What constitutes a corporate class

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• What constitutes a corporate class?

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Interlocking Directorate -- 5 functions

• More Positions on Corporate Boards
• More likely to be board members of huge
  corporations
• Represent banking and insurance interests
• Elite Social club membership
• Represent corp. interests in other institutions
  (Universities, Foundation, Government)

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Big Business?

• Interlocking Directorates are a major means of
  communication among the power elite
• At the center of corporate cliques are big banks
  Citi, Bank America, Chase, Chemical, Sallie
  These surround themselves with clusters of
  corporations through interlocks (Kerbo 2004)

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Power to impact policies that benefit the
Corporate Class

• Senate Committee on Governmental Affairs
• 13 of the top 130 corporations had ties with 70
  percent of the other 117 corporations via 240
  Direct and 5,547 Indirect Interlocking
  Directorates (indirect when two or more
  corporations are tied by their board members
  through a 3rd)

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Financial Hegemony
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• Over 70 of assets of the 200,000 Corporations in
  America are held by 100 of them or .0005......
• Concentration of Power? So What?
• If one falls they all fall. Thus, U.S. backed
  low interest loans, relaxed regulations,
  protective litigation, and taxes loopholes
  (Wealthfare)
• Example International Medical Centers
  Borrowed 360 million from U.S. Govt. and then
  filed bankruptcy the same year.

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Example of Who Owns What? GE owns NBC

• WVTM, KXAS, WMAQ, WCMH, WVIT, KNBC, WTVJ, WNBC,
  WCAU, WJAR, WNCN, KNSD, WRC, KNTV
• TELEVISION STATIONS
• CABLE BRAVO, CNBC, MSNBC (that would be
  Microsoft), NBC DIGITAL MEDIA,

• GE aircraft engines
• GE commercial finance
• GE consumer products
• GE insurance
• GE medical systems
• GE plastics
• GE power systems
• GE specialty materials
• GE transportation systems

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GE Interlocking Board Memberswith

• Allied Signal, American Stores, Anheuser Busch,
  Baxter International, Bristol-Myers Squibb (3nd
  largest donor to the Bush campaign), Champion
  International, Chase Manhattan, Chubb, Citicorp
  (7th largest donor to Bush), Exxon (largest donor
  to Bush), Goodyear, J.P. Morgan, Kellog, Kimberly
  Corp., Mellon Foundation, PepsiCo, Phillip
  Morris, etc. (about 20 more major corps)

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Who Owns What? Westinghouseowns CBS and
interlocks with

• Aetna Life, BDM International, Ashland, Banc One
  Corp, Bell Atlantic, Campbell Soup, Cardinal
  Health, Chase Manhattan, Dell, Dow Jones and
  Duracell International, General Dynamics,
  Harcourt, Kaman Corp, MBIA Inc, Rockwell
  International, Quaker Oats, Prudential Life,
  Wal-mart, etc.

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Policy Formation Groups

• Setting where Corporate Execs can familiarize
  themselves with general policy issues
• A place for Conservative and Ultra conservatives
  to fight it out
• Informal Training ground for new leaders
• Informal recruiting ground for hand picking
  academic experts for government service

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Council on Foreign RelationsCFR

• 37 of the top 500 Corporations have at least 1
  officer or director who has served as members of
  CFR
• Of the top 100, 70 had at least one member
• 20 of the top 25 Banks and 16 of the top
  Insurance companies had members

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• Dr. Phil - Hows that working for you?
• CEO Not bad!!!!

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Wage inequality

• ..has been increasing, in part, because of the
  declining real value of the minimum wage.

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For minimum wage workersworking poor

• The value of the minimum wage has not kept up
  with inflation. When adjusted for inflation, the
  value of the minimum wage is 21 lower than it
  was in 1979.
• http//www.osjspm.org/101_wages.htm1

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Real Value of Minimum Wage (2000 dollars)
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Incomes of the Wealthiest
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Average CEO Salary 2005 10,982,000Average
Worker Pay 2005 41,861
Ratio 262 to 1
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• Put another way, the average worker -- who earned
  41,861 in 2005 -- made about 400 less last year
  than what the average large-company CEO made in
  one day. That assumes 260 days of pay (52 weeks x
  5 days a week).

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CEO salaries increased by 1,884

• Does Corporate pay increase equal corporate
  profits?

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• This changecontrasted with the 35 percent
  decline in corporate profits, 13 percent drop in
  Standard Poor's 500 stock prices and 35 percent
  increase in the number of unemployed
  workersstarkly illustrates the dangerous and
  still-growing disconnect between pay and
  performance.

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CEO Pay Grew While Profits, Stocks Declined
NYTIMES

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• Salary 2006 2,000,000
• Compensation Package 15,598,383
• Company Net Income Loss
• 697.6 Million

Dwight Schar Chairman NVR Inc.
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• Salary 2006 7,381,605
• Compensation Package 1,528,846
• Company Net Income Loss
• 872.8.6 Million

William Walton Chairman/CEO Allied Capital Corp
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• Former CEO
• Douglas McCorkindale

• Salary 2006 12,836,899
• Compensation Package 1,600,000
• Company Net Income Loss
• 1.2 Billion

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• Salary 2006 1,3000,000
• Compensation Package 17,683,972
• Company Net Income Loss
• 1.5 Billion

Nicholas Chabraja Chairman/CEO General Dynamics
Source Washington Post
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CEOs get boot, take big check with them.
ADG/G8 11/5/06

• More CEOs getting fired but its so hard to fire
  for cause because of law loopholes.
• Corporations are now paying CEOs to
• leave quietly and theyre taking huge severance
  packages with them.
• Example Michael Ovitz fired by Michael Eisner
  took with him a 140 million exit package

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• In 2006 CFO turnover increased 23 from 2005
• Average CFO tenure is 4.5 years
• More scrutiny. ADG 4/1/07

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Meanwhile. Whats happening to American Workers

• What are your chances of moving up the social
  mobility ladder?

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Social Mobility????..

• Top 20
• earn half the income of the United States
• Note
• Investment incomes are not taxed at the same rate
  as incomes. And many of our nations wealthiest
  earn their keep via investment incomes.

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Wealth Says even more

• Top 1 percent own 42 of wealth
• About 6 trillion
• (90 of Americans combined own 5 trillion)

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Asset Poverty

• The poorest 40 owned 0.2 percent of all
  national wealth.
• The bottom 20 had a negative net worth - they
  owed more than they owned.

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In other words..

• Top 10 own 72 percent of the wealth
• Control over 80 of Corporations
• Bottom 90 own 28 percent
• Control less than 20 percent of Corporations

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• Wealth, Income and Corporate Control
• Equals
• Power