Annual Fundraising Appeal
Over the course of 21 years, we’ve published many unflattering stories about Henry Kissinger. We’ve recounted his involvement in the Chilean coup and the illegal bombings of Cambodia and Laos; his hidden role in the Kent State massacre and the genocide in East Timor; his noxious influence peddling in DC and craven work for dictators and repressive regimes around the world. We’ve questioned his ethics, his morals and his intelligence. We’ve called for him to be arrested and tried for war crimes. But nothing we’ve ever published pissed off HK quite like this sequence of photos taken at a conference in Brazil, which appeared in one of the early print editions of CounterPunch.
100716HenryKissingerNosePicking
The publication of those photos, and the story that went with them, 20 years ago earned CounterPunch a global audience in the pre-web days and helped make our reputation as a fearless journal willing to take the fight to the forces of darkness without flinching. Now our future is entirely in your hands. Please donate.

Day12Fixed

Yes, these are dire political times. Many who optimistically hoped for real change have spent nearly five years under the cold downpour of political reality. Here at CounterPunch we’ve always aimed to tell it like it is, without illusions or despair. That’s why so many of you have found a refuge at CounterPunch and made us your homepage. You tell us that you love CounterPunch because the quality of the writing you find here in the original articles we offer every day and because we never flinch under fire. We appreciate the support and are prepared for the fierce battles to come.

Unlike other outfits, we don’t hit you up for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it.

CounterPunch’s website is supported almost entirely by subscribers to the print edition of our magazine. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners. We don’t clog our site with deceptive corporate ads.

The continued existence of CounterPunch depends solely on the support and dedication of our readers. We know there are a lot of you. We get thousands of emails from you every day. Our website receives millions of hits and nearly 100,000 readers each day. And we don’t charge you a dime.

Please, use our brand new secure shopping cart to make a tax-deductible donation to CounterPunch today or purchase a subscription our monthly magazine and a gift sub for someone or one of our explosive  books, including the ground-breaking Killing Trayvons. Show a little affection for subversion: consider an automated monthly donation. (We accept checks, credit cards, PayPal and cold-hard cash….)
cp-store

or use
pp1

To contribute by phone you can call Becky or Deva toll free at: 1-800-840-3683

Thank you for your support,

Jeffrey, Joshua, Becky, Deva, and Nathaniel

CounterPunch
 PO Box 228, Petrolia, CA 95558

The Worker-Capitalist Con

Wall Street’s Collapse and the Ownership Society

by PAM MARTENS

On February 24, 2005, I clicked on the evening news to see President Bush finishing his European tour in Slovakia, surrounded by children waving little American flags.  It had the feel of a Macy’s holiday window designed by Karl Rove.  I recalled a recent news item about Slovakia.  Just two months prior to the President’s visit, Slovakia initiated a plan to divert nine per cent of worker’s wages into private investment accounts laden with corporate stocks and bonds as an alternative to a government run social security program.

This was similar to a plan that President Bush had peddled under the banner of the “ownership society.” Fortunately, this was one of the rare occasions when the President was rebuked by Congress.

Today in the U.S., with both corporate bonds and stocks suffering massive losses and over $2 trillion of taxpayers’ dollars doled out by the Federal Reserve to shore up Wall Street firms in various stages of insolvency, we finally grasp the true meaning of “the ownership society:” the Wall Street execs absconded with the so-called profits; the little people own the losses; the next generation owns the bailout debt. This scheme makes Ponzi artist Bernie Madofflook like a piker.

The Slovakia plan was modeled after the program set up in Chile in 1980 and 28 other countries thereafter.  According to actuarial studies of the plans in Chile and Mexico, it was an asset stripping operation that allowed Wall Street firms like Citigroup to strip away as much as 20 to 25 per cent of the workers’ wages in fees to “manage” the money.

The Chilean plan was the brainchild of Jose Pinera, who served as Labor Minister under the brutal military dictatorship of General Augusto Pinochet.  Pinera later emerged as the global pied piper of private accounts to replace government run social security systems and peddled his pension reform mantra around the globe. 

In testimony before the U.S. Senate on June 26, 1997, Pinera explained how private accounts move workers to the corporate side of the table: “A typical Chilean worker is not indifferent to the behavior of the stock market or interest rates.  Intuitively, he knows that his old age security depends on the well being of the companies that represent the backbone of the economy.”  In Pinera’s book, The Bull by the Horns, he says the whole working population can become “shareholder capitalists.”

According to Pinera’s web site, www.pensionreform.org, (which is registered not to him but to the Cato Institute, a free market think tank) Pinera sat down in the Austin home of George W. Bush, then Governor of Texas, and mapped out his vision.

I had a chance to personally observe this worker-capitalist dynamic in action in August 1994.  I was working for the Wall Street brokerage firm, Smith Barney (which had been taken over by the large insurance company, Traveler’s) and was called to an employee meeting by the branch manager and a visiting V.P. from the corporate headquarters.  Employees were shown a new benefits plan that deferred anything we might hypothetically get in deferred compensation invested in company stock intothe distant future while dramatically increasing our expenses in the present. 

While the room was fuming, one of my colleagues spoke up.  He said since we’re getting deferred stock over time in the publicly-traded parent company (Traveler’s), and reducing company expenses will boost profits and push the stock price higher, isn’t this something we should support.  The room immediately calmed.  They had sipped the Kool Aid of shareholder capitalism.  (Traveler’s would eventually merge with Citicorp to become Citigroup and in 2008 require a backstop of hundreds of billions of taxpayers’ dollars to prevent the company from collapsing.)

