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Out of Control Pay-the-Rich Schemes The Arrogance of Monopoly Right
The 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. Alain 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. The $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.
Rumblings 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. Elsewhere, 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 shareholders.
Regarding 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 unacceptable." 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?" Trickle-down Theory of the RichTFI 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," Bédard blustered.
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. Unprincipled
Line that the End Justifies the Means |
The global
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.
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.
Some
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.
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
possible.
