Protecting workers from profit mongers
As lawmakers work on Capitol Hill to resolve the economic crisis, working-class people wonder if their interests are being protected. Commentator Kathleen Denny thinks profits are the main attraction.
Commentator Kathleen Denny (Courtesy of Kathleen Denny)
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TEXT OF COMMENTARY
Steve Chiotakis: This week, President-elect Obama and Congress are working on a new stimulus package. Billions for middle-income tax cuts and infrastructure improvements. Something, they say, to get the economy moving again. Commentator Kathleen Denny would like that, too. She is an out-of-work airline mechanic. And Denny says lawmakers should remember working people as they craft away on Capitol Hill.
Kathleen Denny: My Aunt Bee says there's going to be a depression. Last year, when pundits barely whispered "recession," she knew the signs: Big mergers and big layoffs.
I think Aunt Bee is right. From where I stand, things have been getting worse for a long time. Working-class people like me, we paid for what they called prosperity. Profits and the stock market soared while we paid in wage cuts, lost benefits, more dangerous workplaces.
What I care about is protecting people like us from people like them. Who's them? The people who own banks and big companies. They're not in business to provide us with jobs, health care or a dignified old age. Their business is profits, nothing else. They're lined at the trough for even more multibillion-dollar handouts from the Treasury, but when they talk about economic recovery, they only mean profits, not people.
With that kind of money, people like us could set up a public works program at union scale to take care of human needs and defend our resources. We could go to work alongside family farmers to supply healthy food; build schools and public transit; restore streams and maintain our public spaces.
And our dignity through old age is precious, far too precious to be glued to stock market swings or the fortunes of any one company. The company I worked for dumped our pensions outright, and the stock market dive rocked Aunt Bee's pension fund. We need a movement now to make Social Security a universal retirement program. Social Security was born in the labor upswing of the Great Depression, and people like us have unfinished business.
Chiotakis: Commentator Kathleen Denny lives in Oakland, Calif.
Comments
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From Columbia, SC, 01/09/2009
Ms. Denny is right on, and right on time. I would like to think the prevailing culture of greed will end with the current (fill in the blank) ___ession, but I know that as long as "free enterprise" is interpreted by the self-centered majority in this country as a license to steal, there will continue to be a war between the haves and have nots. Twenty years ago, I had no money but considered myself a member of the middle class because I worked hard and felt that I had a future. Now, although I have maintained a job with excellent benefits for ten years, I am close to being homeless. I know that there's no guarantee on my retirement funds and even with my "good" health insurance, I cannot afford healthcare. It's wonderful to assume that everyone is 22 years old and both physically and mentally able to cope with disaster, but most of us are old and getting older every day. I am more than tired of people telling me I should work harder. Until recently, I had three part-time jobs in addition to my full-time job, and believe me, I was no better off than I am now. The fact that I am highly educated only makes my mind better; it does not lower my rent.
From Oakland, CA, 01/06/2009
I think those here who extol the profit system do not know where profits come from: it is the difference between the value created by labor and the value paid to the creators. Rich people get rich by owning other people’s labor. The more of that labor you own and the less you have to pay for big amounts of it the richer you get.
Machinery and raw materials do not add any new value to a product, they only impart their costs to the product. It is workers who add the new value.
But there is a problem with this set up and it is what has led us to the present crisis. As anyone who works in any factory over a period of time can see, the ratio of machinery to workers increases. The machinery makes work more productive so less workers are needed to produce as much or even more. But that means, over time, the amount of labor in each product is less than before, hence the rate of profit falls.
In the 1970s the average rate of industrial profit in the United States was around 8%. In the 1990s it was around 4%. So what is a capitalist to do? It’s getting harder to make a buck!
So if investing in productive capital doesn’t give good returns, then invest it in fictitious capital: derivatives, hedge funds, real estate, repackage mortgages!
This works so long as there is another capitalist that will buy the play money. But as we have seen, this balloon has popped. And because fictitious capital is completely intertwined with productive capital millions will suffer.
Ms Denny comments were right on.
01/06/2009
I take exception to Kathleen Denny's sweeping generality that "people who own ... big companies (are) not in business to provide us with jobs, health care or a dignified old age. Their business is profits, nothing else."
While I know that there are companies whose motives are dominated by profit (the 'shareholder' point of view), I know of and have worked for companies who are squarely in the 'stakeholder' camp. Of course these companies cannot operate without profit, but I know first hand how they balance the needs of ALL stakeholders (employees, suppliers, customers, partners, communities, and the environment, not just shareholders). This philosophy is usually explicit in the companies' missions and values statements, and believe it or not, some companies do walk the talk. I personally have seen decisions which have been very disruptive to operations and detrimental to the bottom line made specifically to preserve jobs and employees' dignity in keeping with a core value of "Trust and Respect".
I hope Ms. Denny has a chance to work for a company who truly values their employees; I know they are out there.
