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By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future

Will California Attorney General Kamala Harris hang tough in her new lawsuit against JPMorgan Chase, the first to target individual bankers accused of defrauding the public? If so, it would be the first time in five years that executives at a major bank have personally paid a price for their misdeeds.

Weekend at Jamie’s

Recent revelations have shown the world that JPMorgan Chase comes as close as any institution in America to embodying all this is corrupt, contemptible, and criminal about today’s megabanks.  This is gratifying, at least on a personal level, since that was not a popular position when we first started writing about JPM and CEO Jamie Dimon a few years back. In those days Dimon was held up as the “good banker” by the president and the press. His institution was considered well-managed and ethical by some of the more shallow members of the popular press, despite the plethora of scandals and crimes like the Alabama bribery case.

Since then we’ve had a variety of Chase revelations: the “Burger King kids” details behind its massive foreclosure fraud; its confessed criminal mistreatment of active duty military personnel; its deeds in fraudulently propping up a failed mortgage lender (it was like a financial Weekend at Bernie’s); and (speaking of “Bernies”) its negligence (at best) in the handling of the fraudulent Madoff accounts, which should have triggered all sorts of red-flag warnings.

Now there’s the London Whale scandal and what appears to be a subsequent case of investor deception.

The bank wound up paying a staggering $16 billion in fines and settlements over a four-year period, more than 12 percent of its net income during that time.

The Scandal of Our Time

An ethically healthy society would never have lionized a CEO like Jamie Dimon or an institution like JPMorgan Chase. That’s why we’ve called it “the scandal of our time.” What explains Dimon’s inability to stem the lawbreaking and correct his organization’s broken ethical system? The most generous interpretation is that he’s an incompetent manager — so incompetent that, even after numerous suits, revelations, and settlements, “Jamie didn’t know” about all the illegal and unethical behavior that continued unabated in his institution.

Needless to say, there are more plausible explanations. (more…)

Mike Lux
Co-founder and CEO, Progressive Strategies

In a speech recently, the influential economist Jeffrey Sachs made the following statement, one that was both remarkable and yet predictable about the culture of Wall Street:

I’m going to put if very bluntly. I regard the moral environment as pathological…these people are out to make billions of dollars and nothing should stop them from that. They have no responsibility to pay taxes. They have no responsibility to their clients… to counter-parties in transactions.

They are tough greedy aggressive and feel absolutely out of control…and they have gamed the system to a remarkable extent. And they have a docile President, a docile White House, and a docile regulatory system that can’t find its voice. Its terrified of these banks. If you look at the campaign contributions the financial markets are the #1 campaign contributors in the US now.

We have a corrupt politics to the core… and both parties are up to their necks in this. The corruption is as far as I can see everywhere. But what it’s led to is this sense of impunity that is really stunning… and it very unhealthy. I have waited four, five years now to see one figure on Wall St. speak in a moral language and I’ve not seen it once.

And if they won’t I’ve waited for a judge, a President, for somebody and it hasn’t happened, and by the way, it’s not gonna happen any time soon.

It was predictable because in fact any neutral observer who knows anything about the way the big banks on Wall Street work has been saying it for years. But it was remarkable because Sachs is a tried and true member of the American establishment, a widely acclaimed Ivy League professor and New York Times best-selling author, and not exactly a raving populist in his economic or political views. But even the elites are now acknowledging the utter moral bankruptcy of our financial kingpins. (more…)

By Jim Hightower
Author, Commentator, America’s Number One Populist

We just had a presidential election in which an admitted tax dodger advocated lower taxes on corporations and speculators like him – and voters rejected that idea and him. Also, polls show that about seven out of 10 Americans think corporations should pay more in taxes than they do now, and that loopholes allowing corporations to dodge their taxes should be plugged, pronto.

Yet, a tiny percentage of Americans – the CEOs of huge multinational corporations – are demanding that Congress do the exact opposite of what the people clearly want them to do and instead, enact those special corporate tax breaks that last year’s presidential loser pushed. Whose side is your member of Congress on?

You’d better check, because the corporate powers are pushing furiously for a deceptive gimmick called the “territorial tax.” It declares that the profits of U.S. corporations can be taxed only by the territories in which they’re banked. (more…)

By Sam Pizzigati
Editor, Too Much online magazine

All across Corporate America, top execs are feathering their own nests at the expense of their workers. The French have a better idea.

The founder of modern management science, Peter Drucker, considered excessive executive pay an assault on good enterprise management practice.

Peter Drucker, the analyst who founded modern management science, died in 2005 at age 95. At his death, business leaders worldwide hailed this Austrian-born American for his enormous contribution to enterprise efficiency.

