Wal-Mart & Steven Greenhouse's The Big Squeeze

I read several more chapters of Steven Greenhouse's The Big Squeeze: Tough Times for the American Worker last night (click here to view all my posts about this book). It is a good book. But it is so sad to read about how average working class Americans are treated, particularly those working at Wal-Mart.

The first half of chapter six, Leaner and Meaner, focuses on the yelling, screaming, cursing, bullying tactics used by managers at Wal-Mart and other companies to decrease costs and thus increase net profits. But the most interesting part of this chapter was learning how computers, which increase productivity by allowing routine tasks to get completed more quickly, decrease costs because of the ease in which they allow for monitoring of employees, cheating workers on payroll, and other shrewd tactics.

Chapter seven, Here Today, Gone Tomorrow, discusses corporations' increasing reliance on temporary workers, consultants / independent contractors, and permatemps (click here to read about Jean Capobianco's story as a FedEx driver, or here to read my previous post about that NYTimes article) while chapter eight, Wal-Mart, the Low-Wage Colossus, is all about the evil ways of the world's largest retailer and the world's largest company:

It is three times as large as the world's second-largest retailer, Carrefour of France. Its sales are greater than the combined sales of Target, Sears, JCPenny, Kohl's Safeway, Albertsons, and Kroger. ... It is the nation's largest grocer, and will have 35 percent of the nation's food market and 25 percent of the pharmacy market by the end of this decade, according to Retail Forward, a consulting firm. Wal-Mart already sells one-third of the nation's disposable dipers, toothpaste, shampoo, laundry detergent, paper towels, and nonprescription drugs, and some say it could soon caputre a 50 percent share for those products. It is the biggest customer of Walt Disney and Procter & Gamble and accounts for 28 percent of Dial's sales, 24 percent of Del Monte's, and 23 percent of Revlon's. Wal-Mart also accounts for 15 percent of the nation's single-copy magazine sales and nearly 20 percent of all sales of CDs, videos, and DVDs.

The tactics listed by Greenhouse include: end-of-shift lock-in, internal banishment, child labor, slashing schedules, overnight lock-ins, missed breaks, shaving time, hiring illegal immigrants, and sex discrimination (read David Cay Johnston's Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) to learn more about how Wal-Mart uses tax-financing and other tactics to increase profits).

Thankfully, it looks like the next chapter of this book, Taking the High Road, is about Costco and how it treats its workers better than Wal-Mart. More on this depressing and eye-opening book later...

The Big Squeeze: Tough Times for the American Worker

I've read just a few chapters of The Big Squeeze: Tough Times for the American Worker by New York Times labor and workplace correspondent Steven Greenhouse (click here to view all my posts about this book).

So far, much of the data is the same as from David Cay Johnston's Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) and Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else.

And the chapters of this book, like Johnston's book, each read like separate articles/essays with a common theme. But what is different from Johnston's books is the human aspect -- Johnston tells the stories of hard-working men and women (and their families) and their struggle as employees of mostly big corporations to join the middle class.

In that sense, this book is a lot like what I would expect of Barbara Ehrenreich's Nickel and Dimed: On (Not) Getting By in America (2001), which I wrote a short paragraph about here.

Looking forward to reading more of The Big Squeeze, particularly once I get to where Greenhouse discusses examples of employers who treat their employees well.

Click here to view the table of contents or click here to to download a PDF excerpt.

David Cay Johnston on the bailout bill

Whether you were for or against the bailout bill, these three essays by David Cay Johnston, written for The Plank (a blog for The New Republic) are worth reading:

• Who Benefits From the Bailout?
• Celebrating The Bailout Bill's Failure--And Looking Ahead
• Time to Take a Step Back

I've been a long-time fan of Johnston's investigative reporting for The New York Times and after recently reading two of his books -- Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else (click here to read an excerpt of the book or click here to read my entries on this book) and Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my entries on this book or click here to read excerpts and view the table of contents on the author’s website for this book) -- I've come to trust Johnston as an advocate for the common person.

It seems to me that instead of doing concrete research into how the bailout bill might affect Americans and the global economy, most media sources were simply fear-mongering about the chaos that we were doomed to if the bailout failed to pass. I'm also disappointed that Congress appears not to have considered alternatives to the bailout bill initially proposed by Hank Paulson and instead just worked to improve it.

