Archive for April, 2003

Executive Pay

Wednesday, April 30th, 2003

In 1999, the average corporate top executive was paid 419 times as much as the average factory worker, up from a ratio of 42-to-1 in 1980. After the dot.com bubble burst, the executive pay bubble burst as well right? Wrong. According to Business Week, the average CEO still made 411 times the average factory worker in 2001.

Had worker pay risen at the same pace as executive pay did in the 1990s, the average production worker would have been making more than $110,000 a year at the end of the decade compared with the $29,000 the worker actually made.

The federal minimum wage would have been around $22.00 an hour, not the current $5.15.

The Institute for Policy Studies (www.ips-dc.org) and the group United for a Fair Economy (www.ufenet.org) said the average annual compensation for a chief executive of a large company was $10.6 million in 1998, a fivefold increase from the $1.8 million of 1990.

How much would you be making if your pay had grown as much as CEO pay has? Between 1980 and 1998, the average pay of regular working people increased 68 percent. In contrast, CEO pay grew a whopping 1,596 percent! According to Business Week, the average CEO of a major corporation made $10.6 million in 1998. If CEO pay continues to grow at that rate over the next 50 years, the average CEO would be paid more than 150,000 times what a typical factory worker would make.

Heres what a minimum wage paycheck would be like today if it had grown at the same rate of increase as an average CEOs? If your 1994 annual pay was $15,000, you would be in luck. Today you would be making an amazing $297,904! These figures were calculated based on 1994-1998 data published in Business Week.

Sources: Business Week, May 6, 2002, Special Report — The Crisis in Corporate Governance, www.businessweek.com; Northwest Labor Press, Chief Executive Officers’ Pay Exploded in 1990s, www.nwlaborpress.org/12-03-99CEO.html.

Globalization

Monday, April 28th, 2003

Oxfam

Trade Report

There is a paradox at the heart of international trade. In the globalised world of the early twenty-first century, trade is one of the most powerful forces linking our lives. It is also a source of unprecedented wealth.

Yet millions of the world’s poorest people are being left behind. Increased prosperity has gone hand in hand with mass poverty and the widening of already obscene inequalities between rich and poor. World trade has the potential to act as a powerful motor for the reduction of poverty, as well as for economic growth, but that potential is being lost.

The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are rigged in favour of the rich. The human costs of unfair trade are immense. If Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income could lift 128 million people out of poverty. Reduced poverty would contribute to improvements in other areas, such as child health and education.

In their rhetoric, governments of rich countries constantly stress their commitment to poverty reduction. Yet the same governments use their trade policy to conduct what amounts to robbery against the world’s poor. When developing countries export to rich country markets, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost them $100bn a year - twice as much
as they receive in aid.

Various polite formulations can be found to describe the behaviour of rich-country governments. But the harsh reality is that their policies are inflicting enormous suffering on the world’s poor. When rich countries lock poor people out of their markets, they close the door to an escape route from poverty.

Lack of market access is not an isolated example of unfair trade rules, or of the double standards of Northern governments. While rich countries keep their markets closed, poor countries have been pressurised by the International Monetary Fund and World Bank to open their markets at breakneck speed, often with damaging consequences for poor communities.

The problem of low and unstable commodity prices, which consigns millions of people to poverty, has not been seriously addressed by the international community. Meanwhile, powerful transnational companies (TNCs) have been left free to engage in investment and employment practices which contribute to poverty and insecurity, unencumbered by anything other than weak voluntary guidelines.

The World Trade Organisation (WTO) is another part of the problem. Many of its rules on intellectual property, investment, and services protect the interests of rich countries and powerful TNCs, while imposing huge costs on developing countries. The WTO’s bias in favour of the self-interest of rich countries and big corporations raises fundamental questions about its legitimacy.

Reform of world trade is only one of the requirements for ending the deep social injustices that pervade globalisation. Action is also needed to extend opportunity, and reduce inequalities in health, education, and income distribution. However, world trade rules are a key part of the poverty problem. Fundamental reforms are needed to make them part of the solution.