From Gaffney, SC, 01/06/2009
I feel sorry for Ms. Denny and her Grandmother. While they had the good jobs, what did they do to improve their position in life?
Did they buy cheep foreign imports (that just ends up in the dump) while forcing companies to move overseas to be more competitive?
Did they demand more wages for less work, and more benifits for retirement and healthcare; while they spent all of their income on bad food and luxery goods? Did their union collective force their company to move overseas to afford to be able to provide cheaper products?
Did they not save any funds for retirement, instead depending on a company or the government to take care of them?
In the United States you have the choise to be the Working Class or to be the Investing Class. Yes your company or your government was supposed to help you with that and they did not. You could have helped yourself, like many Americans. Now you want to trust the government to make Social Security a Universal Retirement System? I guess your grandmother forgot to tell you that you get what you pay for. My retirement is fine because I put away my own hard earned funds and took the responsibility and risk to learn to manage these funds. Who do you think owns most of the stock of companies in the world? Other people's retirement funds.
The market is collapsing due to the programs put in place after the last Great Depression. The government has been deflating the value of money for years to pay for National Socialist Programs. Progressively larger and larger bailouts will not solve the problem, they only push the problem off to a later date and make it worse.
In this county, even a lady who just iron clothes for a living has become a millionaire by buying small parts of company stock and learning how to manage her savings. If you would stop thinking like a Marxist and take responsibility for yourself, you also could be part of the Investing Class instead of just the Working Class. It is never to late to start over. For a little incentive, just visit people who depend on the government retirement program called Social Security.
From Olive Branch, MS, 01/06/2009
There is some truth to what Ms. Denny said, but not much.
Some of this sounds like something from the 60’s: “We could go to work alongside family farmers to supply healthy food; build schools and public transit; restore streams and maintain our public spaces.” (hold hands, sing kumbaya, form a commune, etc.).
I do wish she would have elaborated further on her idea of a universal retirement program. I am behind anything that doesn’t involve the government. Social Security is a joke and personally, my savings are doing just fine and the stock portion will recover well before my old age. I do not plan on retiring, so I am only saving for a time when I cannot physically work.
There have been some good points brought up in the comments section. We do need to produce more in America and purchase those items here. Unfortunately, the cost of production in the U.S. will not compete against the third world. In the stores, consumers will not typically buy quality if they can get by with “cheap” (except durable goods).
Chris Mills made an excellent point. Both parties are operating out of the same playbook. They have seen that it is easy to rule people by fear then form an ever-increasing nanny-state (see writings of Marx).
I beg you to remember what it is like to be self-reliant.
From Houston, TX, 01/06/2009
I agree with Ms. Denny. I've worked in corporations both large and small. And I've worked in government agencies. Some managers know who keeps the organizations humming -- and it's not the short-tenured CEOs -- but most have a higher regard for the balance sheet than they do for the people who created it. Friends with 20 years of experience have to accept having their pension withdrawn if they want to stay employed so that the company can meet its profit objectives. Are the profit objectives reasonable? Are they more important than the people who produced the profits in the first place? We should strive for all workers to be well-paid, not just a few.
From LaFayette, NY, 01/06/2009
Ms Denny hit the nail right on the head. Financiers and corporate CEOs are not in business to provide jobs, health care or a dignified old age. Their only concern is to make the bottom line look good. This is exactly why trickle-down economics doesn't work. The current economic/credit crisis is an example of capitalism allowed to run amok - creating the appearance of assets when in fact none really existed. Why did the $750 billion bailout fail to stimulate the credit market and the economy? Simply stated by the pundits, banks are hesitant to loan money to other banks because "they are not sure which banks might fail". In other words, juggling the ledgers to make it appear that a financial institution actually had real assets instead of worthless paper was so pervasive that every bank has become suspect. (Not to mention that a good portion of the bailout money went to pay dividends to the stockholders of the failing companies ????). Of course the system had to collapse sooner or later. My only solace is that the Bush administration failed in its attempt to encourage rampant capitalism by privatizing Social Security. At least we have something to fall back on now that our 401k's are worthless.
From Cookeville, TN, 01/06/2009
Mr Weeks those were good comments.
As I have grown up the differences between the party messages have diminished. They still have a different style but it is one group of rich people working for my vote vs another group of rich people with about the same ideas about things.
It may be that in order to appeal to the same groups of voters, the campaigns need to sound the same.
Yes I also see a time where it is more about class differences than political differences.
Hopefully alot of the insults being bantered around during this election about socialists, communists, and Soviet this or that will fade and good, constructive discussion can begin in earnest. FWIW I feel once a country gets to a certain population size there are times when liberal politics make a little more sense. The values can be the same but there just has to be more planning laying out how we live together. When a group of people live together out in the country then anything goes (conservatism) but as the population grows and the neighbors live ever closer then there has to be more planning and discussion about new rules and I realize to some folks this seems alot like socialist government.