It couldn't have hurt them to talk to some of the world's economists who had differing opinions.

Absent that, we can trust Johnston to speak up for us.

I.O.U.S.A.

I just got back from I.O.U.S.A.: LIVE with Warren Buffett, Pete Peterson & Dave Walker, a primer on why we should be concerned about the rising national debt, in a packed house -- click here to watch a trailer.

As you may recall, there is a billboard-size clock near Times Square was put up by Seymour B. Durst in the late 1980's to bring attention to government borrowing. It had been turned off for nearly two years starting in 2000 while the federal government was flush with surpluses when in 2002 it flickered back to life, showing a national debt of $6.1 trillion, as George W. Bush's presidency racked up the national debt quickly.

The national debt has continued to increase an average of $1.86 billion per day since September 28, 2007 and is now over $9.7 trillion thanks to an ever-expanding government and military, increased international competition, and debts to foreign countries that are becoming impossible to honor. That makes each citizen's share of this debt more than $30,000! And according to I.O.U.S.A. that number rises to $53 trillion when you take into account total unfunded and overextended entitlement programs (Social Security, Medicare and Medicaid).

I.O.U.S.A. examines the rapidly growing national debt and its consequences for the United States and its citizens by following U.S. Comptroller General David Walker (who has resigned as head of the Government Accountability Office to be a more politically active in the grassroots effort to education Americans about the problem of our national debt) and Robert Bixby director of the Concord Coalition) as they crisscross the country during their "Fiscal Wake Up Tour" explaining America’s unsustainable fiscal policies to its citizens.

The documentary was written and directed by the husband and wife team of Patrick Creadon and Christine O'Malley and based in part on Empire of Debt: The Rise of an Epic Financial Crisis by William Bonner and Addison Wiggin, who also wrote Financial Reckoning Day: Surviving the Soft Depression of the 21st Century.

Topical and nonpartisan, I.O.U.S.A. drives home the message that we must mend our spendthrift ways or face an economic disaster of epic proportions while proposing solutions about how we can recreate a fiscally sound nation for future generations.

It features a number of candid appearances, including by Warren Buffett, Alan Greenspan, Paul Volcker, Peter G. Peterson, Sens. Kent Conrad and Judd Gregg, former Treasury Secretaries Paul O'Neill and Robert Rubin, former CBO chief Alice Rivlin, Rep. Ron Paul, Bob Bixby, and David M. Walker.

Watching the movie made me think of all the ways the super rich are cheating the tax code and other government regulations at the expense of everyday Americans -- which I learned all about from David Cay Johnston’s Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else (click here to read my entries on this book or click here to read an excerpt of the book) and Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my entries on this book or click here to read excerpts and view the table of contents on the author's website for this book).

I.O.U.S.A. premiered at the Sundance Film Festival 2008 where it was nominated for the Grand Jury Prize. It also played at the 2008 Maryland Film Festival where it was a huge hit -- sold out in nearly every showing!

I.O.U.S.A.: LIVE with Warren Buffett, Pete Peterson & Dave Walker was broadcast via satellite to about 400 theaters nationwide. The documentary was immediately followed by a live satellite broadcast of a fantastic 45-minute town meeting style Q&A on the US economy from Omaha with America's most notable financial leaders and policy experts, including:

• Warren Buffett, CEO of Berkshire Hathaway
• William Niskanen, chairman of the CATO Institute
• Bill Novelli, CEO of AARP
• Pete Peterson, senior chairman of The Blackstone Group and chairman of the Peter G. Peterson Foundation
• Dave Walker, president & CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General.

Agora Financial's Addison Wiggin (who concieved of, co-written and executive produced the movie) and David Walker (President and CEO of the Peter G. Peterson Foundation which purchased the movie in July 2008) are also releasing a book I.O.U.S.A to accompany new feature-length documentary based on the writings of Agora's The Daily Reckoning. It features stories about the people involved in making decisions about the four major deficits in the country (federal deficit, trade deficit, savings deficit, and leadership deficit) including Warren Buffet, Robert Rubin, Alice Rivlin, Pete Peterson, David Walker, Paul O'Neill, James Areddy, and Bill Bonner.

