SHORT TAKES ON IMPORTANT STORIES #5: CORPORATE POWER AND STOCK BUYBACKS

Corporate greed and power are evident in stock buybacks and international actions by the U.S. government. Here are short takes on four important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information.

STORY #1: Corporations’ purchases of their own stock, known as stock buybacks, have increased dramatically over the last 40 years. Between 2010 and 2020, U.S. corporations bought back $6.3 trillion of their own stock. Stock buybacks were outlawed or severely restricted as illegal stock price manipulation until they were deregulated in 1982. Buybacks use profits to enrich stockholders and executives rather than investing in the business or in its workers (e.g., through research and development, upgrading equipment, expanding manufacturing capacity, better pay for workers, better working conditions, or improved safety). [1]

Furthermore, corporate executives use their inside, non-public knowledge of when and how these buybacks will happen to buy or sell stock to further and unfairly maximize their personal benefit. (This is one way the rich get richer.) The Securities and Exchange Commission (SEC) drafted a new regulation requiring corporations to disclose when executives had bought or sold their company’s stock shortly before or after the announcement of a buyback in an effort to control this unfair insider trading. However, the courts struck down the regulation before it could be implemented. Rather than rewriting the regulation to overcome the judge’s concerns, the SEC, under pressure from Wall St. and corporate executives, gave up on the new regulation.

Spending profits on buybacks rather than investments in the corporation’s business has serious consequences. For example, over the past ten years, Boeing has spent $39 billion on buybacks (and an additional $20 billion on dividends to shareholders). Over that period, Boeing’s planes have had two major accidents and numerous less serious accidents and safety issues. It has repeatedly failed to follow through effectively on promised safety improvements and insiders have reported numerous situations where safety was shortchanged to reduce costs. Norfolk Southern Railroad spent $18 billion on buybacks and dividends in the five years before the disastrous derailment in East Palestine, OH. Employees reported many cost saving strategies that reduced safety. Abbott Labs spent $5 billion on buybacks while allowing manufacturing conditions to deteriorate until its infant formula became contaminated resulting in infant deaths and a national shortage of formula when its manufacturing had to be shut down due to safety problems. Bed Bath and Beyond actually went into debt to buyback $12 billion of its stock, which caused it to go bankrupt.

STORY #2: Intel, the biggest U.S. computer chip maker, has been using huge amounts of its profits ($152 billion since 1990 or an average of $4.6 billion each year for 33 years) to buy back its own stock. Intel’s CEO’s compensation was $179 million in 2021, most of it linked to the price of the corporation’s stock, which is artificially boosted by the stock buybacks. [2]

What makes Intel’s stock buybacks particularly concerning is that Intel, rather than spending its own profits on expanding manufacturing capacity, is getting an $8 billion grant from the federal government along with $11 billion in loans on favorable terms. The government funding is from the CHIPS and Science Act and its goal is to incentivize corporations to expand chip manufacturing capacity in the U.S. and to create American jobs. However, there is no prohibition on Intel continuing to buy back its own stock or on it laying off workers. Intel has refused to pledge that it won’t buy back its own stock and that it won’t lay off workers while receiving federal money under the CHIPS Act. So, while it may create 10,000 jobs at a new manufacturing facility, it may be laying off workers elsewhere.

STORY #3: For decades, the $47 billion infant formula industry, led by Mead Johnson and Abbott Labs, has gotten the U.S. government to use its muscle around the world to support sales of formula. U.S. agencies have intervened with at least 17 countries. They have opposed those countries’ efforts to limit marketing of formula or require additional safety precautions, despite the well-documented benefits of breast feeding and links to obesity of feeding formula to toddlers. The countries range from those in the European Union, to Canada, Israel, China, and multiple countries in Africa, Southeast Asia, and Central and South America. U.S. agencies have complained about restrictions on formula advertising in bilateral meetings with other countries as well as before the World Trade Organization (WTO). The implicit threat is a formal WTO complaint that can lead to costly litigation. In 2018, officials in the Trump Administration were accused of threatening to withhold military aid to Ecuador over its support for breastfeeding. [3]

Formula obviously costs more than breast milk and requires clean water to prepare, which is not always available. It typically costs more than cow’s milk. However, aggressive marketing by the formula industry, often claiming unfounded benefits for formula, persuades parents to buy it even when they can barely afford it. The U.S. actions in support of the infant formula corporations have even undermined the work of other U.S. foreign aid and health agencies that have promoted breastfeeding for many years.

