Smart Bombs: The joke is on workers
From The Marx Brothers’ movie “The Cocoanuts”:
Hotel manager: “Wages? Do you want to be wage slaves? Answer me that!”
Bellhops: “No.”
Manager: “No, of course not. But what makes wage slaves? Wages!”
If it feels like this joke is reality, it’s because of the dreary state of paychecks.
Friday was International Workers Day, which is when most of the world celebrates what we call Labor Day. It’s held May 1 to commemorate the Haymarket Affair in Chicago. Believe it or not, riots flared in American cities long before events like Baltimore and Ferguson, Missouri, and African-Americans were largely on the sidelines.
The 1886 riot stemmed from rallies held by protesters demanding an eight-hour workday. A quarter of a million “radicals” streamed into the streets advocating for what is now the norm. On the third day, police killed two people, which sparked a protest against police brutality. At that rally, someone tossed a bomb, killing an officer. Police fired on the crowd, killing four more people.
After Haymarket, the union movement expanded around the world, and many workplace reforms were adopted. However, the power of labor has waned for the past 40 years, and income inequality is a byproduct of this lost influence.
The kind of income derived from packing a lunch and putting in eight hours has stagnated for decades, while wealth from capital has mushroomed. Plus, the tax code treats ordinary income more roughly than capital gains. This trend has gotten so out of hand that the chief executive officer of Black Rock, the world’s largest asset manager, sent a letter to some CEOs chiding them for rewarding shareholders in the short term at the expense of their workers and their companies’ long-term prospects, according to Andrew Ross Sorkin of the New York Times.
In his letter, delivered two weeks ago, Black Rock Chief Executive Officer Laurence Fink suggests that capital gains held less than three years be treated as ordinary income: “Since when was one year considered a long-term investment?”
According to Sorkin, “U.S. companies spent nearly $1 trillion last year on stock repurchases and dividends.”
If the government, via the tax code, stopped tipping the scales, it could mean an overdue raise for wage slaves.
Hot and Cold. If government were to price carbon, oil and gas companies would immediately feel the impact. So what does the industry think about global warming and possible solutions? Warren Business Consulting queried 474 insiders and came up with the following results, as reported by the Niskanen Center, a libertarian think tank:
Just over 74 percent of respondents said they were “somewhat sure” to “extremely sure” that global warming was occurring. Meanwhile, 9.4 percent said they were somewhat to extremely sure it wasn’t. When asked the cause, 57 percent said human activities, and 34 percent said natural changes. When asked the severity of the problem, 76 percent said somewhat to very serious, and 7.6 percent said not at all. When queried about a solution, the answer with the most support was a carbon tax.
Meanwhile, the heads of the relevant committees in Congress have declared that global warming is bunk, despite the judgment of scientific academies. On Tuesday, the head of the House Science, Space and Technology Committee, Rep, Lamar Smith, R-Texas, announced more than $300 million in spending cuts for NASA’s earth sciences programs, which includes the study of climate change and its effects.
I used to think political leaders needed to prod industry, but it may turn out to be the other way around.