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
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 collapse.
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
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
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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