STORY #4: At the behest of the genetically engineered crop industry, led by Bayer (due to its acquisition of Monsanto), the U.S. government is challenging Mexico’s ban on using genetically modified (GM) corn for human consumption. Mexico’s president announced back in 2020 that he planned to phase out the use of GM corn for human food (as opposed to animal feed) and to ban the use of the glyphosate-based herbicides (very profitable Monsanto products) that are essential to growing GM corn. The U.S. objected and after negotiations failed to reach an agreement, the U.S. has submitted the dispute to the dispute resolution process established by the U.S.-Mexico-Canada Trade Agreement. GM corn was introduced commercially in 1996 and its safety assessments were done by the corporations working to grow and sell it. The heavy and increasing use of pesticides and herbicides to grow GM corn is also a concern, especially given the lack of systematic monitoring of human exposure to them. Bayer has paid billions of dollars to settle lawsuits over the health effects (especially cancer) of exposure to glyphosate-based herbicides sold under Monsanto’s Roundup brand name. [4]

[1] Reich, R., 3/13/24, “Disclose executive stock buyback manipulations,” Robert Reich blogpost

[2] Leopold, L., 3/27/24, “Intel brags of $152 billion in stock buybacks over last 35 years. So why does it need an $8 billion subsidy?” Common Dreams (https://www.commondreams.org/opinion/intel-subsidy-chips-act-stock-buyback)

[3] Vogell, H., 3/21/24, “The U.S. government defended the overseas business interests of baby formula makers. Kids paid the price.” ProPublica (https://www.propublica.org/article/how-america-waged-global-campaign-against-baby-formula-regulation-thailand)

[4] Corbett, J., 3/26/24, “Experts warn of toxins in GM corn amid US-Mexico trade dispute,” Common Dreams (https://www.commondreams.org/news/genetically-modified-corn)

AUTHORITARIANISM WILL COME TO THE U.S. IF TRUMP IS ELECTED

There’s a detailed, written plan for the Trump administration, if he’s elected in 2024, to turn our democracy into an authoritarian dictatorship. Project 2025 is a detailed presidential transition plan that identifies policies and personnel to accomplish this transformation. It was developed by a Heritage Foundation-led coalition with a $22 million budget.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. Thanks for reading my blog! Special Note: The new, more user-friendly website for my blog is here.)

It becomes clearer by the day that the plan for the next Trump presidency is for an authoritarian dictatorship. This is not just Trump making crazy off-the-cuff statements; it’s a written plan that right-wing organizations and people are advancing every day.

Project 2025 is a detailed presidential transition plan that identifies policies and personnel to transform our democracy into an authoritarian Trump presidency in 2025. It was developed by a Heritage Foundation-led coalition of over 65 right-wing organizations with a $22 million budget. The Heritage Foundation, founded in 1973, a formerly conservative and now revolutionary think tank, has played a leading role in shaping Republican policies since 1980. It’s part of the well-funded network of right-wing groups that have transformed the Republican Party and the Supreme Court. [1]

Project 2025 lays out specific plans to transform the presidency, the executive branch of government, and all our democratic institutions into an authoritarian, strongman-led government. (See this previous post for more details.) If Trump is elected, its authors and supporters will aggressively implement the plan. As Kevin Roberts, president of the Heritage Foundation said, “[T]he Trump administration [in 2016], with the best of intentions, simply got a slow start. And Heritage and our allies in Project 2025 believe that must never be repeated.” [2]

I used to regard the Heritage Foundation as a very conservative but thoughtful contributor to policy debates. This is no longer true. The dramatic change came when Kevin Roberts was appointed its president in 2021. It abruptly changed; for example, it shifted from supporting Ukraine against Russia’s invasion to supporting Russia. Some staff members resigned because of this and other changes. It’s now fully embracing authoritarianism, ending our democracy, and “institutionalizing Trumpism.”

