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For people who were blown away to learn recently that the 11 largest global pharmaceutical companies made an astonishing $711 billion in profits over the last decade, here’s another measure of the industry’s greed: The same companies paid their chief executive officers a combined $1.57 billion in that period. Not bad work if you can get it. They achieved this thanks in part to their systematic exploitation of Medicare and an epidemic of illegal marketing activity.

According to corporate filings analyzed by Health Care for America Now (HCAN), in 2012 the drug companies’ CEOs drew total compensation of $199.2 million, two and a half times the total in 2003. In 2006, the first year of the Medicare prescription drug law, the pay of the CEOs jumped by $58.9 million from the previous year, the largest one-year increase in the decade HCAN reviewed.

Inflated Drug Prices

These huge spikes in pay coincided with eye-popping profits bolstered by a provision the pharmaceutical lobby inserted into the law to prohibit Medicare from using its unparalleled purchasing power to obtain discounts or negotiate prices with drug companies. By prohibiting Medicare to get better drug prices, the federal government is effectively subsidizing the greed of the drug makers and their CEOs. As a result, Americans pay vastly higher prices than people in other countries for identical drugs. This is ludicrous and wasteful. It hurts the government, seniors and middle-class families.

It should not be the official policy of the United States to price-gouge our people and government – a practice that’s especially offensive at a time when some in Washington are talking about cutting Medicare benefits.

Simply empowering Medicare to buy drugs under the same bulk purchasing discounts used by state Medicaid programs would save the federal government billions. For example, the Medicare Drug Savings Act, introduced by Sen. Jay Rockefeller (D-WV), would save $141 billion over the next 10 years without reducing Medicare benefits. Similar measures are in President Obama’s budget proposal and the House Democratic budget plan.

Illegal and Improper Conduct on the Rise

The increases in CEO pay and drug company profits also corresponded with a surge in illegal and improper conduct by the industry. From 2003 to 2012, financial penalties paid by drug manufacturers to settle allegations of illegal marketing, price-gouging of government programs and other violations rose by more than 500 percent, according to a report issued by Public Citizen in September 2012. In 2003, there were only nine settlements with the federal or state governments, amounting to $967 million in penalties. In 2011, federal and state government agencies reached a record 44 settlement agreements with drug makers. And by July 2012, with the year only half over, drug companies had already agreed to pay nearly $6.6 billion as part of 19 settlements with the government. Data on the second half of 2012 have not yet been compiled by Public Citizen.

Here’s the kicker: The most common drug-company violation cited by regulators and law enforcement agencies between 1991 and July 2012 was overcharging government health programs. Really? How much overcharging do they need?

Over the last decade, the drug companies racked up unprecedented penalties for criminal and civil violations. They jacked up prices for seniors and the government. They made excessive profits and gave unconscionable compensation to the CEOs in charge of this all.

End Corporate Tax Giveaways

It is obscene that any lawmakers in Washington — even the most extremist Republicans who hate civilization as we know it — are even talking about cutting benefits for seniors in the midst of what amounts to a drug industry scandal.

We shouldn’t be making any benefit cuts to Medicare, Medicaid, the Affordable Care Act or Social Security. Not now, not ever. Instead, we should make the wealthiest Americans pay their fair share in taxes and eliminate indefensible special-interest tax breaks and subsidies for big corporations like the companies that ship jobs overseas, Big Oil, and a drug industry that has made a science out of ripping off the American people.

* * * * *HCAN’s analysis of CEO pay focused on 11 companies: Johnson & Johnson, Abbott Laboratories, Pfizer, Novartis, Eli Lilly, Roche, Merck, Bristol-Myers Squibb, Sanofi, GlaxoSmithKline and AstraZeneca. Over the 10-year period, the $1.57 billion in total compensation was split among 27 executives. The top earners in 2012 were Johnson & Johnson’s William Weldon, who took in $29.8 million, and Pfizer’s Ian Read, who received $25.6 million. By comparison, the median household income in the U.S. last year was $50,054, while half of all Medicare beneficiaries had less than $22,500 in annual income. Click here for details on Big Pharma’s annual CEO compensation expenditures. In April, HCAN compiled data showing that the 11 drug companies reported $711.4 billion in profits over the same 10-year span.

