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Execs Get Fortunes; Workers Get Shaft

  • Americans need to know that the gap between the "haves" and the "have-nots" is widening. Opposition to globalization may be the only way to curtail the disparity.
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By James Harrer

One way to understand the so-called "new global economy" touted by Federal Reserve Chairman Alan Greenspan is to take a look at the rip-offs of the financial magnates who created and rule it, such as Gerald Levin, chairman and chief executive officer (CEO) of AOL-Time-Warner-CNN Cable News, the world's largest media conglomerate.

Levin, who began his education as a rabbinical student and became a central figure in the tight inner circle that controls much of U.S. communications, ended up on top of this corporate heap by virtue of sharp stock speculation, shrewd interoffice intrigues, massive mergers and other iron-fisted moves required for advancing oneself in today's business.

But although Levin's media empire is huge, it is, despite glowing advance promises from the CEO, not profitable. The pressure-driven mergers of AOL, Time-Warner and Ted Turner's cable-news spread were hammered out to gain control of what Americans see and read in their "news," not with any sober calculation of future earnings.

The result is that there aren't any profits. In the first three months of this year, the giant media colossus fired more than 6,000 employees to "cut costs." A similar number found their wages slashed.

But when it came to setting his own remuneration, Levin was far more generous. He took home $157 million in pay and bonuses for the year 2000 -- astonishingly high compensation, considering the poor performance of his enterprises.

That CEOs whose companies function smoothly, even profitably, pay themselves outsized, often outrageous salaries and bonuses, has been generally accepted. GE's CEO, Jack Welch, draws $165 million a year in such emoluments, not including the $1.3 million in insurance premiums the company shells out for him.

And that does not represent a record high. Steven P. Jobs, head of Apple Com puter, paid himself $775 million and change for services rendered last year. San ford I. Weill, chairman of Citigroup, a much-merged international banking and insurance conglomerate, took home $315 million while his company came under criminal investigation for stock manipulation and money laundering in several no torious cases going back to the mystery death of Israeli spy and billionaire swind ler Robert Maxwell in 1991.


Executives who receive such princely pay offs from companies they are actually running into the ditch profiteer best by loudly touting the stock they receive as part of their bonus at its high point. Mar ket-watchers cite the example of David Rickey, former chairman of Applied Mi cro-Circuits, who received some 800,000 shares of his company as part of his 2000 bonus.

Mr. Rickey sold all these shares in mid-2000 when they stood at about $100 each, and then calmly watched as the share price plunged to $20 -- a fall he was in a position to anticipate, but no one else.

As for the workers, laborers and technicians who actually produce the goods and wares these companies are supposed to sell, their wages have risen a meager 2.5 percent since 1995 -- the pay of skilled and apprentice workers has actually de clined, while the "executives" cleaned up.

This kind of monstrous wealth transfer -- with just about all the nation's real income shifted from workers to speculators, raiders, currency manipulators and, in large proportion, to self-styled corporate "executives" -- is hailed by Greenspan as "keeping inflation at bay."

Free trade is at the root of this excessive disparity in wealth. As U.S. workers are increasingly forced to compete with Third World labor pools, wages are being driven down.

Speaking before Congress on April 3, Greenspan scolded the growing anti-globalization movement, saying they're "wrong-headed" for opposing free trade.

"It is essential to note that probably the best single action that the industrial countries could actually take to alleviate the terrible problem of poverty in many developing countries would be to open, unilaterally, markets to imports from these countries," Greenspan said. "These countries need more globalization, not less."

Copyright 2001. All rights reserved.