You probably know that Hungarian authoritarian Prime Minister Victor Orban recently visited former president Trump at Mar-a-Lago. And you probably know that Orban upended Hungarian democracy, replacing it with authoritarianism, including gutting civil service and filling government positions with his loyalists, taking over businesses to benefit friends and family, and attacking the rights of immigrants, women, and LGBTQ+ people.

What you may not have heard is that Orban also visited Washington, D.C. Despite being Hungary’s Prime Minister, he did not meet with any government officials. Instead, he met privately with right-wing luminaries and politicians at the headquarters of the Heritage Foundation. Its president, Kevin Roberts, is a big fan of Orban’s and the Heritage Foundation has established a formal partnership with the Hungarian Danube Institute, which is basically a government-funded front for Orban’s propaganda. The Danube Institute has given grants to right-wing entities in the U.S. It’s not known if the Heritage Foundation is one of those entities, but it wouldn’t be a surprise if it was.

There’s an in-depth article on the Project 2025 plan for a Trump presidency in The American Prospect magazine. [3] For example, the Justice Department would be used to prosecute Trump’s political and civilian adversaries. The Insurrection Act would be invoked so the military could be used to crush any protests. The plan includes a long list of enemies and how to target them, including everyone from federal civil servants to business and environmental regulators to union leaders to safety net beneficiaries.

Project 2025 includes a key strategy for quickly implementing the plan: immediately install loyal Deputy Directors (who don’t require Senate confirmation) across the federal bureaucracy and fire all the senior managers who require Senate confirmation. Under federal law, the deputies then become acting heads of the agencies.

Project 2025 states that the Department of Defense (DOD) “has emphasized leftist politics over military readiness” and that the DOD needs to “eliminate Marxist indoctrination.” It encourages rigorous review of all senior officers, i.e., generals and admirals, to ensure they “prioritize the core roles and responsibilities of the military over social engineering and non-defense matters.” This sounds like the implementation of an ideological purity test for military leaders.

Project 2025 would increase economic inequality by favoring the wealthy and large corporations. It calls for cutting taxes on unearned income, i.e., capital gains and dividend income. It calls for lowering the corporate tax rate (which has already been reduced by the 2017 Trump / Republican tax cut bill), privatizing every government function possible, and deregulating every industry. It would incentivize corporations to limit employee benefits by capping the amount that could be treated as an expense to $12,000. It would end congressional approval of arms sales to foreign countries. It would basically eliminate scientists and scientific studies from any role in policy making except for studies of “the risks and complications of abortion.” It would put Christian nationalism at the center of all policy-making and government activities.

Project 2025 would gut current environmental and climate change policies. It would repeal the tax credits for clean-energy companies and ensure climate change deniers are appointed to all relevant agencies and bodies, including the EPA’s Science Advisory Board. It would support the fossil fuel industry while cutting funding for improvements to the electric grid that are necessary for using renewable energy sources. [4]

Even if Trump himself is incompetent and mercurial, Project 2025 would put in place bureaucrats and procedures in all executive branch agencies that would be focused on and effective at implementing the authoritarian government it envisions. The complete Project 2025 plan itself is here, but at close to 1,000 pages it’s a lot to wade through.

[1] Swan, J., Savage, C., & Haberman, M., 7/17/23, “Trump and allies forged plans to increase presidential power in 2025,” The New York Times

[2] Richardson, H. C., 3/17/24, “Letters from an American blog,” (https://heathercoxrichardson.substack.com/p/march-17-2024)

[3] Meyerson, H., 11/27/23, “The blueprint,” The American Prospect (https://prospect.org/politics/2023-11-27-far-right-blueprint-america/)

[4] Noor, D., 7/27/23, “ ‘Project 2025’: plan to dismantle US climate policy for the next Republican president,” The Guardian (https://www.theguardian.com/environment/2023/jul/27/project-2025-dismantle-us-climate-policy-next-republican-president)

SHORT TAKES ON IMPORTANT STORIES #4: WORKERS AND ECONOMIC WELL-BEING

Here are short takes on five important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information.