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Ethan Rome served as deputy campaign manager in HCAN’s 2009 successful campaign to win comprehensive health care reform. He has been a grassroots organizer, political activist, and strategic communicator for progressive issue and electoral campaigns for more than 20 years. From 2002until 2009, Mr. Rome directed public affairs for the 1.6 million-member American Federation of State, County and Municipal Employees (AFSCME). He managed national communications and media relations for International President Gerald W. McEntee and the union’s priority organizing, legislative and political campaigns. Prior to joining AFSCME in 1999, Rome was chief policy and political adviser to the speaker of the Connecticut House.

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Follow Ethan Rome on Twitter: www.twitter.com/@HCAN

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This piece is republished from The Huffington Post.

How much did America’s top execs make last year? The scorekeepers don’t all agree. But that won’t matter if we keep our eyes on the most important figure of all: the pay gap between CEOs and workers.

The new numbers on executive pay have been coming fast and furious the last few weeks. So how are America’s top execs faring these days? Last Wednesday, two business correspondents gave two totally different answers.

CEOs are once again “scoring big pay increases,” journalist Darcy Keith reported. The data, countered analyst Rick Newman, show that shareholder activists now have “more power to rein in bloated executive pay packages.”

Why all this uncertainty about how well top execs are doing? In theory, none of this confusion should exist. By law, after all, U.S. corporations must publicly disclose exactly what they’re paying their top execs.

But exactly how corporations pay their top execs can get tricky. Straight salary — the stuff of standard paychecks — only makes up about 10 percent of typical big-time corporate executive compensation.

Most executive pay today comes as stock-related compensation, as either stock “options” or “restricted” stock. Options give executives the right, down the road, to buy shares of their company stock at today’s share price. If that share price rises, the execs can buy low and sell high. Instant windfall.

“Restricted” stock awards give executives actual shares of stock, not just an option to buy them. Execs do have to wait a few years before they can actually claim these shares. No big deal. The shares will still have value, in future years, even if a company’s share price falls.

But how should we value right now all this share-related compensation? Should CEO pay scorekeepers, in their annual tallies, estimate how much stock awards granted this year will be worth in years to come?

Or should scorekeepers only tally stock-related awards when execs actually profit personally from them, either by “exercising” their options or gaining title to restricted shares that have “vested”?

Different executive pay scorekeepers give different answers. Some estimate the future value. Others wait until execs actually profit personally.

Scorekeepers also keep score on different sets of corporations. USA Today’s new scorecard for 2012 tallies pay at 170 firms, the New York Times at just 100. (more…)

“Morally wrong,” is how United Auto Worker president Bob King described last year’s paygrab by one worker at Ford Motor Co. And this year, that worker has grabbed even more, hauling off a $21-million paycheck.

Alan Mulally is the worker in question. Ford’s CEO, he has now pocketed more than $300 million in his six years as the carmaker’s top employee – a period in which he forced fellow workers to swallow big losses in wages and healthcare benefits. The chief’s gain and their loss means Mulally is rewarding himself with a salary that’s about 360 times the wages of the typical Ford automaker, meaning Alan thinks he is worth 360 times more than the people who actually make the product.

In addition to King, he should ask Peter Drucker about that. Well, he can’t for Drucker died in 2005, but Mulally could read up on what this solid thinker had to say about executive pay. Drucker was (and still is) a world-renowned management guru, author, level-headed social observer, teacher, and expert on the role of corporations in society. (more…)

Costco CEO Craig Jelinek has joined the push to raise the federal minimum wage to $10.10 per hour by saying he supports the Fair Minimum Wage Act of 2013, which would not only raise the current wage from $7.25, but would index the wage to inflation and raise wages for tipped employees, too. Costco already pays its starting employees a wage of $11.50 per hour while maintaining a higher sales volume than competitors such as the Walmart-owned Sam’s Club and ranking in the top 25 of the Fortune 500 in terms of revenue.

