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The poll, which has been taken at this time each year since 1966 has been tracking replies to five questions designed to measure feelings of powerlessness and isolation in the US, also shows an increase in other measures of alienation. About 60% of those surveyed in the nationwide telephone poll of 1,011 adults believe that "most people with power try to take advantage of people like you," up sharply from 53% in 2004. More than half of those polled say they tend to feel "people running the country don't really care what happens" to them, up from 44% last year. Additionally, 74% feel that "the people in Washington are out of touch with the rest of the country," up from 67% in 2004 and at its highest level since 1998. The level of alienation varies greatly in different segments of the population. The highest levels of alienation are found among people with household incomes of $15,000 or less, Democrats and African Americans. The lowest levels of alienation are found among Republicans, college graduates and people with incomes over $75,000. No trust in business or the people who run it The New York Times says that more than ever, Americans do not trust business or the people who run it. The newspaper reports that pollsters, researchers, even many corporate chiefs themselves say that business is under attack by a majority of the public, which believes that executives are bent on destroying the environment, cooking the books and lining their own pockets. Even as corporate scandals like Tyco's recede, fresh complaints - over high energy costs and soaring oil company profits, planned layoffs in the auto industry, bribery and conflicts of interest in military contracting - fuel the antipathy. And every report of high-dollar executive compensation - Philip Purcell's $113 million payout to leave Morgan Stanley, James M. Kilts's $165 million for selling Gillette to Procter & Gamble - strengthens the feeling that business funnels money from the workers to the elite. The trial of Enron's former top executives, which begins in January, is likely to renew anger about the scandal that touched off this wave of distrust. Steven Rattner an American venture capitalist, wrote in BusinessWeek magazine last August: Hooray for The New York Times and The Wall Street Journal for returning the problems of class in America to the front page. Shame on the rest of us, passive witnesses to the emergence of a second Gilded Age, another Roaring Twenties, in which the fruits of economic success have gone not to the broad populace but to a slim sliver at the top. Rattner says that economists Thomas Piketty and Emmanuel Saez calculated (using data from the Internal Revenue Service, hardly a hotbed of partisanship) that the share of income going to the top 1% of households nearly doubled, to 14.7% in 2002, up from a low of 7.7% in the early 1970s. By comparison, the income share for the top 1% peaked at 19.6% in 1928 before beginning its long slide. What is particularly alarming is that at every step up the ladder, the disparity has progressively widened. Over the past 30 years, the share of income garnered by the top 10% of Americans has grown by about a third; the share of the top 0.01% -- the 13,000 or so households with an average income of $10.8 million in 2002 -- has multiplied nearly four times. Rattner writes that if America doesn't pursue policies to fix inequality, social pressures may force unwise, even extremist moves, like protectionism. Income inequality is now wider in America than anywhere else in the industrialized world and on a par with that of a Third World country. Is this the American Dream, he asks? - See Finfacts report: Executive Pay and Inequality in the Winner-take-all Society - including international comparisons Boston's piñata The Mirriam-Webster dictionary describes a piñata, as a decorated vessel (as a pottery jar) filled with candies, fruits, and gifts and hung from the ceiling to be broken with sticks by blindfolded persons as part of especially Latin-American festivities. Last September, James M. Kilts complained to the the Boston Chamber of Commerce that he had become "Boston's piñata." He argued that he had earned his handsome pay by creating billions in shareholder value since arriving at Gillette in February 2001. The Proctor & Gamble deal "will be the greatest merger in consumer products history," he said. "We make no apologies." The companies promised him a package valued at $165 million, including stock options and severance. On top of this, P&G has said it will give him stock and options worth $23 million in return for serving as its vice-chairman for one year and agreeing not to join a rival before 2009. Excluding $6.5 million he stands to earn during his year as vice-chairman, Kilts could eventually pocket an astounding $188 million. "It is obscene what he is getting paid," said retired Gillette Vice-Chairman Joseph E. Mullaney. Kilts received his Gillette payout just five years after pocketing benefits worth $70 million in connection with selling Nabisco Holdings to Philip Morris (now renamed Altria Group). Kilts like other CEOs had a provision in his contract providing for golden parachutes: special payments if control of the company suddenly changed hands. Corporate boards defended the arrangements as necessary to prevent executives from resisting reasonable deals to protect their turf and paychecks. Neither shame nor modesty Like the Louis XIV dictum - L’État c’est Moi - Kilts, a hired hand, takes full credit for creating billions in shareholder value. Who cares what the general market rise has been in recent years, it's all a case of "me, me, me." No doubt he has spoken to his staff about group culture, loyalty and what a great resource they all are. The trouble is that his snout is so deep in the trough that he is blinded to the impact on others. Workers are told that they have to work harder to keep their jobs and when Kilts cuts staff, where does he tell unions to go when they seek compensation? A Fortune magazine report says that at a meeting with all division chiefs on Kilts' very first day at Gillette , he asked for a show of hands: "How many of you think our costs are too high?" Everyone in the room immediately raised his hand. Then he asked, "How many of you think costs are too high in your department?" Not a single arm went up. According to Kilts, it is a common response among managers of companies in trouble: Everyone knows there's a problem, it's just that nobody thinks it's his problem. BusinessWeek says that Georgia-Pacific Corp.'s CEO, A.D. "Pete" Correll, will