George Bush

Radio Address Transcript

For Immediate Release
Office of the Press Secretary
July 20, 2001

Embargoed
Until Delivery
Until 10
06 A.M. Edt
Saturday, July 21, 2001

Radio Address of the President to the Nation

Good Morning. as You Hear This, I AM in Genoa, Italy, at An Important Meeting of the World’s Most Industrialized Nations And Russia. Our Focus This Year Is on the Poor and Struggling Nations of The World and What Prosperous Democracies Can Do to Help Them Build a Better future.

This cause is the priority of the United States’ foreign policy. We’re a wealthy nation with responsibilities to help others. It is also in our best interest to do so, because we benefit when we have strong and stable partners around the world who trade with us and help keep the peace.

Our discussions here in Europe are centered on some great goals. We want to spread the benefits of free trade as far and as wide as possible. Free trade is the only proven path out of poverty for developing nations. And when nations are shut off from the world, their people pay a steep price.

Despite trade’s proven track record for lifting the lives of the poor, some still oppose it. They seek to deny the poor and developing countries their best hope for escaping poverty. Legitimate concerns about labor standards, economic dislocation and the environment should be addressed, and will be.

But the developing countries have no need for protectionist policies that would condemn them to permanent poverty. Yet, trade alone is not enough. Wealthy nations must also work in true partnership with developing countries to help them overcome obstacles to their development, such as illiteracy, disease and unsustainable debt.

This is compassionate conservatism at an international level, and it is the responsibility that comes with freedom and prosperity. To advance literacy in the developing world, I have proposed that the United States increase funding for our international education assistance programs by nearly 20 percent. And we will lead a new effort to improve basic education and teacher training in Africa.

We’ve proposed that the World Bank and other development banks increase the share of their funding devoted to education, and to tie the support more directly to clear measurable results. And we have proposed that up to half of all the funds provided by development banks to the poorest countries be provided as grants rather than loans for education, health and human needs.

Today, many poor nations are benefitting from efforts to relieve them of the crippling burden of massive debt. But debt relief is ultimately a short-term fix. My proposal doesn’t merely drop the debt, it helps stop the debt.

A final item of business at our Genoa summit is to launch a new global fund to combat HIV/AIDS, malaria and tuberculosis. The U.S. contributes nearly $1 billion a year annually to international efforts to combat AIDS and infectious diseases, and we stand ready to contribute more to the global fund as it demonstrates its success.

This is a time of great opportunity. What some call globalization is in fact the triumph of human liberty across national borders. We have today the chance to prove that freedom can work not just in the new world or old world, but in the whole world.

Our great challenge is to include all the world’s poor in an expanding circle of development throughout all the Americas and all of Asia and all of Africa. Such a world will enjoy greater freedom and prosperity, and is far more likely to be at peace.

Thank you for listening.

American Airlines

Friday, April 18th, 2003

Was anybody surprised at the revelation this week that American Airlines’ executives were securing bonuses and pension perks for themselves while at the same time goading employees into giving up $1.8 billion in future wages and benefits. Sadly, this is just the latest example of corporate double dealing. Last week it was Delta, and next week it will be . . .? Following are excerpts from the press, the pilot’s union, and the airline.

New York Newsday

At issue were bonuses promised to chairman and chief executive Donald J. Carty and five other executives — equal to twice their salary — if they stuck around two more years.

Also, the company partially funded supplemental pensions for 45 top officials last year. Executives would still get those pensions even if American winds up in bankruptcy.

The bonuses and pension upgrades were approved last year, but the company delayed disclosing them until after most employees had finished voting on the givebacks. Union leaders were incensed by the timing of the disclosure, saying employees might have rejected the concessions if they knew of the perks.

New York Times

But the unions said yesterday they had no idea that AMR, the parent company of American, had agreed to give compensation packages to executives even as the company was demanding concessions from the unions. The existence of the trust fund for AMR’s top 45 executives, and “cash retention” bonuses for the company’s top six executives of twice their base salaries, were disclosed Tuesday night in AMR’s annual 10-K filing with the Securities and Exchange Commission. American had delayed the filing for two weeks by saying that it was in the middle of labor negotiations.

