by Dr. Manning Marable, April 1998

America's corporate and financial elite are celebrating their successes as never before. The stock market has reached 9,0000 points, a record high, generating billions of dollars in profits. Inflation remains under control, and the cost of borrowing money from financial lending institutions is in real terms the lowest in two decades. Internationally, Soviet-style Communism has disappeared, and most socialist parties in Africa, Europe and elsewhere have capitulated to neoliberal capitalist policies. Globalizaton and high technology allow capitalists to move billions of dollars and potentially millions of jobs in microseconds.

Why is the corporate and financial establishment so smug? A recent report from the Internal Revenue Service indicates that in 1995, the richest 1 percent of the nation's entire wealth. There is, in short, a substantial economic ruling class in the United States. As of 1995, about four million Americans had gross assets of at least $600,000. Over 1.1 million Americans in 1994 reported annual incomes of $200,000 or more. Of this wealthy group, 1,137 individuals paid no income tax whatsoever. Investments in tax exempt bonds, interest payments and other accounting strategies are used to reduce rich people's taxes. According to the IRS, about 43 percent of all people earning over $200,000 annually have an "effective tax rate" of 24 percent of less.

Even when executives grossly mismanage their corporations, losing hundreds of millions of dollars, they are generously rewarded with huge bonuses, fat stok options and other generous perks. For example, Delta Airlines CEO Ronald Allen was fired last year, but he is guaranteed an annual consultant salary of $500,000 for the next seven years. Wayne Calloway left his CEO position at PepsiCo in 1996, but got an additional $500,000 ub salary and an extra $1.5 million as a bonus. PepsiCo's representative explained that Calloway's cash was for "advice, counsel and transition support." Lawrence Lasser, currently the CEO at Putnam Investments mutual fund, will receive after his retirement an annual payment of $1.5 million for life.

Most people have heard about the recent economic problems of many health maintenance organizations or "HMOs," like Oxford health Plans, Inc. According to the New York Times, Oxford lost $291 million in 1997 alone. The company's stock has plummeted from $89 a share down to $15 a share. Oxford has fallen months behind in paying the plan's nurses, doctors and other health care providers. So not unexpectedly, Oxford founder and chairman, Stephen F. Wiggins, was pressured to resign.

What Wiggins received for his gross mismanagement was obscene. For starters, upon his resignation, Wiggins received a cash payment of $3.6 million. He will be paid $1.8 million annually for three more years. Wigginss will continue to receive health insurance, as well as the services of a secretary. Oxford will pay for his private membership in the Harvard Club in New York City and the Wee Burn Country Club in Darien, Connecticut. Oxford even agreed to reimburse Wiggins for the cost of having his income taxes prepared until 2002.

Who pays for the perks to Wiggins and his corporate pals? American working women and men do.

Corporations are cutting back against workdres across the board. One major strategy is to replace full-time employees with part-time and temporary workers. At Microsoft, for example, there are about 17,000 domestic employees and 5,000 temp workers. Over 1500 temps have worked at Microsoft more than one year; and about 500 working more than two years. During peak periods, many Microsoft temps are pressured to work 70 to 80 hour weeks. The New York Times has estimated that Microsoft may save $24 million a year for workers have mushroomed from 800,000 to 2.5 million. More than 10 percent of the labor force at one out of five U.S. corporations are temps.

Capitalism "works" only if you're among the most affluent classes in society. But mosts Americans- black, Latino, Asian, and American Indians, and white- are "losers" in a system that puts profits ahead of people.

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