Click here to download the Peter G Peterson Foundation's Citizens Guide, intended to provide a clear and concise summary of where our nation stands financially and where it is headed fiscally.

I.O.U.S.A. opens in 12 cities nationwide Friday August 22, 2008:

• Atlanta
• Chicago
• Dallas
• Irvine, CA
• Omaha
• Miami
• Kansas City
• Los Angeles
• New York
• Philadelphia
• San Francisco
• Washington DC

And after tonight, other theaters nationwide may decide they want to show it too!

Now maybe I should finally get to reading my copy of Peter G. Peterson's Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do about It!

Click here to view the table of contents of Running on Empty; or click here to read an excerpt; or click here to read a chapter by chapter summary.

But first, I'm going to read Warren Buffet's essay about Squanderville and Thriftville titled "Why I'm not buying the U.S. dollar," published in Fortune Magazine in October 2003 and mentioned in I.O.U.S.A.

Most U.S. Corporations Pay No Income Tax

Just read "Most U.S. Corporations Pay No Income Tax" published August 13, 2008 in the New York Times DealBook blog. Here's an excerpt:

Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress.

...

Among foreign corporations, a slightly higher percentage, 68 percent, did not pay taxes during the period covered — compared with 66 percent for United States corporations. Even with these numbers, corporate tax receipts have risen sharply as a percentage of federal revenue in recent years.

Immediately made me think of David Cay Johnston's Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else (click here to read my entries on this book) and Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my entries on this book).

Now let's see if Senate, armed with this GAO data, actually makes any changes!

Perfectly Legal by David Cay Johnston

I've been very slowly reading David Cay Johnston's Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else!

I really enjoyed reading Johnson's 2007 Free Lunch (click here to read my entries on that book) but have had a much harder time getting through Perfectly Legal; while the material in each book is different, they book have the same feel and I guess I've had enough of hearing about how the super-rich are profiting from ordinary middle class and lower class Americans.


To find out more, click here to read James K. Galbraith's New York Times review of this book titled " Nothing Is Certain but Death" and published in February 2004 or click here to read an excerpt from the author's website for this book.

Click here to read Johnston's articles published in the New York Times.

The Big Squeeze: Tough Times for the American Worker by Steven Greenhouse

Last month, I wrote about Steven Greenhouse's latest book The Big Squeeze: Tough Times for the American Worker after reading this NYTimes.com article adapted from the book.

I thought of this book again when I visited the New York Times Book Review and read Robert H. Frank's review titled "Labor Pains" published May 25, 2008.

I haven't checked it out at the library yet but after reading David Cay Johnston's Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my other entries on this book), I'm even more interested in The Big Squeeze.

Will write more when I get around to reading this book!

Free Lunch by David Cay Johnston

I stayed up late last night to finish reading David Cay Johnston's eye-opening Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my other entries on this book).

I've never considered myself a populist but reading this book made me feel outraged at the rising income inequality in our country and the government's role in increasing this tragedy.

In Chapter 26, Not Since Hoover, Johnston expands on the income inequality data that was first discussed in Chapter 2, Mr. Reagan’s Question, and finally answers my question about whether those numbers quoted are for individuals or families. The answer, "A single person and a family are each counted as one unit. For simplicity we will treat each unit as having an equal share of the population."

Having grown up in the 80s, I remember my parent's admiration for President Reagan and his tax cuts. I didn't know until now that the top income tax rate was 70% before Reagan's presidency (today the top tax rate is just 35% and people balk at that).

Shockingly, Johnston's data shows that for the top 400 "very-highest-income taxpayers" (about 1,200 people), "Under Clinton, their effective tax rate fell by almost eight cents on the dollar; under Bush, it fell only five." And people always say that it's just Republicans who give tax cuts!

And about those 400 "very-highest-income taxpayers," in 2000 each one had an income of at least $88 million with an average of almost $174 million each.

What I really liked was Johnston's call to action. His proposal to extend the franking privilege (allowing every Congressman to send out all the mail they want for free) to expenses is not one I'd heard before. But it seems like a viable solution to cutting out the influence of lobbyists. Johnston's proposal is this:

Let each member of Congress spend however much he or she deems necessary to do his or her job. . . .