Jelinek explained his company’s philosophy in a statement:

“An important reason for the success of Costco’s business model is the attraction and retention of great employees….Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”

Costco’s policies and support for higher wages and benefits for its workforce is supported by scientific research. MIT professor Zeynep Ton found a significant increase in sales as worker salaries were increased. She explained why:

I have studied retail operations for more than 10 years and have found that the presumed trade-off between investment in employees and low prices can be broken. Highly successful retail chains—such as Quik­Trip convenience stores, Mercadona and Trader Joe’s supermarkets, and Costco wholesale clubs—not only invest heavily in store employees but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors. They have demonstrated that, even in the lowest-price segment of retail, bad jobs are not a cost-driven necessity but a choice. And they have proven that the key to breaking the trade-off is a combination of investment in the workforce and operational practices that benefit employees, customers, and the company. (more…)

At this point everyone knows about Fix the Debt. It is a collection of corporate CEOs put together by Peter Peterson, the Wall Street private equity mogul. Ostensibly they want to reduce budget deficits and the national debt, but for some reason their attention always seems focused on cutting Social Security and Medicare. While some in this group will allow for minor tax increases, budget cuts are explicitly a priority, with these two programs firmly in their crosshairs.

Given that the stated goal of this group is to reduce budget deficits, it is worth asking why taxes don’t figure more prominently on their agenda. After all, the United States ranks near the bottom of wealthy countries in its tax take as a share of GDP. It is also worth asking why one tax in particular, a financial transactions tax, never seems to get mentioned in anything the group or its members do.

This omission is striking because so many others in budget debates in the United States and around the world regularly suggest such a tax. There is a long list of highly respected economists who have advocated such taxes, starting with John Maynard Keynes. The list includes many Nobel Prize winners, most notably James Tobin, who wrote several papers arguing for such a tax as a way to both raise revenue and slow speculative trading.

Financial transactions taxes are hardly new. The United Kingdom has had a tax on stock trades in place since 1694. It still imposes a tax of 0.5 percent on trades. Relative to the size of its economy the tax raises the equivalent of $30-40 billion a year in the United States. Many other countries, including India and China, have financial transactions taxes. The United States used to have a tax of 0.04 percent on stock trades until 1966 and still has a very small tax which is used to finance the Securities and Exchange Commission.

In the wake of the financial crisis there has been renewed interest in a financial speculation tax. The European Union recently decided to move ahead with implementing a tax which will first be imposed in 2015 or 2016. There is also considerable interest in the United States. While financial speculation taxes have been included as a funding mechanism in many bills there were two standalone bills introduced in Congress last year. (more…)

Wisconsin, Ohio, Indiana, Michigan — Republicans continue their assault on unions and worker solidarity – and America’s middle class gets mugged.   Corporate profits are at the highest % of GDP on record; worker wages are at the lowest % ever.  And now the CEOs are using their dough and clout in the name of Fix the Debt to demand LOWER taxes for corporations as part of any deficit reduction package.

What kind of an America do they envision?  Take a look at the fastest growing jobs in America.  A server at Mickey Ds would have to work 550 years to make the money earned by its CEO in one year.  Abysmally paid jobs won’t support a family, won’t build a broad middle class.  Taxpayers end up paying for food stamps and health care and tax credits to subsidize the biggest retailers in the world.  The American Dream becomes a big lie.  The middle class  gets crushed.  America gets a Gilded Age politics for an era of Gilded Age inequality.

Take a look at this hall of shame.  Unions gave us the weekend.  Crushing unions is leaving us in misery.  Anyone with a pulse and a wit of sense should be outraged about this — and joining with those fighting what will be the defining civil rights struggle of our time:  the right of workers to join together to negotiate decent wages from rapacious employers.

