-worker billionaire buffoons. In 1964, 77% of Americans had trust in the federal government. Now it’s 16%.
We’re living with the results of the collapse of countervailing working-class power. In 1955, 35% of the private sector workers were in labor unions. Today it’s only 6%. That means there is no organized mass of working-class folks with enough power to stop corporate looting.
I hate to be alarmist, but we’re really in bad shape and it is likely to get worse. Power is so tilted towards the rich that more and more people are giving up on politics, leaving the field open to the modern-day robber barons. This corrupt environment is a petri dish for conspiracy theories and hate.
Somehow, somewhere, a new working-class movement has to emerge. I’ve been begging progressive labor leaders to start a new organization that would fight against mass layoffs and for workers who are not in unions. (How about Workers United for Justice?)
While labor unions must organize shop by shop, they should also acknowledge that labor law is so tilted against workers, that it will be very difficult to make major inroads into the 94 percent with no union protection. We need a new parallel path to connect with these workers that doesn’t involve years and years of costly combat within a rigged labor law system.
Victims of mass layoffs are everywhere. They need a voice. They need an organization that will fight for them. If leaders like Shawn Fain of the United Auto Workers (UAW) and Sara Nelson from the Association of Flight Attendants-CWA (AFA) reached out to non-union workers who are getting crushed by Wall Street stock buybacks, those workers just might come running.
Until we rebuild large scale working-class power, it’s going to be a very rough ride. If we have learned anything at all since 1980, it’s that greed begets greed. The super-rich always want more and they’re not shy about grabbing it, even if democracy crumbles all around them—and us.
Les Leopold is the executive director of the Labor Institute and author of “Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It.” Read more of his work at substack.com/ @lesleopold1.
From The Progressive Populist, August 1, 2024
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