American Corporate Executives Cash In as Austerity arrives for the Rest

By ANDRE DAMON | WSW | MARCH 22, 2013

As the US government prepares to furlough 1 million federal workers and slash hundreds of billions in social spending, corporate executives in the United States are receiving among the highest payouts in history. USA Today reported Thursday that at least ten CEOs took in $50 million apiece in 2012, largely as a result of cashing in stocks that have soared in value with the rising market. According to the newspaper, “Early 2013 proxy filings detailing 2012 compensation show a growing number of CEOs reaping $50 million or more, gains that could prove unmatched in breadth and size since the Internet IPO craze enriched tech company executives more than a decade ago.”

In its own analysis, the Wall Street Journal observed that executive pay has become ever more directly tied to stock values, noting that last year, more than half of compensation at major companies was tied to “stock or financial performance,” compared to 35 percent in 2009.

Among the top pay packages according to preliminary calculation is that of Starbucks CEO Howard Schultz, which included stock options valued at $103.3 million this year, on top of $30 million in other compensation and stock, as well as $10.2 million in vested shares, according to USA Today.

Ford CEO Alan Mulally likewise took home $61 million by cashing in shares that vested last year, added to his compensation of $21 million. This payout was based on a sharp rise in the company’s profitability that has been made possible by downsizing and the slashing of wages for newly hired workers to $15 per hour. Mulally’s pay is more than 2,500 times that of a new auto worker.

Apple’s Tim Cook got $139.7 million from restricted shares that vested last year, while Oracle CEO Larry Ellison was granted $90 million in stock.

These payouts are only a sampling of the huge sums that the ruling class is handing itself. The stock market, inflated through $85 billion a month handed to the banks by the US Federal Reserve, is the central transmission belt for this enrichment.

The engorgement of the ruling class has been facilitated by the actions of the state, and in particular the Obama administration. After the financial collapse of 2008, facing widespread public outrage at executive compensation, the administration explicitly opposed any constraints on pay. “We don’t disparage wealth,” Obama said repeatedly. Proposals for CEO pay centered on encouraging companies to tie this pay more directly to “performance”—i.e., share values.

Even while the corporate CEOs and other members of the financial oligarchy rake in astronomical payouts, the constant refrain from the media and big business parties is that there is no money to pay for social spending, and that health care and retirement programs must be cut and workers’ incomes slashed.

Next month, as a result of $85 billion in “sequester” spending cuts, over 1 million federal government employees will begin scheduled furloughs, resulting in effective pay cuts of 20 to 35 percent. These furloughs come together with tens of billions in cuts to public education, anti-poverty programs, and unemployment insurance.

With both Democrats and Republicans acknowledging that the cuts will be permanent, the turn now is toward working out an agreement to slash hundreds of billions of dollars from Medicare, Medicaid, and Social Security. The ultimate aim of the ruling elite is to dismantle everything that remains of the social safety net, plunging the working class into Dickensian poverty and social misery.

The argument that there is no money to pay for these programs is rendered absurd by the vast amounts of cash being handed out to executives or simply sitting around on corporate balance sheets. In 2012, the amount of cash held by US non-financial corporations rose by 10 percent, to $1.45 trillion, according to Moody’s. This figure is enough to pay for the sequester cuts 17 times over.

In fact, Apple, whose cash hoard rose to $137 billion, could itself pay for this year’s sequester cuts, with $50 billion to spare.

Loaded with cash and unwilling to invest, corporations have dramatically increased dividend payments to investors. The New York Times reported earlier this month that S&P 500 companies are expected to hand investors $300 billion in dividends this year, an increase over last year’s payout of $282 billion. American corporations bought back $117.8 billion in their own stock last month, the highest total on records going back to 1985.

The relationship of the American ruling class to the rest of society is a fundamentally parasitic one. Over the course of three decades, under conditions of economic decline, stock market speculation, rather than production, has become the central mechanism of wealth accumulation.

The 2008 crisis, far from reversing this process, has strengthened it. The ruling elite seized on the crisis to escalate the transfer of wealth. The soaring CEO pay and investor payouts on one hand, and vast social misery on the other, are in reality two sides of the same process.