11. DUNKIN’ BRANDS

CEO Nigel Travis’ total compensation: $2.0 million

Crew member: $7.83 an hour

How long a crew member would have to work to make CEO annual pay: 250,000 hours or 120 years

 

10. PAPA JOHN’S

CEO John Schnatter’s total compensation: $2.7 million.

Average delivery driver salary: $7.19 an hour.

How long a crew member would have to work to make CEO annual pay: 382,000 hours or 184 years.

 

9. DOLLAR GENERAL

CEO Richard Dreiling’s total compensation: $3,832,000.

Average sales associate salary: $7.62 an hour.

How long a crew member would have to work to make CEO annual pay: 503,000 hours or 242 years.

 

8. BEST BUY

CEO Brian Dunn’s total compensation: $7.1 million.

Average sales associate salary: $9.73 an hour.

How long a crew member would have to work to make CEO annual pay: 730,000 hours or 350 years. (more…)

Over the weekend The Daily Kos highlighted a cartoon from Tom the Dancing Bug (cartoonist Rueben Bolling) that responded to Bill O’Reilly’s election night claim that Obama’s win signaled the death of traditional America. According to O’Reilly, “the demographics are changing, it’s not a traditional American anymore.” Bolling wondered what would happen if Barack Hussein Obama traveled back in time to the world of Leave it to Beaver. In this imaginary scenario, Obama tells the Cleavers of his plan to raise the marginal tax rate on the wealthiest Americans, reduce the gap between CEO pay and that of the lowest paid employees, and bolster the social safety net. The “Beave” and his family point out that those features were already in place in their traditional 1960s America. “Golly, mister,” the Beave exclaims, “I think you’re bringing back traditional America.”

I do, too. I am writing a book about how workers and unions were represented in 1950s popular culture.  In Striking Images: Labor Unions on Screen and in the Streets in the 1950s, I argue that workers were represented in popular culture more often, and more positively, than we remember. This is, in part, because union membership was at its highest point in U.S. history (roughly 35% of all US households). Unions were also active, not passive. There were more than 30,000 strikes over the course of the 1950s.  In other words, union membership was traditional.

For example, in 1965 Eisenhower, declared that “the protection of the right of workers to organize into unions and to bargain collectively is the firm and permanent policy of the Eisenhower Administration.” Rachel Maddow once quipped about Eisenhower’s relatively liberal policies that she was “in almost total agreement with the Eisenhower-era Republican party platform.”

As we return to a more traditional America, how are ordinary workers being represented in popular culture? This is a question we often ask on this blog, and we make our share of withering critiques, as Susan Ryan did when she addressed the phenomenon of “extreme work” reality television and how workers are being exploited in front of and behind the camera.

But there are some other more positive, and possibly even authentic ways in which workers are being represented in popular culture. Here’s a quick run down:

Striking workers are back in the news. Thanks to the massive (and largely successful) Chicago teacher’s strike and a well-organized blitz of Black Friday job actions at Walmarts across the country, the mainstream media has been covering strikes with more sympathy than in years past. Do a search for “Black Friday” and “workers” and more than 2 million hits pop up. While some of the coverage of Black Friday’s job actions underplayed the overall impact of the Walmart actions, other headlines suggested the range and the power of the strikes which took place in more than 100 cities in 46 states. (more…)

That variant on the NRA’s famous slogan came to mind last week with the phenomenal victory mountaintop mining removal opponents and community groups achieved in a court settlement: Patriot Mining, previously one of Appalachia’s biggest mountaintop removal mining companies, not only agreed to end the practice forever, but acknowledged its community and environmental costs.

Patriot Coal has concluded that the continuation or expansion of surface mining, particularly large scale surface mining of the type common in central Appalachia, is not in its long term interests … We believe the proposed settlement will result in a reduction of our environmental footprint.