receive a $92 million package when the company's sale to Koch Industries is completed, according to an estimate by executive-pay consultant Delves Group. A reader comments: Only in America. I work for Georgia Pacific: this year no raise, next year 2%, the following year no raise, and then the next year 2%. I have 30 years of service. Our CEO and his buddies at the top get filthy rich on us. Times are tough so we have to keep our labor rates down. Well, $92 million ought to do that. What a disgrace and what a bunch of two-face (sic) people at the top. A.D. Correll's motto to us workers was you have the right to grow if you earn it. Now we know what he really meant. This is a big insult to all of the working class in America. Michael D. Capellas will receive a $39 million package for selling MCI to Verizon Communications earlier this year, just three years after he collected a $14 million package for selling Compaq Computer to Hewlett-Packard. The Capellas MCI payout "reflects his success in engineering the largest corporate turnaround in history and fulfilling his fiduciary duty of maximizing stakeholder value," a company spokesman said. A reader comments: This trend is disgusting. As a
former employee of MCI, I was on the wrong side of Capellas' makeup job. Laid
off after 18.5 years of excellent reviews, had just received a raise and 4.3
performance rating, 5 being the highest. That was only 3 months before I was let
go, and 3 days before Labor Day, to boot. His claim of being ethical doesn't
deserve space in the Enquirer. MCI settled the 401k class action lawsuit for
measly 17 million when the employees lost a combined 800+ million dollars. How
could he or MCI be considered ethical? The 2005 Gordon Gekko Prize In the 1980's, the Gordon Gekko character played by Michael Douglas in the movie Wall Street became an icon of the decade because of his mantra on greed. (The point is, ladies and gentleman, is that greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA- Click for the full speech to Teldar Paper Stockholders). James M. Kilts is this year's winner of the Gordon Gekko Prize. The runner-up prize goes to Philip Purcell, the ousted CEO of securites firm Morgan Stanley. Last June, the board of Morgan Stanley approved an award of an exit package worth an estimated $113.7 million to Purcell, who resigned following months of controversy about the direction of the firm. The disclosure in a regulatory filing, came days after the report that Purcell's successor John Mack agreed a contract worth at least $25 million a year - or as much as the average of four of his high-paid Wall Street investment banking peers - the why shouldn't I have a yacht as big as his approach. Despite the fall in earnings in the second quarter of the year, Purcell got a departure bonus worth $42.7 million. The cash payment, which was not in his original contract, was based on a formula that adjusts the bonus up or down depending on the difference between Morgan Stanley's fiscal 2005 and 2004 pre-tax profit. Purcell got $34.7 million of restricted stock and an estimated $20.1 million in stock options, retirement benefits with a lump-sum value around $11 million. In addition to medical benefits, $250,000 in lieu of other benefits and an office and administrative and secretarial expenses every year for the rest of his life, Morgan Stanley will make $250,000 in charitable donations a year in his name. Purcell will be spared writing his own charity cheques. In the planet lived in by investment bankers, there is nothing strange in paying for a guy's charity contributions at a rate greater than the annual salary of the Chairman of the Federal Reserve. Purcell ensured a payback for loyalty and Steve Crawford, who was appointed co-president of Morgan Stanley after a management shake-up last March, agreed to a contract guaranteeing him at least $16 million a year for each of the next two fiscal years. Crawford left in July with the $32 million bonanza. A company spokesman said the agreements "resulted from discussions the board undertook following the announcement of Mr. Purcell's decision to retire, in order to ensure management stability through the CEO search process and transition." With Mack ending up with the "whole ice cream factory," Purcell gets Willy Wonka's chocolate factory, a platinum meal ticket for life and contributions to charity paid by his former employer!
Have these people any capacity for shame? The galling thing is that these same people who think that they have a divine entitlement to grab almost everything in the cookie jar, have no qualms about telling business to cut benefits and throw people on the slag heap. Contrast life at Morgan Stanley and the rest of America America's poverty rate rose to 12.7 percent of the population last year, the fourth consecutive annual increase, the US Census Bureau said last August.
The percentage of people without health insurance did not change. Overall, there were 37 million people living in poverty, up 1.1 million people from 2003. Real median household income remained unchanged between 2003 and 2004 at $44,389, according to the report released today by the U.S. Census Bureau. Meanwhile, the nation’s official poverty rate rose from 12.5 percent in 2003 to 12.7 percent in 2004. See: Finfacts Report - US poverty rate rose to 12.7 percent in 2004 ALIENATION INDEX – TREND SINCE 1966The Harris Interactive Alienation Index is calculated by taking an average (mean) of those who agree with the first five statements (see Table 3).
NOTE: The Alienation Index was not calculated in 1967, 1970, 1975, 1979, 1980 and 1981. ALIENATION INDEX: DECADE AVERAGES (MEAN)
ALIENATION – INDIVIDUAL QUESTION TREND"Now I want to read you some things some people have told us they have felt from time to time. Do you tend to feel or not feel _______?"
(Table 3 continued)
*Not included in the Alienation Index. NOTE: These questions have always been asked at the end of the year, usually in December. ALIENATION INDEX BY DEMOGRAPHICS
Methodology: This poll was conducted by telephone in the U.S. between Nov. 8-13, 2005, among a nationwide cross section of 1,011 adults. Figures for age, sex, race, education, number of adults, number of voice/telephone lines in the household, region and size of place were weighted where necessary to align them with their actual proportions in the population. In theory, with a probability sample of this size, one can say with 95% certainty that the results have a sampling error of +/- 3 percentage points of what they would be if the entire adult population had been polled with complete accuracy. © Copyright 2007 by Finfacts.com |