The American ruling class proceeds with an almost shameless disregard for the consequences of its own actions. Amidst mass poverty and unemployment, as it dictates the most brutal austerity measures all around the world, the financial aristocracy engages in an uncontrollable orgy, propelled by its own social being.

Such actions, however, do not go unnoticed. They are producing within the United States an immense wellspring of social opposition that will take the form of working class struggle.

Here are the real costs of Obamacare

“The Obama Care Health Care Reform Plan or Health Care For America Plan will cost the average American around $70.”–obamacarefacts.com

By BOB LIVINGSTON | PLD | NOVEMBER 19, 2012

First of all, allow me to disabuse you of the notion that Obamacare has anything to do with “health” care. Obamacare is not about health. It’s not about lowering the cost of health insurance. And it’s not about ensuring that everyone is insured.

It is about locking more Americans into the clutches of the Big Pharma/Medical Industrial complex, providing more customers for Big Insurance and confiscating more wealth from individuals and businesses.

The American healthcare system should properly be called “sickcare.” It’s a subtle and esoteric system of population control with prescription drugs issued at the public expense by the drug cartel — the conglomerate of pharmaceutical houses.

They commit population control under the pretense of “healthcare” and make people pay for it. And this medical cartel has no legal liability. It is forced — or at least deceptive — medication. And most doctors don’t have a clue. They write prescriptions based on falsified data and kickbacks — from speaker fees and ghostwriting glowing medical reviews — without regard to whether their patients will benefit.

Health costs nothing. Sickness care has us in bankruptcy. If the medical establishment, insurance companies and Obamacare writers wanted Americans to be healthy, they’d promote healthy eating, healthy lifestyles, vitamin D supplementation, natural supplements and alternative health choices rather than toxin-laden vaccinations, body-destroying cancer treatment drugs, harmful symptom-rather-than-cause-attacking heart, statin and diabetes drugs, and carcinogen- and GMO-laced processed foods.

Now Obamacare’s devastating financial effects are coming to the fore. They can be seen in the rising costs of health insurance, layoffs, cuts in employment hours, rising prices and looming tax hikes. Obamacare will send unemployment numbers skyrocketing and force workers — who find their hours cut back below the “full-time” threshold of 30 hours — to try to find multiple part-time jobs to make ends meet. Or they’ll give up working altogether and join the rising numbers of wards of the state: 49.7 million in poverty, non-farm employment at 2005 levels, 46.7 million on food stamps and 9 million leaving the workforce and joining the disability roles. The Congressional Budget Office predicts Obamacare will cost 800,000 jobs by 2020-2021. It will be much worse than that.

With jobless numbers already high and manufacturing and mid-level white collar professional service jobs leaving the United States never to return, most new jobs come in the healthcare, social assistance (ambulatory healthcare services) and food service industries (waiting tables and tending bar).

But the medical device and food service industries are being hit hardest by Obamacare, as business owners seek ways to remain profitable and competitive once the provisions kick in.

During the International Franchise Association convention in Washington, D.C., in September, franchisers learned just how hard Obamacare would hit them. David Barr, a Taco Bell and Kentucky Fried Chicken franchiser, told the group how Obamacare will cut his profits and probably theirs as well — in half. Their only choice is to slash employee hours so they aren’t eligible for company-paid health insurance or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides health insurance to 30. His total cost is $129,000 per year and his employees pay $995. Under Obamacare, he’ll have to provide health insurance for all 109 full-time employees at a cost of $444,000 per year. The $315,000 increase is more than half his annual profit, after expenses. If he chose the fine instead, his healthcare costs would still increase by $89,000 per year.

Darden Foods, the world’s largest casual dining company — it includes Olive Garden, Red Lobster and LongHorn Steakhouse — was one of the first to announce it would be limiting worker hours to avoid healthcare requirements. Papa John’s CEO John Schnatter said the cost of his pizzas will rise between 11 and 14 cents and worker hours will be reduced. He expects the law to cost his company between $5 billion and $8 billion annually.

In July, McDonalds Chief Financial Officer Peter Benson said Obamacare will cost his company $420 million in new healthcare costs even though the company received a waiver from the Administration of Barack Obama. His menu prices will increase as a result.

Florida-based restaurant owner John Metz, who owns 40 Denny’s restaurants and the Hurricane Grill & Wings franchise, said last week he would be tacking a 5 percent Obamacare surcharge on his meals and reduce employee hours. He says it is “the only alternative. I’ve got to pass the cost to the customer.”

