Why Slide 1 Trump is part of

Why? Slide 1

Trump is part of the Western Revolt § Brexit § Le Pen (France) § The Party for Freedom (Netherlands) § Orban (Hungary) § Bernie Sanders (from the left) § Donald Trump (from the right) Slide

Problem Deeper than Trump Since 2008, the Democrats have lost 917 state, local and national elections In the state of Michigan 500, 000 votes switched from Obama to Trump Conservative Republicans control 33 out of 50 state governments Slide 3

Two Basic Reasons for the Revolt: 1. Runaway Inequality 2. We are poorly organized Slide 4

Discussion Question 1: How big is the pay gap between a top 100 CEO and the average worker? Slide 5

CEO-to-Worker Pay Gap Soars Sources: CEO pay from “CEO Compensation Survey, ” Forbes, April or May issues, 1971 -2012; earnings for workers from Bureau of Labor Statistics. Slide

Wage Gap by Country Slide 7

Discussion Question 2: Why Have Wages & Productivity Stopped Rising Together? Slide

Financialization: Primary Cause of Wage Stagnation Source: International Labor Organization, Global Wage Report 2012 -13 Slide

Financial vs. Non-Financial Incomes Slide 10

Financialization and the Productivity Gap FINANCIAL VS. NON-FINANCIAL COMPENSATION REAL WAGES VS. PRODUCTIVITY INCREASES Slide

Discussion Question 3: How does so much wealth end up on Wall Street and with top CEOs? Slide 12

The Better Business Climate Taxes Regulations (unions, finance) o Gov’t Social Spending + Privatization Profits & Investments All Boats Rise Corporate Trade Deals Slide 13

STEP 1: Buy Companies Using Borrowed Money § After finance was deregulated around 1980, corporate raiders bought up company after company using borrowed money Slide

STEP 2: Make the Target Co. Pay Back the Loan § The corporate raiders take some of the loan as fees and special dividends § They give some to the CEOs and bankers § Then they make the company pay it all back Slide

STEP 3: Pay CEOs with Stock Incentives Yearly average in 2012 dollars Slide

How the Top 500 Executives Are Paid (2013) Source: Standard & Poor’s Execu. Comp database, calculations by Matt Hopkins Slide 17

If you are the CEO and you are paid with stock incentives, what would you do? Slide 18

STEP 4: Use Profits to Buy Back Stock to Raise Its Price and Your Salary! Source: Data made available by William Lazonick, The Academic-Industry Research Network Slide

STEP 5: Squeeze the Co. to Pay Back the Loans and to Buy Back Stock § Downsize through layoffs § Ship production abroad § Sell off product lines and divisions § Speed-up production § Raid pension funds or discontinue them § Cut wages and benefits § From “Retain and Reinvest” to “Downsize and Distribute” Slide

Corporate Outcomes of Financial Stripmining § Average real wages stagnate § Financial and CEO incomes skyrocket § Good jobs and benefits decline § Union Strikes and Membership Decline Slide

Unions Collapse (10. 7%) Mass Strikes Vanish Union Membership Declines Slide 22

Discussion Question 4: How does financial strip-mining impact our communities and the public sector? Slide 23

Corporate Debt Explodes, But Debt Is Not Taxable Source: Federal Reserve Economic Data, FRB of St. Louis, research. stlouisfed. org/fred 2; quarterly, end of period. Slide

Corporate Taxes as Percent of State and Local Revenues Declines Source: Bureau of Economic Affairs Slide

Off-Shore Tax Shelters Cost Us $150 B Annual Tax Revenues Lost to Tax Havens § $150 billion per year lost in off-shore tax shelters, aided and abetted by Wall Street Individual and Corporate Income Taxes Combined Rank State Revenue Losses 1 California $7. 1 billion 2 New York $4. 3 billion 3 New Jersey $2. 8 billion 4 Illinois $2. 5 billion 5 Pennsylvania $2. 1 billion 6 Minnesota $2. 0 billion 7 Massachusetts $1. 7 billion 8 North Carolina $1. 0 billion 9 Florida $. 98 billion 10 Maryland $. 97 billion Slide 26

Rich Pay Taxes at a Lower Rate Top 1% of taxpayers Next 4% Next 15% Fourth 20% Middle 20% Second 20% Lowest 20% Source: Institute on Taxation and Economic Policy, whopays. org Slide

Corporate and Financial Elites Pour Money Into Politics Corporations / Finance Single Issues Labor Source: Center for Responsive Politics Slide

Runaway Inequality = No Average Voter Impact on Public Policy Professors Martin Gilens (Princeton) and Benjamin Page (Northwestern) reviewed 1779 Congressional acts between 1981 and 2002. Their study demonstrated: “…. the preferences of the average American appear to have only a minuscule, near zero… impact upon public policy. They concluded: “… if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened. ” Source: https: //scholar. princeton. edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics. doc. pdf Slide