Allied Pilot’s Association

“As part of its annual report to shareholders, AMR Corp. is required by the Securities and Exchange Commission to file additional, more detailed supporting documents. These documents reveal that the top six executives will be eligible to receive cash retention bonuses of twice their annual salaries, through a so-called ‘Retention Award Agreement,’ if they stay through January 2005. AMR also established a ‘Supplemental Executive Retirement Program’ for its 45 top executives that protects a portion of their retirement income in the event of a bankruptcy filing.

“An article in today’s edition of The Wall Street Journal reports that management ‘briefed union leaders before the voting’ about these new executive perquisites. That is totally erroneous. We found out about these enhancements to executive compensation only after AMR made its year-end financial filing with the SEC.

“As we seek clarification from management about why we were not previously informed of these items, our pilots are justifiably irate at the latest revelations. For that matter, every employee on this property should rightfully question management’s motives and judgment with regard to enhancing executive compensation. After all, the members of all three unions have just agreed to sacrifice a total of $1.62 billion a year for the next six years.

“From the very beginning of our discussions concerning cost savings, we stressed to management that both the sacrifices and the potential future upside must be shared between the employees and management. In light of the debate we had with management at the very end of negotiations concerning equity and upside sharing, we are particularly disturbed to see that both the sacrifices and upside potential appear utterly lopsided. That is unacceptable.

“On April 10 at a meeting in Dallas/Fort Worth with a large group of American Airlines employees, CEO Don Carty stated that ‘Shared sacrifice has to lead to shared success. . .’” Management would be wise to take this statement to heart and consider the ramifications of their decisions during this critical time.”

American Airlines

“These retention agreements were created more than a year ago, immediately after the events of Sept. 11th, when the industry was struggling and our Board of Directors had serious concerns about our ability to retain our senior management,” said Don Carty, American’s chairman and CEO. “The goal was to give senior officers an incentive to stay with the company when many were being offered more generous packages to go elsewhere.”

Another issue of concern among employees was the company’s Supplemental Executive Retirement Plan or SERP. American said its SERP was established in 1985 and, unlike its other employees’ retirement plans, was never funded. This past October, during a cycle in which the company was contributing to employee pension plans, it made an initial payment — the first ever — to the plan, which remains underfunded

American said the initial payment to the SERP remains in place.

Pre-emptive wars

Saturday, April 12th, 2003

It amazes me in looking at the pictures of looting in Iraq how really quickly everything has gone. From Kuwait to Baghdad in three weeks. I don’t think even the military could have expected the end to come as quickly as it did. However, with that said, was the war right? Does the fact that we won make everything all right? I really don’t know. I’m still torn. Michael Kinsley in Slate wrote on Thursday: “Should we be doing this [waging war on Iraq] despite the opposition of most of our traditional allies? Without the approval of the United Nations? Moral questions: Is it justified to make ‘pre-emptive’ war on nations that may threaten us in the future? When do internal human rights, or the lack of them, justify a war? Is there a policy about pre-emption and human rights that we are prepared to apply consistently? Does consistency matter? Even etiquette questions: Before Bush begins trying to create a civil society in Iraq, wouldn’t it be nice if he apologized to Bill Clinton and Al Gore for all the nasty, dismissive things he said about “nation-building” in the 2000 campaign?”

Pre-emptive war is difficult to justify except in the most extreme circumstances. Given the Iraqi government’s quick collapse, I wonder how serious of a threat they posed to the United States. Surely not great enough to warrant an attack without the United Nations’ authorization. Without such international support I don’t think a pre-emptive war can ever be justified. Following the United State’s lead, the world would be left with nations creating their own justifications for war. That’s frightening.

And then there’s the issue of the patriotism of people opposed to the war. Since when has patriotism been defined as an expression of blind loyalty to whatever conquest the current administration is leading our nation into? To me patriotism is an expression of national pride. There is little leading up to our invasion of Iraq that we, as Americans, can be proud of. And how hypocritical can the Republicans be for attacking even the mildest questioning of military strategy or foreign policy related to the war in Iraq?