STORY #1: The Consumer Financial Protection Bureau just finalized a regulation that caps at $8 the fee that the big credit card corporations can charge for a late payment. Currently, they typically charge around $30. When the regulation goes into effect in 60 days, it’s projected to save consumers $10 billion a year. The credit card corporations can charge a higher fee if they can show that their actual collection costs are higher. Nonetheless, the credit card corporations have announced they will go to court to block the fee cap. [1]

In a separate report issued in February, a Consumer Financial Protection Bureau analysis found that large credit card issuers charge customers higher interest rates than smaller ones. They estimated that a customer of one of the 25 largest credit card issuers with an average balance of $5,000 could save $400 to $500 a year by shifting to a small credit card issuer. [2]

STORY #2: An update on a short take in my 2/1/24 post: The Republican Governor in one of the 15 states that was refusing to provide federally-funded food to 8 million very low-income children this summer has changed his mind. Nebraska Governor Pillen has agreed to accept $18 million from the U.S. Department of Agriculture to pay for food for about 150,000 children this summer when they won’t be in school and receiving the free or reduced-price meals they get there. Despite Governor Pillen’s previous statement that he didn’t “believe in welfare,” after hearing from students, a bipartisan group of state legislators, pediatricians, and anti-poverty groups, he changed his mind. He said the change was due to “an evolution of information” about how children would be affected by his decision to forego the food assistance of about $40 per month. Nebraska legislators noted that this showed that grassroots “voices make a positive difference” and called it a “HUGE win for Nebraska’s kids, families, … and small businesses.” [3]

STORY #3: State to state comparisons show that unions improve workers’ pay and benefits and do NOT reduce job growth or hurt a state’s economy. Nonetheless, 26 states have so-called “right-to-work” laws that undermine unions. The advocates for these laws claim that they promote job growth, but there is no evidence for this. “Right-to-work” laws prohibit unions from requiring workers to join the union or to pay the union a fee similar to union dues at a unionized job site. Therefore, workers can receive all the benefits the union provides – from increased pay and benefits to improved working conditions and grievance procedures – without having to pay for them. Not surprisingly, this undermines the union’s membership numbers and finances. Nationally, about 10% of workers are in unions, while in states with long-standing “right-to-work” laws (since before 2010) only 5% of workers are in unions. In states without “right-to-work” laws, over 14% of workers are in unions. [4]

Workers in states without “right-to-work” laws are paid 3.2% more (about $1,700 more a year for full-time work) than workers in states with such laws. They are also more likely to have employer-supported health insurance and retirement benefits. Furthermore, unions reduce job-related racial and gender inequities, as well as income inequality in general.

STORY #4: At 18.6%, the immigrant portion of the U.S. workforce was at a record high in 2023. However, immigrants are NOT hurting the job prospects and incomes of U.S.-born workers. Here are three key facts (among others) that support this statement:

The 3.6% unemployment rate for U.S.-born workers in 2023 was a record low.
The 81.4% employment rate for prime-age workers (i.e., those between 25 and 54) is at its highest level since 2001.
The 83.9% labor force participation rate of those prime-age workers (i.e., those working or actively looking for a job) is at its highest level since 2002.

Furthermore, immigrants contribute to economic growth and increase government tax revenue. Without immigration, the U.S. population would decline, which would hurt economic growth due to a lack of needed workers. [5]

STORY #5: The tariffs President Trump imposed on China and other countries were a political success but a policy and economic failure – like many things he did. A nonpartisan study of U.S. employment data by industry found that Trump’s tariffs on China and other countries in 2018 did NOT increase the number of jobs in the industries protected by the tariffs as promised. However, they did lead to other countries imposing tariffs on U.S. exports in retaliation, which had a negative impact on U.S. jobs and our economy, particularly agriculture. The Trump administration was forced to respond by providing $23 billion in subsidies to farmers in 2018 and 2019, which only partially offset the harm caused by Trump’s tariffs. [6]

[1] Cowley, S., 3/6/24, “Federal rule caps most credit card late fees,” The Boston Globe from the New York Times

[2] Wilkins, B., 2/16/24, “New CFPB research spotlights ‘predatory’ credit card practices of big banks,” Common Dreams (https://www.commondreams.org/news/cfpb-credit-card-report)

