the 1 percent

Retirees Occupy Century Aluminum

Leo Gerard — Tue, 31 Jan 2012 09:48:55 -0500

On Dec. 18, a dozen retirees, men and women in their 60s, 70s, even 80s, began occupying a median strip along Route 33 in front of the closed Century Aluminum smelter in Ravenswood, W.Va. In tents and under tarps, a small group stays overnight, despite hypertension, arthritis and other old age ailments. One has suffered a stroke.

These vulnerable people expose themselves to weather extremes although some have no health insurance at all. Century cancelled it. That’s why they’re occupying Century.

The retirees labored their entire lives for wages and pensions comparably lower than those of other aluminum workers. They did it believing they made those sacrifices in exchange for good, lifelong health coverage. Over the past two years, however, Century evicted them, about 540 retirees altogether, from the insurance plan.

The betrayal burns. Executives at Century, corporate 1 percenters, committed the same sort of treachery that is being condemned by Occupy Wall Street demonstrators representing the victimized 99 percent across the country. Thus the retirees adopted the grandchildren’s protest tactic of encampment.

Century shuttered the 50-year-old Ravenswood smelter in February of 2009, throwing 651 workers out of jobs. Century, headquartered in Monterey, Calif., didn’t go bankrupt though. It still operates aluminum plants in Kentucky, South Carolina and Iceland. And it didn’t immediately cancel promised insurance for retirees.

Nine months after the shutdown, it announced it would terminate as of June 1, 2010 health benefits for retirees eligible for Medicare. Then on Nov. 1, 2010, Century told its retirees who weren’t yet eligible for Medicare that it would stop paying for their coverage as of Jan. 1, 2011.

This revoking of earned benefits isn’t an isolated incident or a fluke. It is part of a pattern documented by Wall Street Journal investigative reporter Ellen E. Schultz in her new book “Retirement Heist.” The subtitle is, “How companies plunder and profit from the nest eggs of American workers.

She describes in gory detail how corporations raided worker pension accounts, siphoning off surpluses that would be needed later to prop up plans damaged by the Wall Street collapse. She provides detailed accounts of executives gouging the funds to pay for their own exorbitant retirement packages. She tells of corporate executives ending retiree health insurance and freezing pensions but deceptively calling the changes improvements, so that CEOs could pump up company profits with money that had been pledged to workers.

While breaking promises to workers and violating contracts, these CEO 1 percenters falsely portrayed themselves as beleaguered champions of workers, valiantly attempting to preserve underfunded pensions. Like Costa Concordia Captain Francesco Schettino saving himself while abandoning passengers on his sinking cruise ship, the captains of industry padded their own pockets with pension and health care funds intended for retirees, then deserted the workers. Schultz describes the CEO scams this way in the book:

“In reality, they’re the silent pirates who looted the ships and left them to sink, along with the retirees, as they sailed away safely in their lifeboats.”

Most of the Costa Concordia passengers survived, but more than a dozen drowned. In West Virginia, most of the retirees are still kicking. A leader among the Century occupiers, Karen Gorrell, explained:

“We may have one foot in the grave, but we are kicking like hell with the other.”

But some have succumbed. Gorrell, wife of a 33-year veteran aluminum worker, says Century has retiree blood on its hands.

She tells of two tragedies. There’s Bryce Earl Turner who Karen encountered after her first meeting with Century retirees in Ravenswood. He was scared and sick. Both alternatives he faced -- buying private insurance or paying for his leukemia treatments out of pocket -- were way beyond his means. Losing his insurance was a death sentence. The retirees worked desperately to get him more time.

With the help of West Virginia’s U.S. senators, Jay Rockefeller and Joe Manchin, and a provision in Obama’s health care reform law, the retirees managed to get coverage extended to Sept. 1, 2011. Bryce Earl Turner, 59, who worked 37 years at the aluminum plant, died the next day.

The other tragedy is Sam McKinney. He attended a meeting of the retirees on Feb. 14, 2011. He said he feared losing the insurance because his wife was ill. Karen recounts:

“He was very emotional because he had taken his wife to Charleston to try to get some assistance with her health care costs and had been turned down.”

He said, she recalled, that it was hard to believe that in America after a person expended his usefulness to industry, a corporation could coldly cast him aside as if his life had no value.

After the meeting, Sam McKinney took his wife to Outback Steakhouse in Parkersburg for Valentine’s Day. As they left, he collapsed and died in the parking lot. Karen is sure the stress killed him. Wrongful stress. Stress he’d not have experienced if Century was good for its word.

Karen says of Turner and McKinney:

“It was murder without a gun.”