Republicans set a very high standard for patriotism: if you question the President of the United States while our troops are in danger, then you are not patriotic enough. But how do these same Republicans fare under their own standards?

On March 24, 1999, NATO began a strategic bombing campaign that resulted in the ouster of Slobodan Milosevic, a vicious tyrant currently in jail for his crimes against humanity.

Republicans fail their own “patriotism test.” As our troops faced danger overseas, Republicans were strident in their criticism of President Clinton and his foreign policy, even going as far as criticizing the military campaign itself.

Here’s what two patriotic Republicans had to say in support of our troops fighting in Kosovo. President (then-candidate) George W. Bush: “Bush, in Austin, criticized President Clinton’s administration for not doing enough to enunciate a goal for the Kosovo military action and indicated the bombing campaign might not be a tough enough response. ‘Victory means exit strategy, and it’s important for the president to explain to us what the exit strategy is,’ Bush said.” [Houston Chronicle, 4/9/99]

Senator Richard Lugar: “This is President Clinton’s war, and when he falls flat on his face, that’s his problem.” [New York Times, 5/4/99].

Senator Lugar was wrong. When foreign policy fails, it’s everyone’s problem. Will America be any safer after winning a war against Iraq, or are we creating more disillusioned Arabs willing to die to express their hatred of the United States?

Baghdad falls

Wednesday, April 9th, 2003

Great pictures from Iraq today of citizens trampling Saddam Hussein’s fallen statue. It makes me wonder how those images will be accepted in the Middle East. Hopefully the generally positive reaction of Iraqis towards the US occupation of Baghdad will help defuse the international tensions that arose as a result of the US invasion. My fingers are crossed.

I switched to WazooWeb for my webhosting. So far I’ve been impressed with the feature set and flexibility of their services (the price is pretty good too!). Thanks to the fact that my domain was register with Register.com, I was able to take the domain name with me from Tripod (despite what their website says).

Hopefully I’ll be done for awhile with the website setup and can focus on content for a change.

American Empire

Wednesday, April 2nd, 2003

The Atlanta Journal-Constitution: 9/29/02

The President’s Real Goal in Iraq

By JAY BOOKMAN (Bookman is the deputy editorial page editor of The Atlanta Journal-Constitution)

The official story on Iraq has never made sense. The connection that the Bush administration has tried to draw between Iraq and al-Qaida has always seemed contrived and artificial. In fact, it was hard to believe that smart people in the Bush administration would start a major war based on such flimsy evidence. The pieces just didn’t fit. Something else had to be going on; something was missing.

In recent days, those missing pieces have finally begun to fall into place. As it turns out, this is not really about Iraq. It is not about weapons of mass destruction, or terrorism, or Saddam, or U.N. resolutions.

This war, should it come, is intended to mark the official emergence of the United States as a full-fledged global empire, seizing sole responsibility and authority as planetary policeman. It would be the culmination of a plan 10 years or more in the making, carried out by those who believe the United States must seize the opportunity for global domination, even if it means becoming the “American imperialists” that our enemies always claimed we were.

Once that is understood, other mysteries solve themselves. For example, why does the administration seem unconcerned about an exit strategy from Iraq once Saddam is toppled?

Because we won’t be leaving. Having conquered Iraq, the United States will create permanent military bases in that country from which to dominate the Middle East, including neighboring Iran.

In an interview Friday, Defense Secretary Donald Rumsfeld brushed aside that suggestion, noting that the United States does not covet other nations’ territory. That may be true, but 57 years after World War II ended, we still have major bases in Germany and Japan. We will do the same in Iraq.

And why has the administration dismissed the option of containing and deterring Iraq, as we had the Soviet Union for 45 years? Because even if it worked, containment and deterrence would not allow the expansion of American power. Besides, they are beneath us as an empire. Rome did not stoop to containment; it conquered. And so should we.

Among the architects of this would-be American Empire are a group of brilliant and powerful people who now hold key positions in the Bush administration: They envision the creation and enforcement of what they call a worldwide “Pax Americana,” or American peace. But so far, the American people have not appreciated the true extent of that ambition.