This settlement is one of the biggest steps yet in the decade’s long struggle to end the devastation of Appalachia by poorly regulated and often illegal mining practices that destroy mountains, fill streambeds, and threaten schools and homes.

It’s wonderful. But it reminds us that problems afflicting the coal industry are the direct result of the historic attitudes of its operators — not actually the resource itself, or the men, women and communities who produce and rely upon it. And Patriot came to its senses only after entering bankruptcy. Not all coal operators are looking at their practices with a fresh eye.

Indeed, in the wake of the election two weeks ago another coal operator. Robert Murray, the CEO of Murray Energy, promptly laid off 156 of his workers, promised to lay more off later, and accompanied this decision with a stunning prayer, which equated the election results with the end of the American coal industry and indeed, the end of the idea of America itself:

Dear Lord,The American people have made their choice. They have decided that America must change its course, away from the principals of our Founders. And, away from the idea of individual freedom and individual responsibility. Away from capitalism, economic responsibility, and personal acceptance.

We are a Country in favor of redistribution, national weakness and reduced standard of living and lower and lower levels of personal freedom.

My regret, Lord, is that our young people, including those in my own family, never will know what America was like or might have been. They will pay the price in their reduced standard of living and, most especially, reduced freedom.

The takers outvoted the producers.

Murray made a vague reference “allegations from radical Obama supporters that you know are blatantly false” — an apparent reference to charges that he was blackmailing his employees into supporting Mitt Romney by threatening their jobs in advance of the election — a threat, we should note, that was evidently not an idle one. But Murray made no reference whatsoever to an even bigger financial challenge he is facing; paying the $1.1 million fine he agreed to as the penalty for the death of nine of his workers in the 2007 Crandall Mine disaster in Utah. (more…)

The anti-Social Security propagandists should’ve thought this one through a little more carefully: On the same day that Goldman Sach’s CEO issued his “balanced” demand for Social Security and Medicare cuts, the Wall Street-funded group called “Third Way” published the results of a poll which precisely reflected the wishes of Goldman Sach’s CEO.

Coincidence? I report, you decide.

It certainly doesn’t look good when the poll in question contains misleading questions, is deceptively presented, and includes sentences like “Questions 50 to 55 held for future release.” Any remaining shred of credibility disappears in the face of numerous other polls which directly contradicts Third Way’s claims about these results.

Oh, and we almost forgot: Two of that group’s board members worked for that CEO.

Lord Lloyd Speaks

Wall Street’s latest lordly financial fatwa comes from notorious con artist and bailout king Lloyd Blankfein. Under Blankfein’s leadership Goldman Sachs has fraudulently deceived a wide range of investors, including pension and retirement funds for many of the very same Americans who would face even more financial hardship in their senior years if Blankfein’s orders are followed by our elected leaders.

Blankfein’s comments followed the anti-social contract movement’s inaccurate and misleading script to the letter:

“Social Security wasn’t designed to … support a 30-year retirement after a 25 year career,” said Blankfein. This is a variation on the “we’re living longer” argument that’s been debunked dozens of times. Americans who lived to the age of 65 are only living a little bit longer — and the ones living the longest are the wealthiest among us, not the ones who rely on Social Security.

Blankfein’s prescriptions come straight from the script, too: “The retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised.”

Well, gosh. By uncanny coincidence, that just happens to be exactly the kind of policy package proposed by Third Way … and by the billionaire-funded individuals named Simpson and Bowles, who issued a personal proposal after failing to get one out of their Presidential commission … and by the billionaire-funded Rivlin/Domenici group …

And it happens to be exactly the kind of package which Third Way’s outlier poll says Obama voters want to see.

Are we getting the picture yet?

Balancing Act

The Wall Street austerity script now calls for an illusory gloss of “balance,” which is to be provided by adding a little “revenue” to these enormous cuts. That’s the word of the day — “revenue” — instead of “tax increases.” The word “revenue” is used because the plan is to collect most of it from the middle class by eliminating tax deductions that it uses regularly.