I opted out of the stock plan. The fine print of this so-called Capital Appreciation Plan said the firm could keep two years of the wages I put into the plan if I was terminated for cause or left to join a competitor.  This sounded to me like shackled shareholder capitalism at best and theft of employee wages at worst.

Combined with Traveler’s, and later Citigroup’s, private justice system which barred employees from accessing the nation’s courts as a condition of employment (including whistleblower claims) it was all too Kafkaesque for me.  (Citigroup and most Wall Street firms enforce a system called “mandatory arbitration” which moves all legal claims against the firms into an industry run forum which is not required to follow the law, legal precedent or issue a written decision, making an appeal to a court almost impossible.)

On April 17, 2001, some dodgy looking police would whisk me off the public sidewalk in front of Citigroup’s shareholder meeting at Carnegie Hall in New York City and throw me in jail for my high crime of peacefully attempting to hand out flyers  highlighting Citigroup’s private justice system, Capital “Appreciation” Plan, and myriad abuses against women, minorities and society in general.

News media reported that shortly after my pesky personage was removed from the sidewalk, Citigroup’s shadow government (Board of Directors) emerged from their black limos: former President Gerald Ford; former Treasury Secretary Robert Rubin; former CIA Director John Deutch.  You can imagine my reaction on November 25, 2008 when the New York Post featured a photo spread of Citigroup’s Board of Directors (which included Rubin and Deutch) and a full front page titled “Citi of Fools.” The same issue carried an editorial urging an ouster of the Board (“Bounce These Bozo Bankers”) or perhaps a stronger remedy (“Off with their heads”). 

The uproar at The Post was over a weekend confab that saw the Federal Reserve guarantee upwards of $300 billion of taxpayer money to bail out Citigroup for the second time in a month and a half.  Of that amount, $20 billion was for a paltry equity stake for taxpayers when the whole company could have been bought for $20.5 billion at the prior Friday’s closing price, and that was $4.5 billion less than taxpayers had dumped into the company in October.  (It’s not a good omen that the man who helped put this deal together, Tim Geithner, President of the Federal Reserve Bank of New York, has been selected by President-elect Barack Obama to be the new U.S. Treasury Secretary; neither is it promising that Robert Rubin was standing at the elbow of the President-elect in his first press conference, signaling he’s a key advisor.)

What progressives need to focus on is that all of these private retirement accounts, IRAs, Roth IRAs and 401(k)s have one homogenous denominator: they are primarily invested in stocks and bonds of multinational companies that we in the progressive community frequently oppose on issues ranging from labor, environment or human rights degradation.  Our own money is being deployed in opposition to our goals.  We’re financing our own demise.

Is it any wonder we have watched union membership collapse?  Or have seen a giant swell in the ranks of corporate mandatory arbitration systems that block both the employee and the consumer’s right to redress in a court of law?   Is it any mystery why serious investigations of what led to these massive bailouts are missing in Congress; why there has been an absence of large-scale mobilizations and street protests, even in the face of losing an average of 48 to 54 per cent of one’s retirement assets in one year. Should we be surprised that the crooked and incompetent remain in their positions and get a bailout from taxpayers.

More than $31 trillion was lost globally in stocks from January 1 to December 2, 2008 while much of this country is stumbling around dazed, afraid to open their 401(k) and IRA statements, repeating the imposed mantra “I’m in it for the long haul.”

We’ve arrived at the finish line in the race to the bottom and it’s clear there are few  winners: once the little fish were eaten, the big fish fed on each other (Madoff’s  Ponzi scheme and assorted hedge fund frauds against the wealthy).  Now the big fish have no where else to feed but at the government’s bailout trough, transferring the debt-ownership society to our children.

Our own money is also being used against us in electing our President and members of Congress.  After subsidizing our corporate health care plan to boost corporate profits or paying for it outright and funding our contribution to our 401(k) plan, which provides a steady stream of cheap capital to boost corporate profits, we have little left to donate to political campaigns.  That makes it possible for Wall Street to fund the candidates of both major parties.  Our choice becomes corporate candidate A or corporate candidate B and Wall Street installs the money men at Treasury, the regulators and economic advisors to the President. 

But here’s the good news: Wall Street’s greed and corruption blinded it to its own fragile existence.  It completely neglected to notice that its survival was dependent upon the people it was looting.  By destroying its customer base, it destroyed itself.

The collapse of this strange species of financial Neanderthals in Armani suits is as breathtaking as are the opportunities it opens.  We can create a finance model from the ground floor up with our own vision of what we want the future to look like; what we want new companies to bring to market; how we want investors to be treated by their advisors.

We can start boutique firms to study young, socially worthwhile businesses and put the promising ones together with financial backers to bring forward as viable, publicly traded companies.  We can open schools to train men, women and minorities to become knowledgeable financial consultants and have a placement office to help them get started. (What does it tell you about a 200 year old industry that has no schools to train employees as financial advisors but hires instead on the basis of salesmanship.)   We can create independent regional firms all over the country to provide investors with the unbiased advice they crave from salaried employees who are not conflicted by working on commissions, as is now the norm, but get bonuses for how well their clients’ portfolios perform (currently unthinkable at major brokerage firms).

Out of chaos emerges opportunity. Are there those among us bold enough to seize it?

PAM MARTENS worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article.  She writes on public interest issues from New Hampshire.  She can be reached at pamk741@aol.com