[3] Conley, J., 2/13/24, “Under pressure from angry students, GOP Gov reverses on federal summer meals funding,” Common Dreams (https://www.commondreams.org/news/nebraska-summer-meals)

[4] Sherer, J., & Gould, E., 2/13/24, “Data show anti-union ‘right-to-work’ laws damage state economies,” Economic Policy Institute (https://www.epi.org/blog/data-show-anti-union-right-to-work-laws-damage-state-economies-as-michigans-repeal-takes-effect-new-hampshire-should-continue-to-reject-right-to-work-legislation)

[5] Costa, D., & Shierholz, H., 2/20/24, “Immigrants are not hurting U.S.-born workers,” Economic Policy Institute (https://www.epi.org/blog/immigrants-are-not-hurting-u-s-born-workers-six-facts-to-set-the-record-straight/)

[6] Swanson, A., 2/3/24, “Trump’s tariffs hurt US jobs but swayed voters, study finds,” The Boston Globe from the New York Times

CORPORATIONS ARE GIVING BIG MONEY TO ELECTION DENIERS

America’s biggest corporations are giving tens of millions of dollars to the 147 members of Congress who voted to deny the 2020 election results. They are making campaign donations to these election deniers, also known as the Sedition Caucus, both directly and indirectly through political action committees (PACs) and business groups. Despite concerns expressed by some corporate leaders about political and business or economic upheaval if Trump were to be re-elected, if one follows the money, it’s clear that these corporations and their leaders care more about their profits and political influence than they care about democracy.

The billions of dollars flooding candidates’ campaigns for the 2024 elections are not just corrupting policy making and the enforcement of our laws (see this previous post for more detail), they are also undermining our democracy.

In January, senior executives of America’s biggest corporations and other wealthy individuals attended the annual World Economic Forum in Davos, Switzerland, where the theme for the year was “Rebuilding Trust.” However, their hypocrisy was hard to miss. Some of them expressed fear of what a Trump re-election might mean in terms of political unrest and potential risks for businesses. However, they are providing substantial campaign funding for Trump and his acolytes in the Republican Party.

Since the January 6, 2021, Capitol Hill insurrection, 228 of the 300 largest American corporations that have political action committees (PACs) have given over $26 million to the 147 members of Congress who voted to deny the 2020 election results. In the immediate aftermath of the insurrection, numerous corporations announced to great fanfare that they would stop making political contributions to members of Congress who were election deniers. However, many of them have quietly resumed making donations to the election deniers, also known as members of the Sedition Caucus.

For example, Boeing suspended contributions but resumed making them four months later and has since given over $650,000 to 85 election deniers. The list of corporations suspending but then resuming contributions to election deniers includes Amazon, FedEx, Home Depot, Johnson & Johnson, McDonald’s, UPS, Verizon, Walmart, and Wells Fargo. In addition to contributing directly to the election deniers, they are also contributing to Republican Party PACs that support the election deniers. Furthermore, the known contributions are only the ones the corporations’ PACs are making openly and directly; many of them are also contributing to election deniers through vehicles that obscure donors’ identities such as business groups (like the Chamber of Commerce and industry-based associations), super PACs, and dark money groups that do not have to disclose their donors. [1]

If you’d like more detail, check out ProPublica’s database of contributions by Fortune 500 corporations to election deniers. It includes how much they’ve given, what percentage of their total giving it represents, who they’ve given to, and how long they kept their promise not to contribute to election deniers.

If business groups, like the Chamber of Commerce, are added into the calculations, these groups and corporate PACs have given over $108 million to election deniers since the January 6 insurrection. Over 1,400 such entities have given over $91 million directly to election deniers and another $17 million to PACs affiliated with them. The top ten contributors to the election deniers in 2023 are: [2]

American Bankers Assoc. $430,500
National Assoc. of Realtors $370,000
Nat’l Rural Electric Coop Assoc. $272,000
UPS $269,500
Boeing $257,500
Nat’l Multifamily Housing Council $255,000
Honeywell $251,000
AT&T $248,000
Lockheed Martin $239,500
Nat’l Auto Dealers Assoc. $236,000

The election deniers who received the largest amounts from these business entities in the first three quarters of 2023 are:

Jason Smith (R-MO) $2,007,185 Chair of the Ways & Means Comm.
(which oversees the budget & all fiscal matters)
Kevin McCarthy (R-CA) $1,740,000 Former House Speaker
Steve Scalise (R-LA) $1,549,300 House Majority Leader (2^nd in command to the Speaker)

The efforts by wealthy individuals and corporations to skew our policies, laws (and enforcement of them), economy, and society to their benefit are nowhere more obvious than in their huge contributions to political candidates. Apparently, they don’t even have qualms about donating to those who voted to block the democratic transfer of power. Needless to say, major reforms of our campaign finance laws are needed, along with the reversal of the 2010 Citizens United U.S. Supreme Court decision (and related ones). Those decisions equated the spending of money in political campaigns with the right to free speech and have given corporations free speech rights like those granted to human beings.

We must reform campaign financing, which is currently dominated by individuals and corporations with great wealth and, therefore, great power. Supreme Court Justice Louis Brandeis tackled those issues roughly a century ago. As a lawyer, often doing pro bono work in the public’s interests, he successfully took on Boston’s street car and light monopolies and got lower rates and better service. He challenged the power of big railroads, life insurance companies, and banks, as well as their wealthy owners.

Brandeis was a fervent supporter of democracy, saying “The end for which we must strive is the attainment of rule by the people.” He believed that democracy had to include economic freedom, not just political and religious freedom. He supported policies and actions that promoted the general welfare and opposed monopolistic power and special privileges or power for the wealthy.

Brandeis summed it all up by saying, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” How true these words ring today, almost 100 years later. [3]

[1] Reich, R., 1/18/24, “Davos duplicity,” Robert Reich’s Daily Blog (https://robertreich.substack.com/p/corporate-enablers-of-dictatorship)

[2] Massoglia, A., 1/11/24, “Corporate PACs and industry trade groups steered over $108 million to election objectors since Jan. 6,” Open Secrets (https://www.opensecrets.org/news/2024/01/corporate-pacs-and-industry-trade-groups-steered-over-108-million-to-election-objectors-since-jan-6/)

[3] Dilliard, I., editor, 1941, “Mr. Justice Brandeis: Great American,” with quotes from Lonergan, R., 10/14/41, “A steadfast friend of labor,” Labor (pages 42 – 43) (https://babel.hathitrust.org/cgi/pt?id=mdp.39015009170443&seq=9)

SHORT TAKES ON IMPORTANT STORIES #3: CORPORATE GREED

Here are short takes on three important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information.

STORY #1: Corporate profits have skyrocketed. They were roughly $12 trillion per year in 2022 and 2023. This is up from about $8.5 trillion a year in 2019 and 2020; a 50% increase in just three years. [1] (The graph linked to in this footnote is worth a thousand words.) This in large part reflects the price gouging large corporations engaged in in the post-pandemic years, claiming it was inflation. Their ability to inflate their prices and profits is due to the presence of just a few large corporations with monopolistic power in many markets in the U.S. economy. It also reflects squeezing workers to keep their pay low. [2]

This trend of high marketplace concentration, monopolistic power, and growing profits for large corporations has been going on for 40 years largely because of the failure to enforce antitrust laws. Corporate profits were $2.2 trillion per year in 2000, $1.1 billion in 1990, and $0.8 billion in the early 1980s. In other words, they are now over five times what they were in 2000, over ten times what they were in 1990, and 15 times what they were in the early 1980s.

In the last 20 years, marketplace concentration has increased in three-quarters of the U.S. economy with fewer corporations controlling more of the market than ever before. The good news is that the Biden administration is reviving enforcement of antitrust laws. It’s tackling price fixing in the meat industry – where four corporations control roughly 70% of the market. It’s suing Amazon for its monopolistic practices. It’s blocked the merger of JetBlue and Spirit Airlines as well as other mergers that would have increased concentration and monopolistic power.