I see myself as neither conservative (at least what it has become in the past 15 years) nor liberal though I think both have some good ideas that need to be listened to. What bothers me is people on both sides - recently mostly Republicans b/c of the election - trying to stamp out real discussion by flinging liberal insults. What does that get us? Okay those folks are unhappy Mr. Obama won. I get the message. Now let's move on.
Funny how we generally agree that "Buy American" is a good idea but folks continue to spend vast amounts of money at stores which buy most of their inventory from Chinese factories.
I would like to see more production return to the USA and be able to buy products that are creative (we have them in the stores today, lets make them here), durable, and at a reasonable price. Nobody is going to settle for shody products with little creativity built into them even if they ARE made in America.
I'm not sure if we can do it anymore though with workers striking for ever higher wages, expensive management pools, and shareholders pushing for higher payouts. Another problem is people job hopping trying hard to get a better wage. Alot of expertise goes with those folks and a company mjay have a large investment in training those people.
Can we afford to entice folks to stay put for a decade or more at a time? The only way I could get significant wage increases in this small town was to change jobs repeatedly. I always got good job reviews, never got more than a couple precentage points above a COL raise and that isn't much when a person is at entry level pay.
I would like to see the good values of the "Waltons TV show" return but I'm not sure that I want to live like that.
That said we are living in a small town by choice, planning a garden this spring, and always working towards simplifying our homelife (i.e. not keeping up with the current fads and technology. Making the most of what we already have. Buying what we want when a fad is over.)
From Cookeville, TN, 01/06/2009
Mr Weeks those were good comments.
As I have grown up the differences between the party messages have diminished. They still have a different style but it is one group of rich people working for my vote vs another group of rich people with about the same ideas about things.
It may be that in order to appeal to the same groups of voters, the campaigns need to sound the same.
Yes I also see a time where it is more about class differences than political differences.
Hopefully alot of the insults being bantered around during this election about socialists, communists, and Soviet this or that will fade and good, constructive discussion can begin in earnest. FWIW I feel once a country gets to a certain population size there are times when liberal politics make a little more sense. The values can be the same but there just has to be more planning laying out how we live together. When a group of people live together out in the country then anything goes (conservatism) but as the population grows and the neighbors live ever closer then there has to be more planning and discussion about new rules and I realize to some folks this seems alot like socialist government.
I see myself as neither conservative (at least what it has become in the past 15 years) nor liberal though I think both have some good ideas that need to be listened to. What bothers me is people on both sides - recently mostly Republicans b/c of the election - trying to stamp out real discussion by flinging liberal insults. What does that get us? Okay those folks are unhappy Mr. Obama won. I get the message. Now let's move on.
Funny how we generally agree that "Buy American" is a good idea but folks continue to spend vast amounts of money at stores which buy most of their inventory from Chinese factories.
I would like to see more production return to the USA and be able to buy products that are creative (we have them in the stores today, lets make them here), durable, and at a reasonable price. Nobody is going to settle for shody products with little creativity built into them even if they ARE made in America.
I'm not sure if we can do it anymore though with workers striking for ever higher wages, expensive management pools, and shareholders pushing for higher payouts. Another problem is people job hopping trying hard to get a better wage. Alot of expertise goes with those folks and a company mjay have a large investment in training those people.
Can we afford to entice folks to stay put for a decade or more at a time? The only way I could get significant wage increases in this small town was to change jobs repeatedly. I always got good job reviews, never got more than a couple precentage points above a COL raise and that isn't much when a person is at entry level pay.
I would like to see the good values of the "Waltons TV show" return but I'm not sure that I want to live like that.
That said we are living in a small town by choice, planning a garden this spring, and always working towards simplifying our homelife (i.e. not keeping up with the current fads and technology. Making the most of what we already have. Buying what we want when a fad is over.)
From NYC, NY, 01/06/2009
We've all heard this tiresome socialist rhetoric before and its always the same class warfare drivel. Even most of obama's supporters roundly reject the pseudo Marxist claptrap espoused by this paragon of the working class. America will recover and prosper and free market principles will be vindicated, much to the dismay of discredited social reformers worldwide. The only change we require is a swift return to the status quo ante. God bless America.
From Jordan, MN, 01/06/2009
I just listened to Ms. Denny's commentary as I neared work and while it seemed like a simple message, it was electrifying. We've abandoned an economy based on the production of real goods for an economy of paper gains (and games) while some people have gotten rich, it's not those of us who are actually making things and providing services. It has felt for three decades like we were inching toward class warfare as the disparity between the top and bottom rung has grown. As congress doles more and more of *our* money out to the people who aren't actually doing anything, I think those inches become yards. What happens when the people won't stand for any more? Who really believes that a trillion dollars disappearing into Wall Street is going to be a good thing (I mean, aside from those receiving the checks)?
It's exciting to think about massive sweeping change; revolution, even. But I have kids and a job and investments of my own and I think it would maybe be better to just put things back on track before it gets ugly.
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