Friday, December 20, 2013

Charity by the rich and large corporations is pure vanity or public relations. That's it.

I am not against charity. I think when it comes to charity most regular people have good intentions. But when I see charity turn into star-studded gala events that are reported as the hottest “ticket” in town, like the annual Robin Hood Foundation Ball, then I think it’s all one big vanity show.

It’s the elite wanting cleanse their consciences in a very ostentatious and very phony display of “compassion” for the less fortunate, even though I am sure that 99.9% of the attendees, if you asked them, would be pro-austerity, pro-entitlement reform, pro-deregulation, union bashing, anti-minimum wage ideologues.

In fact, I know it.

I’ve read statements by Paul Tudor Jones, the billionaire hedge fund trader who is also the founder of the Robin Hood Foundation. Here's one of his quotes on America's debt:

"We borrowed against the future, and soon we will have to pay."

Or what about another billionaire hedge fund guy, Stanley Druckenmiller, who is also very much a part of the charity elite and a big contributor to the Robin Hood Foundation. He's been going around screaming that we have an "entitlement problem."

These plutocrats may contribute to charity, but their overriding ideology is the usual out of paradigm stuff that is so much a part of the austerity push, which is literally impoverishing people.

So it’s really a very self centered vanity thing that they're doing. Yes, they’re raising money for the poor and the underprivileged, which is nice; however, it is their beliefs and more importantly, their inordinate influence on policy as a result of their money and status that keep the poor and underprivileged, well, poor and underprivileged. It’s almost like they want the downtrodden to stay down just so they can have their galas showing everyone how wonderful and generous they are.

The other type of charity that I am against, which is just as disingenuous and self-serving is corporate charity. For me, the best corporate charity you can have is just for corporations to pay their workers well. That’s all the “charity” they need; simply a decent paycheck, a living wage. I’m not talking about top executives either, who are routinely showered with lavish paychecks, but about all the workers right down to the guy stocking the shelves or, sweeping the restrooms.

Low wages have become a corporate ethos. It’s one thing to say, “That’s the only way we can make money,” which is what Wal-Mart founder, Sam Walton famously said:

"I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment." -Sam Walton

However, it's another thing when corporate profits go up, up and up, relentlessly, as they have been, while worker pay has been going the other direction: down, down, down. It’s not even as if worker pay just stayed steady, it’s been falling. Look at the chart below.

Corporate profits vs labor share

That is corporate profits against the share that labor gets. This means that all the gains in productivity have gone to firms and none of that has gone to workers. That means all the money has gone to the firms and nothing to the workers. In fact, workers have had their pay reduced.

A system like this can only exist where there is crushing, vice-grip control over economic policies affecting taxation, labor, income, trade, investment, etc. It's literally an industrial dictatorship. That's exactly what we have. It benefits large corporations and the plutocrats that control them. Nobody else.

So feel free to scoff at their phony and vane displays of charity.


Unknown said...

I thought Sam Walton was a Christian? Maybe a Calvinist?

But here's how I would combine initial low wages (if necessary) in fiat with ultimate justice; pay the workers with common stock too. Then their sacrifices now might well pay off later.

A warning for those billionaires and cheap-skate corporations:

Come now, you rich, weep and howl for your miseries which are coming upon you. Your riches have rotted and your garments have become moth-eaten. Your gold and your silver have rusted; and their rust will be a witness against you and will consume your flesh like fire. It is in the last days that you have stored up your treasure! Behold, the pay of the laborers who mowed your fields, and which has been withheld by you, cries out against you; and the outcry of those who did the harvesting has reached the ears of the Lord of Sabaoth. You have lived luxuriously on the earth and led a life of wanton pleasure; you have fattened your hearts in a day of slaughter. You have condemned and put to death the righteous man; he does not resist you. James 5 New American Standard Bible (NASB)

Btw, gold does not rust so what must be in mind is failure to use wealth, i.e. hoarding.


The generous man will be prosperous, and he who waters will himself be watered. Proverbs 11:25

NeilW said...

Charities are not in the charity business. They are in the moral guilt business. They create it, make people feel it and then provide a way of assuaging it that keeps them all in jobs and on the invite list at swish parties.

The mission should be to put food banks out of business.

Charles DuBois said...

Great comment:
One quibble: you know from the Kalecki equations that lower wages do not increase profits (at the macro level). This is because lower wages mean less spending and lower corporate revenues -so it's a wash.
As you also know, from the Kalecki equations, that the large deficits have been the primary driver of profits, with other factors kicking in more recently.

Having said that, your point is still valid. The business mentality should reflect Henry Ford's statement "If I pay my worker's more, they will be able to buy more of my cars". That is, these higher "costs" are offset by higher revenues, as Kalecki demonstrated. Then everyone wins,unlike the situation today.

The Just Gatekeeper said...

I agree Mike. My impressions have been similar. Its the old Andrew Carnegie strategy: take advantage of your workers, treat them like shit for low pay. Then build a bunch of libraries and put your name on them. Soon, everybody forgets what you actually did and thinks fondly of you...

googleheim said...

How much of these monies get stuck in the charity ?

The Conference on Holocaust reparations is holding on to millions for what reason ?

A lot of the money goes to CPAs and Lawyers ?

Anyway, the Bernanke spike last week in the stock market was fabricated to make his going out party look great.

Just like they inflated Apple stock a few years ago to inflate the ego of Steve Jobs before he left the planet. Apple for a day was the "biggest" company on the planet over ExxonMobil.

Just look at Warren Mosler's blog about Bernanke's legacy.

googleheim said...

We don't make things anymore
so higher wages don't mean you can buy more cars.

Food banks don't advocate for people's minimum wages because they don't want to loose business and customer base.

As for farmers, are they stinking rich ?