But Peter Drucker also cared deeply about enterprise morality. In his later years, he watched — and despaired — as downsizing became an accepted corporate gameplan for pumping up executive paychecks. Drucker could find “no justification” for letting CEOs benefit financially from worker layoffs.

“This is morally and socially,” he would write, “unforgivable.”

If Drucker were still writing today, he’d likely be even more unforgiving. CEOs these days aren’t just slashing worker jobs to add on to their own rewards. They’re slashing worker pay as well — and no CEO may be benefiting more from shrinking paychecks than Ford chief executive Alan Mulally.

Mulally has restored Ford to profitability, his many business and political admirers never tire of pointing out, without having to take any taxpayer bailout. But Mulally has indeed enjoyed a hefty bailout — from his workers.

Entry-level workers at Ford used to make $28 an hour. That rate fell by half when the auto industry financial crunch first hit five years ago and now sits a bit above $19. And since the crunch all Ford workers, not just entry-level workers, have given up cost-of-living wage adjustments and health benefits.

Auto industry execs have declared these worker concessions as absolutely necessary. Without lower compensation for auto workers, the argument goes, the auto industry would never become “globally competitive.” This same reasoning apparently doesn’t apply to compensation for Ford CEO Mulally. (more…)

Edwin D. Hill
International President, International Brotherhood of Electrical Workers

Speaker of the House John Boehner and his party’s followers claim that if the Senate and the nation-at-large supported their policies, businesses would flourish and unemployed Americans would be headed back to work.

But over the past few weeks, those same policies have been strongly rebuked by a highly-respected lifelong Republican and a businessman celebrated for his profitable entrepreneurship.

Meet Sheila Bair, who served for five years as chairwoman of the Federal Deposit Insurance Corporation, and Craig Jelinek, the CEO of Costco Wholesaler, one of the country’s top warehouse retailers, boasting a bigger market share than Sam’s Club.

Bair describes herself as “a capitalist and a lifelong Republican.” In an op-ed published in The New York Times, she slams Republican leaders for supporting policies that “[skew] income toward the upper, upper class.” That “hurts our economy,” she says, “because the rich tend to sit on their money — unlike lower-and middle-income people, who spend a large share of their paychecks, and hence stimulate economic activity.”

But Bair doesn’t just take shots at her fellow party members. She proposes solutions to rebuild the U.S. economy that make common sense. She dares to talk about taxes. But she doesn’t just mindlessly mimic the Tea Party’s call to cut all taxes, leaving worthwhile programs starving.

“It’s time to end the practice of taxing income made by wealthy investors in the stock market at a lower rate than income generated by work,” Bair says. “Republicans should put fundamental tax reform on the table and make it our priority to end preferential treatment of investment income, which lets managers of hedge funds pay half the tax rate of managers of shoe stores.”

Wouldn’t it be better, Bair asks, for the Federal Reserve, instead of putting more “cheap money” into banks and the financial sector, to finance construction projects to rebuild the nation’s transportation and energy infrastructure? “From Lincoln’s transcontinental railroad to Eisenhower’s highway system, Republicans have understood that investing in critical infrastructure projects creates jobs and expands commerce,” she says.

In 2009, Sheila Bair was named by Forbes magazine as the second most powerful woman in the world after Chancellor Angela Merkel of Germany. (more…)

Jackie Tortora
AFL-CIO Blog/Social Media Manager

While media pundits raise faux concern every time the Social Security trustees release their annual report, falsely declaring the program is in dire trouble—even though the future modest funding shortfall can easily be fixed by scrapping the cap—it’s important we take a look at a major factor in Social Security’s finances: rich people.

We’ve all heard the stats and we know the rich are getting richer. The working and middle class are more productive than ever, yet are getting a smaller and smaller slice of the pie. This is known as an upward distribution of income. Co-director of Center for Economic and Policy Research (CEPR) Dean Baker wrote last week that the unprecedented upward distribution of income to the already rich over the past three decades has caused a conundrum for Social Security’s finances.

Many people don’t realize that Social Security taxes are capped. This year, workers only pay the Social Security FICA tax, up to $113,700 of what they make. Meaning, millionaires and billionaires are only paying a tiny portion of their income to Social Security taxes. In 1983, the Greenspan Commission made changes to address an immediate Social Security solvency problem. One of these changes included the FICA tax cap that would cover 90% of income. But, because the wealthy are making bank, that cap only covers about 83.2% of what the wealthiest people are making.  (more…)

Kenneth Quinnell
AFL-CIO

The AFL-CIO has long called for an end to tax subsidies for companies that ship jobs overseas. Now, in a new report, Citizens for Tax Justice shows just how much money these loopholes are costing us. The new report finds that U.S. multinational corporations are engaging in a massive amount of tax avoidance, particularly through tax havens in small countries like Bermuda. The corporations report that they “earned” large portions of their profits in tiny, low-tax countries in order to lower their tax rates, despite not having much, if any, actual activity or profit in those countries. Bermuda, for instance, is home to reported profits by American companies that are 1,000% of the country’s actual GDP.