Look for other restaurants faced with a choice of becoming unprofitable by absorbing the costs or uncompetitive by raising their menu prices if they insure their employees and pass the cost to consumers to also cut worker hours.

Wal-Mart recently raised its health insurance premiums as much as 36 percent, putting coverage out of the reach of many of its employees. Its executives say employee hours will be cut. Likewise, the Kroger grocery chain is also reducing employee hours.

Other companies that have announced Obamacare layoffs include:

  • Welch Allyn: A medical diagnostic equipment manufacturer, Welch Allyn will lay off 250 employees, or 10 percent of its workforce, over the next three years because of the Medical Device Tax mandated by the law.
  • Dana Holding Corp.: A global auto parts manufacturer, Dana Holding Corp. will cut its workforce of 25,500, citing $24 million in additional healthcare expenses over the next six years.
  • Stryker: One of the biggest medical device manufacturers in the world, Stryker will close its Orchard Park, N.Y., facility, eliminating 96 jobs in December. The company will also eliminate about 5 percent of its remaining workforce — about 1,170 workers.
  • Boston Scientific: CEO Ray Elliot recently announced that Obamacare taxes will force him to lay off between 1,200 and 1,400 workers and shift investments and jobs to China.
  • Medtronic: The medical device maker cut 500 jobs this past summer and will eliminate another 500 in 2013 because of Obamacare taxes.
  • Smith & Nephew: 770 layoffs.
  • Abbott Laboratories: 700 layoffs.
  • Covidien: 595 layoffs.
  • Kinetic Concepts: 427 layoffs.
  • St. Jude Medical: 300 layoffs.
  • Hill-Rom: 200 layoffs.

And then there are the looming taxes.

The undocumented alien and chronic White House liar (see the ever changing Benghazi narrative, among others) has repeated ad nauseam that he will not raise taxes on those making less than $250,000 ($125,000 or $200,000 or whatever his story is today). But here are some Obamacare taxes kicking in beginning in 2013, most of which will hit both the so-called “rich” and the poor either directly or indirectly.

  • The Obamacare Medical Device Tax is a $20 billion tax increase. Obamacare imposes a new 2.3 percent excise tax on gross sales — whether the company makes a profit or not. This will increase the cost of medical devices like pacemakers, prosthetics and wheelchairs.
  • The Obamacare “Special Needs Kids Tax” is a $13 billion tax increase. It hits the 30 million to 35 million Americans using a work-based Flexible Spending Account (FSA) to pay for basic medical needs by having money removed from their paychecks before taxes, which reduces their taxable income and helps them save on their tax bill. It faces a new cap of $2,500 (currently the accounts have no cap). There are 7 million families in American with special needs children who need care that far exceeds the $2,500, many of them the working poor.
  • The Obamacare Surtax on Investment Income is a $123 billion tax increase. This is a new 3.8 percentage point surtax on investment income earned in households making $250,000 or more ($200,000 for single filer). This will increase the tax on capital gains from 15 percent to 23.8 percent. Capital gains include profits on the sale of a home. In other words, when you sell your house for more than you paid for it, which all homeowners hope to do, you will pay 23.8 percent on the value difference when you sell. It also includes gains made on savings and retirement accounts. The rate paid on dividend income increases from 15 percent to 43.3 percent, as does the rate on other investment income.
  • The Obamacare “Haircut” for Medical Itemized Deductions is a $15.2 billion tax increase. Currently, Americans facing high medical expenses are allowed a deduction if expenses exceed 7.5 percent of adjusted gross income. The “haircut” raises the threshold to 10 percent. This will most harm those near retirement age and those with modest incomes but high medical bills — like those with special needs children or dealing with catastrophic illness.
  • The Obamacare Payroll Tax Hike is $86.8 billion tax increase. The Medicare payroll tax rate on individuals earning $200,000 ($250,000 for couples) will see their payroll tax increase from 2.9 percent to 3.8 percent. This is a direct marginal income tax hike on small-business owners, who are liable for self-employment tax.

And even more Obamacare taxes kick hit in 2014.