Part of it’s laid out in the National Security Strategy, a document in which each administration outlines its approach to defending the country. The Bush administration plan, released Sept. 20, marks a significant departure from previous approaches, a change that it attributes largely to the attacks of Sept. 11.

To address the terrorism threat, the president’s report lays out a newly aggressive military and foreign policy, embracing pre-emptive attack against perceived enemies. It speaks in blunt terms of what it calls “American internationalism,” of ignoring international opinion if that suits U.S. interests. “The best defense is a good offense,” the document asserts.

It dismisses deterrence as a Cold War relic and instead talks of “convincing or compelling states to accept their sovereign responsibilities.”

In essence, it lays out a plan for permanent U.S. military and economic domination of every region on the globe, unfettered by international treaty or concern. And to make that plan a reality, it envisions a stark expansion of our global military presence.

“The United States will require bases and stations within and beyond Western Europe and Northeast Asia,” the document warns, “as well as temporary access arrangements for the long-distance deployment of U.S. troops.”

The report’s repeated references to terrorism are misleading, however, because the approach of the new National Security Strategy was clearly not inspired by the events of Sept. 11. They can be found in much the same language in a report issued in September 2000 by the Project for the New American Century, a group of conservative interventionists outraged by the thought that the United States might be forfeiting its chance at a global empire.

“At no time in history has the international security order been as conducive to American interests and ideals,” the report said. stated two years ago. “The challenge of this coming century is to preserve and enhance this ‘American peace.’ ”

Familiar themes

Overall, that 2000 report reads like a blueprint for current Bush defense policy. Most of what it advocates, the Bush administration has tried to accomplish. For example, the project report urged the repudiation of the anti-ballistic missile treaty and a commitment to a global missile defense system. The administration has taken that course.

It recommended that to project sufficient power worldwide to enforce Pax Americana, the United States would have to increase defense spending from 3 percent of gross domestic product to as much as 3.8 percent. For next year, the Bush administration has requested a defense budget of $379 billion, almost exactly 3.8 percent of GDP.

It advocates the “transformation” of the U.S. military to meet its expanded obligations, including the cancellation of such outmoded defense programs as the Crusader artillery system. That’s exactly the message being preached by Rumsfeld and others.

It urges the development of small nuclear warheads “required in targeting the very deep, underground hardened bunkers that are being built by many of our potential adversaries.” This year the GOP-led U.S. House gave the Pentagon the green light to develop such a weapon, called the Robust Nuclear Earth Penetrator, while the Senate has so far balked.

That close tracking of recommendation with current policy is hardly surprising, given the current positions of the people who contributed to the 2000 report.
Paul Wolfowitz is now deputy defense secretary. John Bolton is undersecretary of state. Stephen Cambone is head of the Pentagon’s Office of Program, Analysis and Evaluation. Eliot Cohen and Devon Cross are members of the Defense Policy Board, which advises Rumsfeld. I. Lewis Libby is chief of staff to Vice President Dick Cheney. Dov Zakheim is comptroller for the Defense Department.

‘Constabulary duties’

Because they were still just private citizens in 2000, the authors of the project report could be more frank and less diplomatic than they were in drafting the National Security Strategy. Back in 2000, they clearly identified Iran, Iraq and North Korea as primary short-term targets, well before President Bush tagged them as the Axis of Evil. In their report, they criticize the fact that in war planning against North Korea and Iraq, “past Pentagon wargames have given little or no consideration to the force requirements necessary not only to defeat an attack but to remove these regimes from power.”

To preserve the Pax Americana, the report says U.S. forces will be required to perform “constabulary duties” — the United States acting as policeman of the world — and says that such actions “demand American political leadership rather than that of the United Nations.”

To meet those responsibilities, and to ensure that no country dares to challenge the United States, the report advocates a much larger military presence spread over more of the globe, in addition to the roughly 130 nations in which U.S. troops are already deployed.