Notably, the Biden administration initiated the first major antitrust case in 25 years that targets monopoly power. It charges Google with monopolizing the search engine market. The U.S. Department of Justice has been joined by 50 states’ attorneys general in the case. As the trial began, Google asked to keep the proceedings and evidence confidential and the judge was quite compliant. Google typically claimed the information represented business secrets that would harm the company if made public. In particular, Google tried to keep secret the dollar figure central to the whole case: how much it paid smart phone and computer companies to make its search engine the default on their devices. Six weeks into the trial, media representatives and transparency advocates filed a motion challenging the unprecedented secrecy and obstruction of public access to the trial’s proceedings and evidence. The judge responded by making much more information publicly available, including the amount Google was paying to have its search engine be the default on a wide range of phone and computer products and, therefore, effectively the default search engine across most of the Internet. It was a stunning $26.3 billion in 2021 alone. [3]

STORY #2: Chief executive officers’ (CEO) compensation is exorbitant and does not reflect their skills, their productivity, or competition for good candidates for the CEO position. Rather, it reflects CEOs’ power over their Boards of Directors and the lack of any counter weight to such unwarranted influence. CEO compensation declined slightly in 2022 because of weak stock market performance, which reduced the value of stock-based compensation. However, over the last 45 years, CEOs’ compensation is up over 1,200% (adjusted for inflation) while a typical workers’ pay is up 15%. CEOs are now paid 344 times as much as a typical worker, up from 21 times worker pay in 1965. [4]

The most egregious example of exorbitant CEO pay is the 10-year compensation agreement for Elon Musk approved in 2018 by Tesla’s Board of Directors. It’s potentially worth $56 billion. A shareholder sued and a judge just ruled that this level of compensation was unfair to shareholders. Tesla’s Board has only eight members and many have close personal ties to Musk (such as his brother) and therefore don’t have the degree of independence required for a publicly traded company. The compensation package would have allowed Musk to buy 304 million shares of Tesla stock for about $23 each. Over the last 3 ½ years, the stock’s price on the market has always been over $100, hit a high of $400, and has generally been around $200 per share – far above the purchase price of just over $23 given to Musk. [5] [6]

STORY #3: Our tax system needs to require wealthy CEOs and other wealthy individuals to pay their fair share in taxes. To achieve this, fair taxes are needed on income, including capital gains (i.e., the profit from selling stock). Without a fair and well-enforced national tax system, the wealthy play games to avoid national and state taxes. Recently, Amazon founder Jeff Bezos announced that he’s moving his official residence from Washington state to Florida. (He just bought two mansions for almost $150 million on a literally gated island near Miami.) It appears that his motivation for the move was to avoid a new 7% capital gains tax that Washington state has enacted on the sales of stock worth over $250,000. Bezos has been selling about 50 million shares of Amazon stock each year generating roughly $8 billion a year in income that was previously untaxed in Washington. He will save roughly $600 million a year by moving his legal residence to Florida, which has no income tax and no tax on capital gains. Washington enacted its capital gains tax to make its tax system fairer. Prior to its enactment, Washington’s state tax system was rated as the most regressive in the country. With this new, fairer tax system in place, Florida is now the state in the country with the most regressive state tax system. [7]

[1] Federal Reserve Economic Data, 12/21/23, “Corporate profits after tax,” St. Louis Federal Reserve Bank (https://fred.stlouisfed.org/series/CP)

[2] Reich, R., 2/16/24, “Where are record corporate profits coming from? Your thinning wallets,” Reich’s daily blog (https://robertreich.substack.com/p/corporate-soaring-profits-are-from)

[3] Goldstein, L., 11/28/23, “The secret trial,” The American Prospect (https://prospect.org/justice/2023-11-28-google-secret-trial/)

[4] Bivens, J., & Kandra, J., 9/21/23, “CEO pay slightly declined in 2022,” Economic Policy Institute, (https://www.epi.org/publication/ceo-pay-in-2022/)

[5] Chase, R., 1/31/24, “Elon Musk cannot keep Tesla pay package worth more than $55 billion, judge rules,” The Boston Globe from The Associated Press

[6] Hals, T., 1/31/24, “Judge voids Elon Musk’s ‘unfathomable’ $56 billion Tesla pay package,” Reuters

[7] Johnson, J., 2/13/24, “Tax-dodging Jeff Bezos to save $610 million with move to ‘Billionaire Bunker’ in Florida,” Common Dreams (https://www.commondreams.org/news/jeff-bezos-billionaire-bunker)