Though Century failed to fulfill its obligation to pay for retiree health care, it handed its last CEO, Logan W. Kruger, $4.9 million in 2010. That’s twelve times more than Americans pay their president, the leader of the free world. Century gave Kruger another $6.2 million to leave last November. Still, he’s suing for $20 million on top of that. Century also is defending against a lawsuit filed for the retirees by the United Steelworkers (USW) union, which represented most of the Century workers.

The USW hopes, however, to resolve the dispute outside the courtroom, with the help of the retirees and West Virginia lawmakers. The elderly agitators managed to win the support of the state’s U.S. senators, its governor and its legislature. So last year when Century went begging to the state for $20 million it claimed it needed to re-open the Ravenswood smelter, the lawmakers sent Century away empty handed with a directive to settle with the retirees before seeking reconsideration.

Not long afterward, Century booted Kruger, and the new management team is negotiating with the USW and the retirees.

The protesters don’t have what they want yet, and they’re not leaving their tents until they do.

Century gave the retiree occupiers port-o-potties and installed concrete barriers to prevent cars careening on an icy Route 33 from plowing through the encampment.

Very nice gesture. But resuming payment for promised health insurance would be a whole lot better.

Hey, GOP: Give the 99 Percent Some Lovin’

Leo Gerard — Tue, 06 Dec 2011 10:26:16 -0500

MTV needs to stop giving that creepy vampire guy and moony human girl in the “Twilight” series the “best kiss” prize in its annual movie awards because it’s Republicans who truly earned the trophy for the big wet smooches they lay on the 1 percent.

Just think of the GOP lovin’ that went into the Bush tax breaks that gave millionaires more than $125,000 a year and the middle class less than $1,000. Or the arduous embrace signified by cutting the capital gains tax to a rate lower than that on middle class income.

The GOP is a faithful lover to the 1 percent, steady and true. Last week, Republicans found themselves confronted with a choice between raising taxes on the 99 percent or on the 1 percent, and the GOP spared the millionaires. The GOP’s fidelity to the 1 percent is so strong that Republicans wavered on their promises – never raise taxes – and principles – tax cuts don’t have to be offset. As a result, the 99 percent is beginning to feel more than a little spurned by the GOP.

Since the days of the Bush breaks in 2001 and 2003, Republicans consistently have said that tax reductions stimulate the economy and the lost revenue needn’t be offset. Jon Kyl, the No. 2 Senate Republican, asserted, for example: “You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.” The GOP didn’t pay for the Bush breaks, a decision that dramatically increased the deficit, which Republicans now say the 99 percent must pay by suffering slashed government services.

Similarly, Republicans have loyally upheld their solemn pledge to lobbyist Grover Norquist to never, ever raise taxes. Last year, for example, they GOP refused to allow the Bush tax cuts to expire, contending that would be a tax increase, not the end of rates intended to be temporary.

To recap: The GOP vowed never to raise taxes. The GOP defines an expiring temporary tax cut as a tax increase. And the GOP believes tax reductions don’t have to be offset.

To serve the 1 percent, however, Republicans discarded all of that supposedly sacrosanct philosophy during last week’s struggle over extending the temporary payroll tax cut. Congress voted last December to decrease for one year the payroll tax from 6.2 percent to 4.2 percent, putting an extra $1,000 in the hands of 160 million workers during a recession to pay bills.

This fall, President Obama and the Democrats proposed extending the cut another year, enlarging it by dropping the rate to 3.1 percent, and expanding it under certain circumstances to employers, who pay a matching amount. That would give the average family an extra $1,500 to spend, which would, according to Moody’s Analytics, inject as much as $120 billion into the economy and create 750,000 jobs.

Initially, the GOP opposed extending the tax cut – even though that would seem to violate their principal that restoring previous rates is a tax increase. Norquist must have taken to task the anti-payroll-tax-break Republicans because by last Tuesday, the GOP changed its mind.

Still, Republicans insisted, this tax cut would have to be offset – even though that demand violates their principal that tax cuts don’t need to be paid for.

Democrats proposed offsetting the cost of the extension with a 3.25 percent surtax on 350,000 millionaires and billionaires – the 1 percent.

That confronted lawmakers with this choice: Slightly increase taxes on the nation’s richest 350,000 or raise taxes on 160 million workers by allowing the payroll tax break to expire.

In the U.S. Senate, Democrats and one Republican, moderate Susan Collins of Maine, voted to give the 160 million the break, for a total of 51 votes, more than half. Every other Republican in the Senate sided with the nation’s richest 350,000, providing enough votes to defeat the tax break for the 99 percent – not by a majority but by filibuster.

