Control Pay-the-Rich Schemes
The Arrogance of Monopoly Right
oligarchs in control of the economy and governments have doled out
billions of dollars in public money to themselves using the pandemic as
an excuse. Instead of increasing investments in social programs and
mobilizing the people to fight the disease, they have marshalled public
resources into their own pockets to enlarge their fortunes and
strengthen their class privilege and control of the economy.
arrogance of monopoly right is such that the oligarchs make no bones
about their "entitlement" to the wealth workers produce and the public
funds collected by the state.
Bédard, Chief Executive Officer of the North American
transportation cartel TFI International, manoeuvred the federal
government's wage subsidy program -- Canada Emergency Wage
Subsidy (CEWS) -- into giving his company $63 million. The amount paid
up to the end of September is still growing as the government has
extended the pay-the-rich scheme into the new year.
$63 million in public funds Bédard's company received soon
disappeared into the accounts of his cartel becoming indistinguishable
from the over $1 billion in annual gross income. Despite the pandemic
and state-declared emergency and public money in their coffers, company
funds flowed out to shareholders and executives in the form of $45
million in stock dividends, $9 million to buy back company shares, $20
million in stock options given to company executives and, with a slap
in the face of the working class, the layoff of 1,600 TFI workers.
News of the
continuing CEWS government payments to TFI, the share dividend, stock
buyback and options, strong gross income and profits, and layoffs of
1,600 workers sent its stock price soaring on the New York Stock
Exchange, increasing the paper wealth of its owners. The situation for
the executives in control of the company and owners of stock, unlike
the laid-off workers, was so positive that CEO Bédard in the
fall increased the share dividend payout by 12 per cent.
began to surface in social media that public funds should not be going
to profitable companies or to those that simply turn around and hand
the government cash to owners and executives or use it to buy back
shares to increase the stock price. Reports appeared that government
funds handed out to private interests were being used to fatten the
pockets of the rich.
Such was the case with
long-term care operators Extendicare and Sienna Senior Living. Upon
receiving $157 million in public funds, the companies turned around and
gave their shareholders $74 million. Meanwhile, workers and residents
in their facilities continued to suffer terribly with reported deaths
from COVID-19 reaching 480 by early autumn.
the Financial Post (FP) discovered 68 major
companies had received $1.03 billion in CEWS public payments during the
second and third quarters of 2020 but at the same time paid out more
than $5 billion in dividends to investors. Many of those companies,
similar to TFI International, introduced share repurchase programs to
buy back millions of dollars in shares during the two quarters, gave
out share options to executives and paid hefty dividends to
in the media and certain economists became critical of the CEWS
pay-the-rich program implying that it was poorly thought out and
presented, which left it open to criticism. Some pointed to other
jurisdictions where the schemes of governments to pay the wages of
workers on behalf of private enterprises were better disguised and not
so easy to see through the corruption. The economy is now openly seen
to be a pay-the-rich corrupt economy under the control of the global
oligarchy and in need of a new direction.
the CEWS pay-the-rich scheme, FP quotes York University professor
Richard Leblanc saying, "Think about what's happening: Taxpayers are
indirectly subsidizing payments to shareholders. That is completely
Another professor, Michel Magnan who
teaches corporate governance at Concordia University said of this
particular pay-the-rich scheme and practice, "If you buy back your
shares it's because you don't need the cash. So if you don't need the
cash, why are you getting cash?"
Theory of the Rich
TFI International CEO Alain
Bédard angrily responded to the criticism telling Le
Journal de Montréal that we oligarchs "are not
ashamed" to take $63 million in government money and in the same
instance hand over $45 million to share owners as dividends, give $20
million in stock options to executives and use $9 million to buy back
shares to boost the share price. "Not taking [the government payout]
would be like refusing a tax exemption. It would be like saying 'We're
more Catholic than the pope.' We're in business for our stockholders,"
Many in the media
and certain economists are loath to criticize any pay-the-rich scheme
and instead jump to the defence of corruption and monopoly right
because they do not want to be identified as discussing an alternative.
One would think that with the recurring economic crises and blatant
pay-the-rich schemes some economists would perhaps look into the
situation a little more deeply and discuss a new direction and aim for
the economy, which put an end to the recurring crises and corruption.
But no, more often than not one finds in the media those who
unashamedly promote the neo-liberal trickle-down theory of paying the
rich as a so-called way to climb out of a crisis. Social wealth must
first go to the rich before it trickles down to those who produce it or
so the story goes. If those in control are the ones holding power and
organizing the pay-the-rich schemes with the supposed aim to eventually
benefit the people, then how could pay-the-rich practices be called
corruption they argue, and besides they assert, no alternative is
Yet reports swirling in the media suggest
that wealth currently is not trickling down to the masses at all but on
the contrary flowing up to the global oligarchs who have massively
increased their wealth during the pandemic. Share prices of the biggest
cartels on most of the imperialist stock markets have reached record
highs in 2020 while unemployment remains high, poverty and food
insecurity are disturbingly widespread and many small and medium-sized
companies are struggling just to survive.
Line that the End Justifies the Means
words of Mikal Skuterud, a labour economist at the University of
Waterloo, could identify him as an apologist for monopoly right and the
unprincipled line that the end justifies the means. He told CBC News,
"The No. 1 objective [for CEWS] was to get money out there to shore up
the economy. To the extent that it didn't save jobs, but it helped keep
some companies afloat -- I don't think that's something that should be
criticized." In other words, in the case of CEWS, the end result of
possibly some good coming from paying the rich justifies the corruption
endemic to the program. Skuterud appears to admit that not many jobs
were "saved" but that in the end the program after all helped the
economy and such a good result justifies the corrupt means.
Organize for a New Direction and Aim for the Economy
should take stock of the situation as it exists and clearly raise the
political demand to Stop
Paying the Rich! Increase Funding for Social Programs!
Those who are in control of the state treasury and use it to increase
their wealth must not be permitted to get away with it. The practice
should be illegal with governments held to account as well for
corruption. A new direction and aim for the economy to serve the people
and society is not only possible but necessary and it begins by
stepping up the fight to Stop
Paying the Rich!
way out of this mess is to develop the political mobilization of the
people for a new direction for the economy and politics which defend
the rights of all. It is necessary to build the New in practical ways
to oppose the rulers' monopoly over decision-making and the use of
This article was published in
Volume 50 Number 49 - December 19, 2020
Control Pay-the-Rich Schemes: The Arrogance of Monopoly Right - K.C. Adams