“In the long run,” says Blankfein, “there has to be more revenue.” See what he did right there? In the “long run” — not now. And although he says “the burden of that revenue will be disproportionately taken up by wealthier people,” he doesn’t say how.

On the other hand, he’s very specific about the cuts we need to make to Medicare and Social Security, starting now. Why?

“Because we can’t afford them,” says Blankfein.

Of course, Blankfein had no scruples about “affordability” when it came time to rescue Goldman Sachs in the bank bailout. That took some doing, since Goldman wasn’t a bank. But helpful government executives broke the rules so that it could become a bank — and then receive $10 billion in bailout money from the same taxpayers who would suffer if Blankfein’s social diktat ever became government policy.

The Paymasters vs. the Public

We shouldn’t be surprised that Blankfein’s following the script, of course. He wrote that script — along with Republican billionaire Peter Peterson and all those who fund groups in the anti-Social Security movement, a cohort which includes Third Way and all the other pseudo-”centrist” and “bipartisan” groups.

They’re pseudo-centrist, rather than truly centrist, because the real American majority passionately opposes their ideas. Seventy percent of voters were “uncomfortable” with the Simpson Bowles proposal when it was published. A stunning majority of Americans opposed cutting Social Security for deficit reduction, including 75 percent of registered Republicans and 76 percent of self-described <em>Tea Party</em> members.

One of the latest studies to reaffirm these findings was a Campaign For America’s Future/Democracy Corps poll conducted by Greenberg Quinlan Rosner immediately after the election. That poll showed that all voters — not just Obama voters — wanted the government to emphasize job creation and economic growth over deficit reduction.

The poll also found that voters opposed the Blankfein/Third Way proposal for Social Security cuts by 62 to 31 percent. (more…)

Many people are following the presidential election closely with the idea that the outcome will have a major impact on national policy. However, according to Steven Pearlstein, a veteran Washington Post columnist and reporter, it may not matter who wins the election. In a column last week, Pearlstein told readers that the top executives of some of the country’s largest companies are getting together to craft a budget package that they will try to push through Congress and get the president to sign.

While Pearlstein clearly sees these backroom meetings of corporate chieftains in positive terms (he refers to them as “grown-ups” who have been noticeably absent from the conversation about the budget), the rest of us might view this plotting a bit differently. As Pearlstein openly acknowledges, this corporate coup is an end-run around the electorate. As corrupt as the political process may have become, at least we will get a vote in the election. Pearlstein’s plotters are not inviting the rest of us into the conversation.

Many of the same folks who brought the economy to ruin just a few years ago are now going to come up with a plan that is supposed to set the budget and the economy on a forward path. At the center of their proposal are big cuts in Social Security and Medicare.

The most popular Social Security cut among this gang is a reduction in the annual cost-of-living adjustment (COLA) by 0.3 percentage points. They are betting that ordinary people are too dumb to notice this cut since it is a relatively small amount each year.

However, the effect of this cut accumulates into a much bigger deal over time. After 10 years it is roughly 3 percent, after 20 years it would be close to 6 percent, and after 30 years it would be close to 9 percent.

If we assume that an average retiree collects benefits for 20 years, this implies an average cut in their benefits of 3 percent. Is that a big deal? Well, there are a lot of would-be Social Security cutters who are screaming bloody murder because President Obama wants to increase the tax rate on a portion of their income by a bit more than 3 percentage points. This means that if President Obama’s proposal to increase taxes on the richest 2 percent is a big deal, then the plan to cut the Social Security COLA is also a big deal.

The corporate CEO crew is also considering a plan to raise the normal retirement age for Social Security to 69. And, they want to reduce the benefit formula for high income workers which, incredibly, they define as people who earn more than $40,000 a year.

Their main trick for Medicare is to raise the age of eligibility from 65 to 67. Apparently our CEO gang has not discovered that the health insurance market for older people is a disaster. They also continue to promote the misconception that the problem is Medicare and Medicaid. (more…)