More specifically, they argue that we need permanent military bases in the Middle East, in Southeast Europe, in Latin America and in Southeast Asia, where no such bases now exist. That helps to explain another of the mysteries of our post-Sept. 11 reaction, in which the Bush administration rushed to install U.S. troops in Georgia and the Philippines, as well as our eagerness to send military advisers to assist in the civil war in Colombia.

The 2000 report directly acknowledges its debt to a still earlier document, drafted in 1992 by the Defense Department. That document had also envisioned the United States as a colossus astride the world, imposing its will and keeping world peace through military and economic power. When leaked in final draft form, however, the proposal drew so much criticism that it was hastily withdrawn and repudiated by the first President Bush.

Effect on allies

The defense secretary in 1992 was Richard Cheney; the document was drafted by Wolfowitz, who at the time was defense undersecretary for policy.

The potential implications of a Pax Americana are immense.

One is the effect on our allies. Once we assert the unilateral right to act as the world’s policeman, our allies will quickly recede into the background. Eventually, we will be forced to spend American wealth and American blood protecting the peace while other nations redirect their wealth to such things as health care for their citizenry.

Donald Kagan, a professor of classical Greek history at Yale and an influential advocate of a more aggressive foreign policy — he served as co-chairman of the 2000 New Century project — acknowledges that likelihood.

“If [our allies] want a free ride, and they probably will, we can’t stop that,” he says. But he also argues that the United States, given its unique position, has no choice but to act anyway.

“You saw the movie ‘High Noon’? he asks. “We’re Gary Cooper.”

Accepting the Cooper role would be an historic change in who we are as a nation, and in how we operate in the international arena. Candidate Bush certainly did not campaign on such a change. It is not something that he or others have dared to discuss honestly with the American people. To the contrary, in his foreign policy debate with Al Gore, Bush pointedly advocated a more humble foreign policy, a position calculated to appeal to voters leery of military intervention.

For the same reason, Kagan and others shy away from terms such as empire, understanding its connotations. But they also argue that it would be naive and dangerous to reject the role that history has thrust upon us. Kagan, for example, willingly embraces the idea that the United States would establish permanent military bases in a post-war Iraq.

“I think that’s highly possible,” he says. “We will probably need a major concentration of forces in the Middle East over a long period of time. That will come at a price, but think of the price of not having it. When we have economic problems, it’s been caused by disruptions in our oil supply. If we have a force in Iraq, there will be no disruption in oil supplies.”

Costly global commitment

Rumsfeld and Kagan believe that a successful war against Iraq will produce other benefits, such as serving an object lesson for nations such as Iran and Syria. Rumsfeld, as befits his sensitive position, puts it rather gently. If a regime change were to take place in Iraq, other nations pursuing weapons of mass destruction “would get the message that having them . . . is attracting attention that is not favorable and is not helpful,” he says.

Kagan is more blunt.

“People worry a lot about how the Arab street is going to react,” he notes. “Well, I see that the Arab street has gotten very, very quiet since we started blowing things up.”
The cost of such a global commitment would be enormous. In 2000, we spent $281 billion on our military, which was more than the next 11 nations combined. By 2003, our expenditures will have risen to $378 billion. In other words, the increase in our defense budget from 1999-2003 will be more than the total amount spent annually by China, our next largest competitor.

The lure of empire is ancient and powerful, and over the millennia it has driven men to commit terrible crimes on its behalf. But with the end of the Cold War and the disappearance of the Soviet Union, a global empire was essentially laid at the feet of the United States. To the chagrin of some, we did not seize it at the time, in large part because the American people have never been comfortable with themselves as a New Rome.

Now, more than a decade later, the events of Sept. 11 have given those advocates of empire a new opportunity to press their case with a new president. So in debating whether to invade Iraq, we are really debating the role that the United States will play in the years and decades to come.

Are peace and security best achieved by seeking strong alliances and international consensus, led by the United States? Or is it necessary to take a more unilateral approach, accepting and enhancing the global dominance that, according to some, history has thrust upon us?

If we do decide to seize empire, we should make that decision knowingly, as a democracy. The price of maintaining an empire is always high. Kagan and others argue that the price of rejecting it would be higher still.

That’s what this is about.