Filed October 17, 2002
Pity the poor Democrats. They just can't get a break. At a time when the public is calling for the heads of corporate miscreants,
you would have thought that the latest Census Bureau report on poverty and income would be great campaign fodder for Democrats.
"For the first time in eight years, the poverty rate rose," said Dick Gephardt on the floor of the House, but it fell upon
the deaf ears of a public preoccupied with sniper attacks and rumors of war. But the statistics to come out of the report
are staggering: The number of Americans living in poverty grew 1.3 million last year to 32.9 million, while the most affluent
fifth of the population received half of all household income and the poorest fifth 3.5 percent.
With the poor receding so rapidly in our rearview mirror, here are a few postcards from both edges of the abyss between
the "let them eat cake" crowd and the faceless millions on the other side.
Upstairs: Former Kmart CEO Charles Conaway received nearly $23 million in compensation during his two-year tenure.
Downstairs: When Kmart filed for bankruptcy in 2002, 283 stores were closed and 22,000 employees lost their jobs. Total
amount of severance pay for them: $0.00.
Upstairs: Former Tyco CEO Dennis Kozlowski made nearly $467 million in salary, bonuses and stock during his four years
running the company into the ground.
Downstairs: Shareholders lost a massive $92 billion when Tyco's market value plunged.
Upstairs: The CEOs of 23 large companies under investigation by the SEC and other agencies earned 70 percent more than
the average CEO, banking a collective $1.4 billion between 1999 and 2001.
Downstairs: Between January 2001 and August 2002, the market value of these 23 companies nose-dived by over $500 billion,
or roughly 73 percent. And since January 2001, these companies have laid off over 160,000 employees.
Upstairs: In the year before Enron collapsed, about 100 executives and energy traders collected more than $300 million
in cash payments from the company. More than $100 million went to former CEO Kenneth Lay.
Downstairs: After filing for bankruptcy, Enron lost $68 billion in market share, 5,000 employees lost their jobs and Enron
workers lost $800 million from their pension funds.
Upstairs: Wal-Mart CEO H. Lee Scott, Jr. received more than $17 million in total compensation in 2001.
Downstairs: Wal-Mart employees in 30 states are suing the company alleging that managers forced employees to punch out
after an eight-hour work day, and then continue working for no pay. Nevermind the Fair Labor Standards Act, which says employees
who work more than 40 hours a week must be paid time-and-a-half for their overtime.
Upstairs Penthouse A: Citigroup provided Enron with $8.5 billion in loans disguised as commodity trades. The deals allowed
Enron to artificially inflate cash flow and hide debt, which deceptively boosted share price and ultimately led to the company's
Upstairs Penthouse B: Citigroup offered hot initial public offering shares to WorldCom CEO Bernie Ebbers and other telecom
giants in exchange for their investment banking business. Ebbers is alleged to have made nearly $11 million on IPO shares
sold to him by Citigroup.
Downstairs: Citigroup agreed to pay $215 million in fines to the FTC to settle allegations of "predatory lending," loosely
defined as mortgage lending that preys on customers, especially ones with bad credit. through abusive practices like deceptive
marketing and inflated fees on unnecessary refinancings.
Upstairs: More than 1 million US corporations and individuals have registered as citizens of Bermuda to avoid taxes, a
practice OK'd by the IRS. Although the exact number is unknown, the IRS estimates that "tax-motivated expatriation" drains
at least $70 billion a year from the US Treasury.
Downstairs: If you were a worker poor enough to apply for the Earned Income Tax Credit in 2001, your chance of being audited
was one in 47. If you made more than $100,000 a year, your chance of being audited was one in 208.
Upstairs: The top 1 percent of stock owners hold 47.7 percent of all stocks.
Downstairs: The bottom 80 percent of stock owners own just 4.1 percent of total stock holdings.
Upstairs: In 2000, the average CEO earned more in one day than the average worker earned all year.
Downstairs: In 2000, 25 percent of workers earned less than poverty-level wages.
Upstairs: Between 1990 and 2000, average CEO pay rose 571 percent.
Downstairs: Between 1990 and 2000, average worker pay rose 37 percent.
For more information about the disturbing disparity in wealth and privilege between the top 1 percent and the bottom 80
percent open up the business section of your newspaper. Or, grab some cake and turn on Court TV.
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