80% living on 20% leftover’s

Déjà vu?

I learned just this year that the CIA (Central Intelligence Agency) publishes a report (link) on the Internet about the United States. I was reviewing the section on the economy that was updated on August 13, 2009. In the middle of the report is this statement, “Since 1975, practically all the gains in household income have gone to the top 20% of households.” Furthermore, “The onrush of technology largely explains the gradual development of a ‘two-tier labor market’ in which those at the bottom lack the education, and the professional/technical skills of those at the top and more and more, fail to get comparable pay raises, health insurance coverage, and other benefits.”

No middle class–no small business

For 34 years the American middle class has been steadily shrinking. Where will we be when the middle class is gone? Will we be safer, healthier, or wealthier? When you think about it, small business, the backbone of the American economy is in serious danger. As the split widens between the haves and the have nots, who will buy the products and services of small business? It won’t be the big corporations, that’s for sure. What will this country be like when the splitting stops and 20% of the population control 80% of the wealth, and 80% have to live on what’s left?

Americans slipping slowly down the drain

The CIA report also says, “Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade a budget deficits, and stagnation of family income in the lower economic groups.”

Printers probably the first to go

Why do I bring this up? My career has been spent in the printing business. Most printing firms in the United States are small businesses. When the middle class is gone, and small business owners disappear, what will happen to printing? The answer is obvious.

How can government help turn the tide?

• Educational Needs. Provide educational opportunities to all citizens who want it. A college education shouldn’t create a lifetime burden of student loans. Free education would benefit us all.
• Health Care. Make sure all citizens have access to good health care. We have the most expensive health care in the world and some of the most unhealthy citizens. One reason is because care is delayed until the need is critical.
• Ban Lobbyists. Cut access of  corporate lobbyists and make sure they have only the same access to lawmakers as any other citizen. Our survival as a nation depends on fairness for all. Special interests cannot be allowed to rule. When special interests rule, the public loses.
• Regulate Compensation Packages. Create an Executive compensation commission to review and regulate public corporations. Companies who are vital to the national interest and deemed too big to fail have to be subjected to intense scrutiny. Just as the SEC requires annual reports, compensation must be examined and regulated if necessary, to protect our common interest.
• Recover Pension Funds. Create a collection mechanism to recover money from executives of corporations who raided or otherwise harmed vested pension programs. It is unconscionable that an employee be left penniless after working a lifetime for benefits, while the upper echelon retires comfortably.
• Banking Transparency. Make sure publicly held corporate executives cannot secrete their fortunes in secret accounts. Transparency in banking is necessary only for those who have the power to wreak havoc on the economy and cause recessions.

I know, some of these suggestions will strike some as being un-American. Maybe you are right, but when any sector has the power to harm the whole, it has to be considered a public threat. The demise of the middle class is a public threat and must be treated as such.

RE: Previous Blog, Stealing Customers for Profit in the Recession

My last blog post has stirred a lot of interest and sparked many comments. Some comments were posted on the blog, some used my contact form, and some responded through Linkedin. I’m not breaking any real news to the business world. This recession is a B-I-T-C-H  (sorry for the use of the b word, I just couldn’t express it any other way, forgive me).  Once we get through it, and I’m sure we will get through it, we will be standing on a figurative bloody battleground mourning our fallen comrades. We will never be as naive as we were and assume that the big money people know what they are doing. Just because they’re paid seven figure incomes doesn’t mean they have any sense. To believe otherwise is naive with a capital N.

We have a chance now to reform our system if we act fast and aren’t too weak from the beating we’ve taken. Here’s my thought. If a company is a publicly held corporation, doesn’t it have a public responsibility? Those CEO’s who bag multimillion dollar compensations despite the fact that their companies are losing money should be subject to Old West justice, in my opinion. One case in point is Prudential Financial’s CEO John Strangfeld. For the year 2008 Mr. Strangfeld snagged between $14 million and $16 million dollars in salary and other compensations. Now what did John Strangfeld accomplish to be worthy of such a grand bounty? Under his $14 million dollar leadership, Prudential Financial Inc. posted a net loss of $1.1 billion dollars. That’s right. Okay, his personal management may not have been totally to blame for the loss, but where does the buck stop? Where does it stop?

There is a ruling class in America today. If you aren’t in it. you count for nothing, or less than nothing in their minds. John Strangfeld when questioned about his excessive compensation said that the people expect him to live a lavish lifestyle. The King has spoken and of course We The People want him to live a lavish lifestyle even if it bankrupts us all.

Can you believe the gall? This ruling class is so out of touch with reality that they truly believe what they are spouting. My point goes back to the meaning of a public corporation. Now I know that the distinction by law is that a closely held corporation has a limited number of private stockholders and a public corporation sells its stock on the open market, so some would brush off my argument without thought. The thing we overlook is that great power to do harm lies in the hands of this “uncrowned royalty.” The United States of America was brought to its knees because these power brokers decided that No Income Verification mortgage loans, and 1% interest only loans, were a good idea. Really? Any elementary grade student could tell them that loaning money to people who didn’t have the means to repay it, was a very bad idea.

Then when they packaged their terrible decisions into stock and sold them to unwary consumers and foreign companies they walked away stuffing money in their shoes, pockets, under their hats and smiling the whole time. Who pays? We do. The common people losing jobs and businesses. That’s who pays. Heck if one of them got charged with a crime the justice system would take some money away from them. Let’s see, you get $14 million and lose half, you still walk away with more than I’ll make in my lifetime. How is that fair?

Now when you think about it, really think about it, these multi-multi-millionaires and billionaires did more damage to our country than Al Quida could ever do. They perpetrated economic terrorism on us all and when the government suggests that their compensation packages ought to be reviewed they scream to high heaven. Again I say they have a public responsibility that goes beyond the front gates of their lavish castles.

Why am I so angry? I’m angry because the printing business has fallen on very hard times. Printers are closing doors, and may never reopen again. I’m sure the same is happening in other industries, but the one I am most familiar with is printing. It breaks my heart to see companies who have been around for decades and their owners who put their whole lives into their businesses reduced to shambles. Now we see printers who used to be friendly competitors, employing guerrilla tactics just to keep their businesses alive.

Write to your congressmen, write to the President, tell them that those who head public corporations need to be answerable to the public, and if they wreak havoc on the economy because of their self-serving decisions we want them individually and severally to be held responsible. We want to take away all of their toys and give them stock-boy jobs at Wall Mart. If they had to make ends meet like the rest of us I wonder how long it would take to effect real change?