The bottom line for the average family, according to Forbes.com, is an additional annual cost of $1,261 for the average family, or a diversion of 2.5 percent of the average household’s income in taxes alone. And this doesn’t factor in the additional costs resulting from rising food and product costs and loss of income due to worker hour reductions and job losses.

Obamacare sycophants glommed on to the progressive, government-growing, insurance industry-profiting healthcare reform effort largely because they believed Big Insurance was screwing them over by raising premiums and not paying for certain conditions. Yet those hated insurance companies wrote the law and made sure that those who disdained health insurance — either because they were young and felt they didn’t need it or were financially able to go without it — were forced into the plan, ensuring Big Insurance a whole host of new customers, guaranteeing themselves a large profit and a government treasury to make sure the bills were paid. And those sycophants are just delighted with that outcome.

But if they thought they were drawing the short straw when corporate profits were on the line, wait until they see what they get now that the sociopaths in the dysfunctional government bureaucracy are involved.

Obamacare is Mandated Social Engineering

INFOWARS.comJULY 6, 2012

Retired neurosurgeon, author, lecturer and educator Dr. Russell L. Blaylock gives his expert doctor’s perspective analysis of the unconstitutional Patient Protection and Affordable Care Act.

The Truth About Obamacare: It’s Even Worse Than You Think

By STEFAN MOLYNEUX | FREEDOMAINRADIO | JUNE 29, 2012

Fact 1: There Is No Law in the US Anymore.

Fact 2: Obamacare Is an Admission That All Previous Government Healthcare Programs Have Failed.

Fact 3: Cost of Already Doubled from Initial Estimates.

Fact 4: 70%+ of Healthcare Issues Results from Individual Choice.

Fact 5: The Inability to Discriminate on Pre-Existing Conditions is an Essential Driver of Healthcare Costs.

Fact 6: The Fines for Noncompliance Are Destined to Rise Enormously.

See the simple and raw truth about Obamacare explained in a philosophical, easy to understand way below:

Obama Machine Preparing for Healthcare Defeat

By LUIS MIRANDA | THE REAL AGENDA | JUNE 8, 2012

The Obama administration recognizes that it may actually be handed a defeat later this month if the Supreme Court strikes down the individual mandate that obligates Americans to buy health insurance from a government program or worse, if the judges find Obamacare unconstitutional as a whole. While a decision is made by the Supreme Court justices, the administration is taking steps to cope with a defeat that could be decisive during an election year both politically and in the economic realm.

Secretary of Health and Human Services, Kathleen Sebelius officially announced what she called contingency plans should Obamacare be rejected as unlawful by the US Supreme Court. The Court does not need to declare Obamacare illegal in order to cause chaos for the administration. A declaration that the controversial individual mandate violates individual rights, would basically and automatically defund Obamacare, because it is based on the use of government force that the Obama administration intends to finance its program.

The prospect of defeat raised awareness in the Federal Government and all responsible parties are now working extra time to mitigate the impact of a decision not to uphold Obamacare. While she was speaking at a women’s health town hall meeting held at the White House, Kathleen Sebelius said that although the government remained optimistic, they were also preparing for the worst. “We are confident and optimistic that this change within the law was well within the purview of Congress. Having said that, we’ll be ready for court contingencies,” she said. Sebelius made sure to use scare tactics in order to seek support and to put pressure on the Court’s decision. She added that if Obamacare is stroke down such a decision would have a “pretty cataclysmic impact”. Her explanation went on to say that such outcome would indeed undo what she called the “incredible changes and improvements to Medicare.

The Obama administration’s hopes are now riding on a positive decision by the Court that ratifies the healthcare law based on the premise that the judges will consider the large number of people who will allegedly benefit from socialized medicine, many of whom, Obama himself has said, cannot afford to pay for healthcare themselves. This is often added to other measures included in the legislation which allow children to remain under their parents’ health coverage and a mandate for insurance companies not to deny coverage to those with pre-existing conditions.

The parts of the law that the Obama administration does not want the justices or the public to remember is that constitutionally, government cannot obligate an individual to buy insurance. It must be a decision made by each person. But since the success of the law depends on the financing provided by all participants, a declaration that the individual mandate is unconstitutional would effectively defund Obamacare. “What we’re doing right now is just working as hard as we possibly can to get ready for 2014,” Sebelius said, referring to the time when most of the law will actually take effect.