The massive tax cut package passed by Republicans last year has not trickled down to workers, and it doesn’t appear that it ever will. While most of us understood this would happen, there were plenty of people who thought they’d get a cut of it. Some economists are now saying that we should restore the previous tax rates to corporations who can’t reign in their outrageous CEO pay. Ring of Fire’s Mike Papantonio and Farron Cousins discuss this.
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Mike Papantonio: The Republican tax cut has yet to trickle down to American workers at all and now some economists are saying that we should restore the previous tax rates to corporations who can’t reign in their outrageous CEO pay. Now look, okay, this all starts… it’s a story you and I have told so many times over the year. Workers are making a dollar and for every dollar that the workers making, the CEO is making $100,000.
I mean, that’s basically the ratio. Hasn’t always been like this, but what ended up happening is they came up with a system and the way the system works is the CEO puts together his board, his or her board of directors, basically. The board of directors, obviously they vote on whether or not a CEO gets paid, how much they get paid, what are the benefits, how much stock option. All of the great things.
These are their pals. You understand? This is like me saying Farron, would you be on my board and oh, by the way, would you vote for me to get a big pay raise? And oh by the way, would you vote for a great pension program? So these boards, first of all, 99 percent of the time, they’re never going to be voted out.
Farron Cousins: Right.
Mike Papantonio: You understand that? You got a board 99, literally 99 percent of the time, they’re never going to be voted out. I mean they have to go murder somebody to be voted out. Tell us about these boards to begin with. You did a great story one time that talked about how this board member goes to this company. This board member goes, it’s like this family, this incestuous family of people looking out for CEOs of corporations, take it from there.
Farron Cousins: Right. There was a, and I wish I remembered the source of it, but they mapped out this beautiful chart and it showed that, you know, usually a board member for a corporation will sit on four or five different boards because these are not full time positions. You don’t go in every single day and sit for meetings. You meet once a month, maybe twice a month. And so you have the same people and a lot of media companies are on here, that’s why we’ve got so many problems with the media, because they’ll go on Monday and they got their board meeting with Exxon. Then on Thursday they got their board meeting for the New York Times.
Mike Papantonio: These board of director types?
Farron Cousins: Right and it’s the same person, I think actually Pfizer is the one that has the incestuous relationship with New York Times.
Mike Papantonio: There’s several of them, yeah.
Farron Cousins: But that’s the way it is. So Merck has a seat at the table for New York Times and New York Times has a seat at the table with Exxon and Exxon has a seat at the table with Wells Fargo. Now I’m just using those as an example, I’m not saying they 100 percent, those are the people. But that’s how the boards work.
Mike Papantonio: Yes.
Farron Cousins: You share your board members with everybody else.
Mike Papantonio: Right.
Farron Cousins: And so they’re the same people who get paid tens of millions to go around and you know, basically rubber stamp whatever it is the CEO wants. Now, what’s interesting about this story, about, you know the proposal to reinstate the tax code to what it was versus what it is after the past year, Dean Baker at Truthout, is talking about doing it not just for the safety of the workers but for the shareholders because they’re also getting screwed over in all of this because they, that is money that if it weren’t going to, the CEO would be redistributed.
Mike Papantonio: Okay. You want to hear… I’ve just got through with a series of depositions on the opioid case and that’s why it makes me think about this. There’s a guy named Hammergren who was the CEO for McKesson, okay. Now, McKesson was one of the key companies that created the opioid catastrophe in America. They were selling, they were illegally selling narcotics all over the country.
They knew they were selling it. Hammergren was in charge while it was going on. It was so bad that McKesson had actually internalized the illegal sale of their narcotics. Oxycontin, Oxymorphone, all of these narcotics that they were distributing to pharmacies. They understood that a huge amount of that was not reaching where it’s supposed to go. For example, there’d be a city with maybe a thousand people in this city, okay, and McKesson would distribute 6 million pills to the city.
Well, they knew that a thousand people couldn’t absorb 6 million pills. So they understood that it then became something called the Oxy Express. Take a look at it, it’s an interesting story, but Oxy Express ran all up the eastern seaboard. Now, so Hammergren started making the company billions of dollars basically illegally. I mean they knew they were breaking the law. So they give Hammergren $680 million dollars in compensation, $680 million dollars because he was willing to do what most CEOs wouldn’t do. Now most honest CEOs is going to say, you know what, because of what we’ve done, 150 people are dying every day.