Often a corporation will have little more than a mailbox in the small, low-tax country, while having massive operations and workforces in the United States. The amount of revenue lost in the United States is significant, according to the report:

In 2008, American multinational companies reported earning 43% of their $940 billion in overseas profits in the five little tax-haven countries, even though only four percent of their foreign workforce and seven percent of their foreign investments were in these countries. (more…)

By Jim Hightower
Author, Commentator, America’s Number One Populist

If you are sensitive to stories of human suffering and economic hardship, let me warn you that the following report contains materials that could be upsetting, so discretion is advised.

It’s about a fellow named Jamie. He lives in New York, and he had a very rough go in 2012 with a large financial institution – and, as you can imagine, such behemoths can he heartless, so it’s tough to stand up to them. The giant in this case is JPMorgan Chase, Wall Street’s biggest bank, and it went after poor Jamie Dimon hard. In the end, the bank took more than half of his income.

It was bitterly painful, but thanks to the human spirit, Jamie’s story turned from sad to uplifting! He was down, but not out – because, luckily, JPMorgan is his bank. Yes, he’s the CEO, and even having his previous year’s income slashed by 53 percent, he will still take home $11.5 million in pay for his labors last year. Plus, he keeps his job.

It’s a miraculous ending, considering that one of the bank’s exotic trading divisions under Jamie’s CEOship lost a whopping $6.2 billion last year, due to finagling, incompetence, or both – federal authorities are still investigating. Yet, the board of directors didn’t can Dimon because, as it explained to regulators, he had “accepted responsibility” for the management failures that let to the stunning losses. (more…)

Jackie Tortora
AFL-CIO Blog/Social Media Manager

As if we didn’t already have enough on our plates (having to fend off attacks from the “Fix the Debt” CEOs), now there’s another group of CEOs, the Business Roundtable, telling us we need to “modernize,” a.k.a. cut, Social Security and Medicare benefits by raising the eligibility ages and reducing cost-of-living adjustments (COLAs). How helpful.

R.J. Eskow took on the Business Roundtable in his latest blog, How Extreme Is the Business Roundtable? Check Out Its Attack on the Elderly.

Yesterday, Gary Loveman, CEO of Caesars Entertainment Corp. and head of the Roundtable’s “health and retirement committee,” told Politico that “[a]ny effort to address the country’s fiscal problems has to have as a centerpiece reform of its principal entitlement programs.”

Added Loveman: “None of us [CEOs]—very few of us—are ideologically driven. We’re pragmatists….”

“I am encouraged by how relatively easy these remedies really are,” said Loveman. “… (and) they have a tremendously sanguine effect on the government’s fiscal health.”

That’s true. It is pretty easy. Just kick in a few rich people’s doors, seize their belongings…oh, wait. That’s the other extremist scenario. Loveman’s is the one where people who have paid for Social Security and Medicare coverage throughout their working lives must give some of their benefits up—for him and his friends. (more…)

Last week, a Wendy’s franchise in Omaha, Neb., became the latest member of the fast food industry to announce that the costs of complying with the Affordable Care Act were forcing it to slash the hours of hundreds of its employees.

Even before Obamacare, however, fast food corporations kept much of their workforce at part-time status as a means of minimizing labor costs and maximizing profits. 

The Omaha Wendy’s joins Applebee’s and Taco Bell franchises as well as Papa John’s CEO John Schnatter in claiming Obamacare will likely force them to cut hours.

In the meantime, food franchises are making big bucks and paying big bucks to their CEOs. The Wendy’s Co., Papa John’s International, Yum! Brands, which owns Taco Bell, and DineEquity, which owns Applebee’s, are all generating profits that surpass pre-recession levels and all pay their top executives millions, according to a study by the National Employment Law Project.

In addition, a study by the U.S. Bureau of Labor Statistics shows that rates of involuntary part-time work throughout the economy began accelerating in 2006, well before the passage of the Affordable Care Act—and even before the worst of the Great Recession.

Food service was one of three industries accounting for much of this growth, and in 2010, half of all fast food employees worked part-time, according to the Bureau of Labor Statistics.

Fast food restaurant employees are among the lowest paid workers in the country, most making less than $8 an hour. A study by the Economic Policy Institute titled “The Future of Work” found that nearly three-fourths of food service workers received wages at or below the poverty line.

In late November more than 200 New York City workers from McDonald’s, Taco Bell, Wendy’s and other fast food chains walked out, demanding higher pay, better working conditions and recognition of their unionization efforts.  Unionized workers are a third more likely to have employer-sponsored health insurance than non-unionized workers. (more…)