Corporate Greed Fuels 'Occupy Wall Street' Protests

Friday, 07 Oct 2011 03:04 PM

By Arnaud de Borchgrave

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The average person has a great deal of trouble understanding why and how a board of directors can fire the chief executive officer after less than one year on the job — and award him $13 million in severance for screwing up.

The way Hewlett-Packard's Leo Apotheker's contract was written made it more profitable to fail than succeed.

And this believe-it-or-not, pay-for-failure news came just three years after Wall Street's chief executives walked away with hundreds of millions of dollars after plunging their companies into a sea of red ink — and driving the economy into a tailspin.

A top trader at the height of the 2008 recession was awarded $70 million as a year-end bonus, which he turned down, complaining that it cheated him out of what he should have been rewarded by one of America's most prestigious Wall Street firms. So he walked out, started his own hedge fund and made $200 million for himself the first year.

These outlandish sums for one individual go on in most financial houses — and produce little for the economy.

Oswald Grubel, the head of Switzerland's largest bank — UBS — was recruited out of retirement in 2009 and canned two months ago after one of his employees blew $2 billion in unauthorized bets on stock index futures. And this was after his board told him top priority should go to wealth preservation at the expense of speculative plays.

Bank of New York Mellon, the world's largest custody bank, was sued for $2 billion by New York state and city officials for allegedly defrauding pension funds with currency transactions.

Lightning-quick trades with dernier cri sophisticated speed-of-light machines are elevating individuals to private plane-big boat-big house status in pricey gated communities in choice locations at home and abroad.

U.S. companies have hoarded a massive $2 trillion in cash as a hedge against recession, which has led to under-investment. And fewer jobs for the companies that didn't hoard and are trying to borrow to expand — and create new jobs.

The Wall Street Journal reported that the gap between what workers and top executives make "helps explain why income inequality in the United States is reaching levels unseen since the Great Depression."

At Discovery Communications, CEO David M. Zaslav's compensation rose from $7.9 million in 2008 to $11.7 million a year later to $42.6 million in 2010, making him the highest paid executive in the Washington area. And at Countrywide Financial, then-CEO Angelo Mozilo earned $180 million "as he led his company to the brink of ruin during the five years before the housing bust," the Journal reported.

Next to this slice of America there are many who can't find work, have lost their homes and are on food stamps — 26.4 million. And there are 17 million youngsters who can't repay student loans and men and women in their 50s who have been laid off and can't find work.

In some public schools in Harlem, 85 percent of students live in poverty and qualify for free lunch — and more than half of them don't graduate. School support staffs have been laid off.

An African-American president hasn't managed to pre-empt the resurgence of two Americas with a shrinking middle class in the middle.

The predatory subprime mortgage lending rackets of 2008-09 are still around. In 2010, foreclosure notices hit 2.9 million properties and 1.2 million in the first six months of 2011. Many owners are old and ill and missing their doctors' appointments or letting prescriptions go — anything to save a little money to eat. One-third of homeowners in depressed areas suffer from depression themselves.

In one survey of 395 mortgage counselors, 37 percent said they had worked with at least one homeowner in the previous month who was contemplating suicide. As much as we would like to pooh-pooh the unacceptable face of free enterprise as the lucubrations of leftist agitators, the reality is there for anyone who cares to look.

The only surprise about the anti-capitalist "Occupy Wall Street" revolt is that it didn't happen before, generated by Hollywood's seemingly endless flicks "casting financiers as the demonic villains of society," writes author Edward Jay Epstein in his new book, "The Money Demons: True Fables of Wall Street."

As an example, Epstein cites the Warner Bros. political thriller "Syriana" in which "the villain isn't al-Qaida, an enemy state, the mafia, or even a psychotic serial killer. Rather, it's the big oil companies that manipulate terrorism, wars, and social unrest to drive up oil prices."

One month after the left-leaning movement got under way, thousands of "Occupy Wall Street" protests had spread to the country's major cities. They were already seen as splitting the Democrats as the tea party had split the right.

The anti-Wall Street movement slowly gathered support from labor unions and community organizers. One labor organizer told a TV interviewer he had just returned from helping to organize workers in Tunisia. The slogan "Money talks, 99 percent walks" was a reference to the top 1 percent of 310 million Americans who control 42 percent of the nation's financial wealth.

The average unemployed lifeline benefit of $300 a week reaches only 70 percent of the poverty line for a family of four. There are 7 million fewer jobs in the U.S. economy today than when the recession started in December 2007. That translates into 4.3 unemployed workers for every available job.

Recently graduated students who couldn't find a job and were unable to repay government student loans, and self-proclaimed socialists and "progressives" — a word co-opted in the early days of the Soviet revolution to indicate that anti-communists were anti-progress and therefore reactionary vermin — can produce a lethal mix for a critical mass.

Corporate greed and popular anger fuse with a recent Pew poll that indicates a staggering 86 percent of Americans both angry and frustrated with the federal government. Similar demonstrations are taking place in widely scattered parts of the European Union, from Portugal to Greece.



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