Probably we shouldn’t do that. But the board of directors said, yeah, let’s give him this money. Then the shareholders, thank goodness, said uh-uh, that ain’t gonna work Mr. Hammergren. You know what you’ve done to our company, it’s going to cost us billions of dollars to get out of this problem. We’re going to have to pay for it. So they’re actually suing Hammergren and they’re suing the board of directors to get the money back.
Farron Cousins: Well, that’s what needs to happen. It needs to happen at more places than just you know McKesson because right now we do have CEOs who make the decisions, yeah, we can poison this entire Ohio community with our, with our DuPont poisoned or whatever it is. Or Monsanto doing it or Bayer doing it and they get rewarded. Meanwhile, 10 years from now, 5 years from now, in some cases, the shareholders are the ones who they lose tons of money in their stocks, tons of money in their holdings of the company because of the multibillion dollars in some cases, lawsuits because, oh, that guy who got his golden parachute and left us three years ago, he also gave 10,000 people cancer and so now we’re on the hook for that while he’s retired down in Cayman.
Mike Papantonio: Well, let me tell you what else is being affected. The entire stock system is being affected. You know, a lot of people watching the show, maybe they don’t, they’re not part of the stock market, but the people who are the, you know, there’s a lot of mom and pop pension programs that rely on the stock market. Okay. If you go back, this story does a great job, Truthout again does a great job saying that there was a time in the 40’s up to the up to maybe the 70’s, the late 70’s when you could be in the stock market and you could maybe count on about 8 percent return if you were, you know, if you did things right. Now, no matter how much you do right, and it’s been like this for a very long time, you’re going to get 4 percent. I mean, if it comes to paying pensions for mom and pop, why is that?
The connection is very obvious. I mean, you know, you’ve got CEOs that are making decisions that are affecting the infrastructure of the stock market. And so I think this story goes well beyond, gee whiz, we’re paying CEOs too much money. I think what has to happen is you’ve got to. There’s got to be some laws that talk about the pay scales of these ceos and the shareholders need to take control of their companies again, because they’ve lost control of their companies.
Farron Cousins: Absolutely, and there needs to be some kind of retroactive, you know, liability for these CEOs for what they do to the companies.
Mike Papantonio: Well talk about that, that’s brilliant. Talk about that a little bit.
Farron Cousins: Well, here’s something, and this is, you and I have talked about this dozens of times in the past, but back in the 80’s and before that, CEOs would come to a company and they’d stay there for 20 years.
Mike Papantonio: Right.
Farron Cousins: The average lifespan of a CEO now at a major corporation is 3 to 5 years, but they don’t just retire. They then go to a different corporation. They do the same kind of scam. Get as much money for me, if I mess up consumers, if I create a bunch of liabilities for the future of this company, that’s fine, because by the time I’m done here, I’m going to Merck or I’m going to Exxon.
Mike Papantonio: It’s called. There’s actually a name for it. It’s called a quick profits massive risk.
Farron Cousins: Yeah.
Mike Papantonio: That is the term, it’s terminology. And they actually teach this in MBA school. They say, look, you’re passing through, and it used to be you weren’t just passing through. The decisions you made in year one would affect how you were compensated in year 15, but now that’s all changed.
Farron Cousins: Right.
Mike Papantonio: It’s quickly moving through. It’s like musical chairs isn’t it?
Farron Cousins: Exactly, and a lot of times these CEOs, the decisions they make, especially the bad ones, you don’t even know about those consequences ‘til long after that person has left. Now they knew about it. They knew how bad it would be for the company, but they also knew they weren’t going to be a part it when those bad consequences came to light, and that’s why they get their golden parachute. They’d get their $680 million dollars and they’re out the door.
Mike Papantonio: And somebody who’s sitting there saying, ah, so what, it doesn’t affect me. It does affect you. It affects the pay scale than a worker gets. If you’re giving an extra $20 million dollars to a CEO, you know, it means you got employees there that can’t make an extra $2,000 because all the money’s going to the CEO. Or if you are working in the company and you have a pension with that company, these thugs are affecting your pension. So to say, oh, this doesn’t affect me, you’re not thinking clearly.