This would come at a price: No more free trips, no more free meals, and no more gifts. Senator, if you need to inspect the cleanliness of the sink behind the bar at a resort in Tahiti, go right ahead, just give us the receipts with an explanation of the costs. We will collect the receipts from every elected representative monthly and post it all on the Internet in a format that makes for easy analysis.

Every dollar, and every meeting, must be disclosed. And we will pay for it all, subject only to the usual penalties for embezzling, the punishments accorded by the full House or Senate because of their exclusive right to judge the fitness of members, or the decision by voters to oust a spendthrift.

. . .

Let us also pay the real cost of maintaining two households, one back home and one in Washington, as well as going back and forth as often as the lawmaker chooses. Sure the Congresswoman from Hawaii will spend more on travel than the one from Northern Virginia, but people are smart enough to figure that out.

. . .

Reform begins with you.

I can't say that I'll go out and get involved in politics. But I'm glad to have read this book and learned about some of the ways that the rich are getting richer with the government's help at the expense of the average American.

If you want to hear more, click here to visit NPR and listen to Johnston speak about Free Lunch.



I'm looking forward to reading Johnston's Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else!

I hate tax time not because I don't want to pay taxes but simply because it seems so confusing.

I certainly believe Johnston's premise that the "Super Rich" benefit from such a complicated tax system and I'm curious to read Johnston's proposal to fix the broken tax system.

And I may just have to track down a copy of Johnston's Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business, a New Jersey casino industry expose (published in 1992).

Free Lunch by David Cay Johnston - Student Loans

I've been reading Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) by David Cay Johnston (click here to read my other entry on this book) and just got through Chapter 14, Indentured Scholars

.Reading this chapter made me feel very thankful that I do not have student loans. Johnston tells readers that about two-thirds of college students who graduate are in debt, and many owe more than their parents make in one or even several years!

Did you know that students borrow about $85 billion each year with repayment guaranteed by the federal government? Even if you go bankrupt, federal law prohibits clearing student loans!

In 2003, I was fortunate to hear Noam Chomsky give a talk at MIT. I don't recall the topic of his speech, but I clearly remember his argument that the purpose of student loans is to make young adults functional members of society. It does this by saddling students with debt that requires them to earn a decent salary, thus preventing them from protesting or other activities that students in the 1960s and 1970s did instead of working.

While Johnston doesn't explicitly state this conspiracy theory as Chomsky did back in 2003, he is equally harsh in his criticisms of the student loan industry (which has come under fire recently for kickbacks paid to universities).

Personally, I think the whole college / university system has gone mad. In recent years, tuition has skyrocketed at most colleges and admission rates have plummeted. Parents are grooming their kids at ever younger ages to get them into the "right" college.

It all seems crazy to me.

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) by David Cay Johnston

I've just started reading Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) by David Cay Johnston (click here to read Jonathan Chait's New York Times review of this book titled "Other People's Money" and published in February 2008).

Johnston is a Pulitzer Prize-winning investigative journalist for the New York Times whose best seller Perfectly Legal won the 2004 Investigative Book of the Year award (I've checked that out of the library as well but haven't started it yet).

Free Lunch is really a fascinating book!

I didn't know that the average income of the bottom 90% of Americans (what Johnston calls the "vast manjority") was just $29,000 in 2005 (down from $33,000 in 1973). To be in the top 10% of Americans in 2005, you only had to make $100,000 per year and to be in the top 0.1% just $1.7 million per year. Johnston wrote about this and more about income inequality in Chapter 2, Mr. Reagan's Question, named for Ronald Reagan's famous campaign question from nearly 30 years ago "Are you better off now than you were four years ago?" [Corrected May 27, 2008.]

I'm in the middle of Chapter 9, Goin' Fishin, which describes the subsidies that Cabelas, Bass Pro Shops, Wal-Mart and other large national chains receive from local governments. I'd heard much about the sins of Wal-Mart and reading this book finally made those comments hit home.

Most distressing was Chapter 3, Trust and Consequences, in which I learned that Amtrak -- while government owned -- uses privately owned tracks and has signed contracts to be financially responsible for all claims arising from Amtrak passengers, even if CSX or other parties are at fault for negligence. Since Amtrak is owned by the government, that results in taxpayers paying for all such claims even if a private company is at fault.

I will write more when I finish this shocking book!

Click here to view the table of contents and read a few excerpts from the author's website for this book.