The Percentage of the workforce in the Public Sector: U. S. vs Norway Source: Standard & Poor’s Execu. Comp database, calculations by Matt Hopkins Slide 30

Perpetual Fiscal Crisis = State and Local Government Need Wall Street for High Cost Infrastructure Financing Source: “No Small Fees”, A Report by Fix LA Coalition, March, 2014 Slide

Perpetual Fiscal Crisis = Public Pension Crisis Source: Good Jobs First, January, 2014 Slide

Wall Street Revolving Door Makes TPP Work for Financial Elites § § § Michael Froman leads charge in Clinton Administration to repeal Glass-Steagall Leaves for Citigroup presses for trade provisions making it harder to regulate Wall Street Leaves Citigroup with $4. 5 million bonus to Obama Administration to be chief trade negotiator TPP contains provisions advocated by Citigroup making it harder to regulate Wall Street Slide

Discussion Question 5: How does Financial Strip-mining Impact the Environment? Slide

Runaway Inequality = Job Insecurity = Less support for action on Climate Change Slide

Stock Buy-Backs = Less Green Car Investment § Harry J. Wilson, a 37 year old Wall Street investor joins the Obama Auto Industry Task Force § Helped secure $49. 5 billion government bailout for GM which leads to a tax-payer loss of $11. 2 billion and $11 billion in worker givebacks. § Leaves the Obama administration and organizes hedge funds to buy up 2% of GM stock. § He then pressures GM to a $5 billion stock buyback and makes millions for himself. Slide

Runaway Inequality = Environmental Disinvestment § Corporate Financial strip-mining = less money for environmental controls and health and safety. § Perpetual Fiscal crisis = less money for public sector green investments and Just Transition. § Job insecurity = lower support for action on climate change. § Stock buyback financial strip-mining = less investment in green products. Slide

Summary: Financial Strip Mining of America § From corporations through stock-buy-backs, loan fees, and stock incentives § From communities through tax avoidance and high fees for infrastructure loans § From the poor through regressive taxation, fines/forfeitures and incarceration. § From students and their families through student loans. § From the environment through green disinvestment Slide

Runaway Inequality Promotes a New Social Philosophy § If you want education, go into debt § If you are poor, fend for yourself § If you want a job, go find it § If you are a public sector worker, you are less valuable than a private sector worker § If you want a poverty program, go to jail Slide

Runaway Student Loans Slide

Children Living in Relative Poverty Slide

What’s Runaway Inequality’s Solution to Youth Unemployment? Young High School Grads (17 -20) Slide

We Have the Most Prisoners in the World Source: Bureau of Justice Statistics Slide

Financialization and Prisons FINANCIAL VS. NON-FINANCIAL COMPENSATION Source: Bureau of Justice Statistics STATE AND FEDERAL PRISONERS Slide

Runaway Inequality Punishes Black & Poor Communities to Raise Revenue Michael Brown Source: City of Ferguson, MO, “Comprehensive Annual Financial Report for the Year Ended June 30, 2013, ” www. fergusoncity. com/470/Comprehensive-Annual-Financial-Report Slide

What do we do about Wall Street and runaway inequality? Slide 46

Takeaway #1 Runaway inequality will not cure itself Slide 47

Takaway #2 It will take a massive popular movement to counter runaway inequality Slide 48

How Do We Build It? Slide 49

An example of a powerful national anti-Wall Street movement: The Populists 1880 -96 Slide 50

Populists’ Agenda § Consumer and producer co-operatives § Public banks § Public ownership of railroads, telegraph and telephone industries § Progressive income tax Slide

Top Salaries at Bank of North Dakota President & CEO $261, 237 Chief Lending Officer $150, 403 Chief Admin. Officer $139, 205 Chief Admin. Officer $115, 763 Chief Business Officer $110, 250 Director of Student Loans $105, 943 Eric Hardmeyer Bob Humann Tim Porter Lori Leingang Joe Herslip Wallace Erhardt Slide

Discussion Question 6: What’s our Agenda? Slide

Populist Organizing Strategy § Educate and organize § Organize and educate § Army of 6, 000 educators Slide

What do we need to do? § Common Agenda, Common Analysis § Educational infrastructure § New national movement organization § New activist identity – silo busters -- movement builders Slide

The Challenge Ahead §How do we win back those who voted for Obama, then Sanders, and then Trump? Slide

We need our army of educators ARE YOU INTERESTED? Les. Leopold@aol. com Runawayinequality. org E-book available at Amazon, Barnes and Noble, Apple (all proceed go to campaign, not author) Slide 57