Republicans then proposed instead to leave the tax at 4.2 percent and offset the extension by freezing the pay of federal workers through 2015 and slashing the federal workforce by 10 percent – a total of 210,000 public servants.

That would spare the wealthy and instead make federal workers pay, and kill jobs during a period of prolonged, painfully high unemployment. Democrats defeated that.

The payroll tax break is set to expire Dec. 31.

Where’s the GOP lovin’ for the 99 percent?

The GOP vote against extending and expanding the payroll tax break felt like a kick in the ass to the 99 percent. The Republican proposal to make middle class federal workers – instead of the nation’s wealthiest – bear the cost of extending the tax break seemed like the GOP was once again kissing the 1 percent’s ass.

The 99 percent is beginning to suspect the GOP will never treat them any better than Newt Gingrich treats his wives. Nearly 7 in 10 Americans told New York Times/CBS News pollsters in October that they believe Congressional Republicans favor the rich.

Hey, GOP, are your right wings just too short to embrace the 99 percent?

The 1 Percent Indifferent to Their Indebtedness

Leo Gerard — Tue, 29 Nov 2011 07:56:21 -0500

Most Americans, the 99 percent, feel the pressure of indebtedness. When they owe a friend a buck, their conscience bothers them until they’re square. They pay their bills, working second jobs if necessary. They meet mortgage obligations even when underwater.

That’s why there was a deficit Super Committee. Americans don’t like debt, including bills owed by their government. It weighs on them, even when it’s borrowing by Washington to create jobs and speed recovery.

But for the majority of millionaires – the 1 percent -- incurring debt does not evoke anxiety. They’re numb to the feeling of responsibility that indebtedness induces in the 99 percent. They believe they owe nothing to their country or society despite all they’ve gained. They feel no duty to repay America for creating the environment that enabled them to amass all that wealth.

Thus the Super Committee failed.

The committee was searching for $1.2 trillion over 10 years. The Bush tax cuts, which disproportionately benefitted the rich, cost $2.8 trillion over the past decade. But the 1 percent obstructed a return to the pre-Bush-balanced-budget-era tax rates and would sneer at the mere suggestion that they pay the much higher marginal rates the wealthy accepted after World War II to settle those government debts. In fact, Republicans on the Super Committee actually proposed additional tax cuts for the rich.

More breaks for the wealthy would require slashing social safety net programs for the 99 percent -- Social Security, Medicare, Medicaid, Head Start, child nutrition. It would mean no funds to create jobs and boost the economy. The result would be less money to build highways, refurbish bridges and renovate schools.

That’s okay with the 1 percent because they feel no obligation for those social responsibilities.

Elizabeth Warren, the former Harvard Law Professor and Special Advisor for the U. S Consumer Financial Protection Bureau, tried to explain debt to the super-rich:

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you!

But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea — God bless. Keep a big hunk of it.

But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

In addition to paying forward, the 1 percent also is obliged to pay back. That’s because the tax break Bush handed them contributed significantly to the national debt that the Super Committee failed to resolve.

The rich didn’t create the entire federal deficit. And the 99 percent are ready to pay their part, just like they feel compelled to meet their personal debts.

The behavior of the 99 percent during the mortgage crisis best illustrates their morality on the issue of repayment generally.

In the midst of the recession near the end of 2009, as home values relentlessly declined, more than third of all mortgage holders found themselves underwater – meaning that they owed more on their houses than they were worth.

Although financial advisors told mortgage holders who were underwater by hundreds of thousands of dollars that they should walk away from their houses in their own economic self-interest, only a tiny number, estimated at less than 5 percent, chose to deliberately default and dump the loss on the bank.

University of Arizona law professor Brent T. White, writing about this phenomena, said the high moral standard of the average American mortgage holder is key to this. In a law review article, he cited a study that found more than 80 percent of homeowners regard the act of strategically walking away from a mortgage contract as unprincipled. White contrasted the values of individual homeowners with those of the big banks:

“Unlike lenders who seek to maximize profits irrespective of concerns about morality or social responsibility, individual homeowners are encouraged to behave in accordance with social and moral norms that require individuals keep promises and honor financial obligations.”

Political, social, media and financial institutions all convey a clear message to home owners, White said, that it is a borrower’s moral responsibility to pay his debts.

That message is not, however, as clearly directed to the 1 percent. Some of them have gotten it. The 200 who signed on as Patriotic Millionaires for Fiscal Strength and who asked Congress and the Super Committee to increase their taxes understand they have a debt to America and seek to honor it.

The debt-shirking remainder, though, and the purchased politicians who support them, are as unseemly, unethical and dishonorable as deadbeat parents.