Jones, Geithner & Rahm

It's not that I'm a Van Jones fan, but the way that the Obama administration buckles to the rightwing nuts over a few statements the environmentalist made. I can't help but see it in light of how, in the face of actual substantial issue (not paying taxes) that Timothy Geithner was "too important" to fail. It's a systematic failure of this administration.

Van Jones is probably just as important a figure to the environmental movement as Geithner is to Wall Street, and this dosn't bode well for progressive environmental policies.

Who knew that Obama was so wedded to Rahm Emanual? Rham isn't single-handedly making Obama a failure at this point, but it does seem like Obama has become a delegator to a staff that only views things through re-election & money.

Markos:

Once upon a time, this site was focused on "more Democrats", but we are getting a good schooling on the power of bad Democrats to stymie and hamstring the progressive agenda. Hence, we have evolved into "better Democrats".
Good to see.

Glenn:

If one were to analyze matters from a purely utilitarian perspective, one could find ways to justify the White House's attempt to write a health care plan that accommodates the desires of the pharmaceutical and drug industries [mandates (i.e., 50 million forced new customers) plus government subsidies to pay their premiums plus no meaningful cost controls (i.e., no public option)].  All other things being equal, it's better -- from the White House's political perspective -- that those industries not spend vast sums of money trying to defeat Obama's health care proposal, that they not pour their resources into the GOP's 2010 midterm effort, that they not unleash their fully army of lobbyists and strategists to sabotage the Democratic Party.  That's the same calculating mindset that leads the White House to loyally serve the interests of the banking industry that caused the financial crisis (we don't want to make enemies out of of Goldman Sachs or turn investment bankers into GOP funders).  Indeed, that's the same mindset that leads the White House to avoid any fights with the Right -- and/or with the intelligence community and permanent military establishment -- over Terrorism policies (there's no political benefit to subjecting ourselves to accusations of being Soft on Terror and there's plenty of reasons to cling to those executive powers of secrecy, detention and war-making).

In essence, this is the mindset of Rahm Emanuel, and its precepts are as toxic as they are familiar:  The only calculation that matters is maximizing political power.  The only "change" that's meaningful is converting more Republican seats into Democratic ones.  A legislative "win" is determined by whether Democrats can claim victory, not by whether anything constructive was achieved.  The smart approach is to serve and thus curry favor with the most powerful corporate factions, not change the rules to make them less powerful.  The primary tactic of Democrats should be to be more indispensable to corporate interests so as to deny the GOP that money and instead direct it to Democrats.  The overriding strategy is to scorn progressives while keeping them in their place and then expand the party by making it more conservative and more reliant on Blue Dogs.  Democrats should replicate Republican policies on Terrorism and national security -- not abandon them -- in order to remove that issue as a political weapon.

If those Emanuelian premises are the ones that you accept, if you believe that Obama should be guided by base concerns of political power, then you're likely to be satisfied with the White House's approach thus far -- both in general and on health care specifically.  That would also likely mean that you're basically satisfied with the behavior of Democrats during the Bush era, and especially since 2006 when they won a majority in Congress, since that is what has driven them for the last decade: all that matters is that we beat the Republicans and we should do anything to achieve that, including serving corporate donors to ensure they fund Us and not Them and turning ourselves into war-making, civil-liberties-abridging, secrecy-loving GOP clones in the national security realm.

But that isn't what Obama pledged he would do when he campaigned...

...Even for those of you who are willing to justify anything and everything in the name of "political pragmatism," betraying clear campaign commitments and constantly exhibiting contempt for core progressive values doesn't seem to be working very well as a political strategy, to put that mildly.

I realize the links are a bit dated, but I am on a different timeline this summer.

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Netroots Nation

Bound for Netroots Nation tomorrow. Looks like I'll be driving over to Pittsburgh tomorrow night. On Thursday morning, I'm on a "Global Netroots" panel and then Markos and I are doing a book signing around noon, and then I'm just planning on hanging around, attending panels and parties, and being in Pittsburgh for a few days with 2000 others from the netroots. cya there.

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PA-Sen: Netroots Overwhelmingly Support a Draft Sestak Effort

As many of you know, over the last five days, the Progressive Change Campaign Committee, in partnership with a number of progressive organizations and blogs including Senate Guru, asked those in the netroots, "Should a Draft Sestak movement be created to take on Sen. Arlen Specter in the Pennsylvania Democratic primary?"

Netroots for SestakThe results are in and they are overwhelming.  85% of Pennsylvanian respondents and 86% of respondents nationally want Democratic Congressman Joe Sestak to challenge Arlen Specter in the 2010 Democratic Senate primary.  The poll has even gotten the attention of Congressman Sestak, as the PCCC points out:

"I am honored that so many of you took the time to vote in the recent grassroots Straw Poll. Let me tell you, I and many others were paying attention. If I decide to run it will be in large measure because of the grassroots energy of so many people like you. Until I and my family make that decision, please accept my thanks and my best wishes as you continue be active participants in our people-powered democracy. Thank you so very much!"

Due to such an overwhelming response, a Draft Sestak Fund has been created on ActBlue.  To contribute and further encourage Congressman Sestak to enter the race, click on the image below:

Draft Sestak Fund


If you need any additional motivation to contribute to this effort to draft a real Democrat to oppose Specter in the primary, consider Specter's actions since announcing his Party switch:

1. Specter opposed the Obama budget.
2. Specter opposed the "cramdown" mortgage/bankruptcy reform, siding with banks over families.
3. Specter reiterated his opposition to the Employee Free Choice Act.
4. Specter reiterated his opposition to President Obama's nomination of Dawn Johnsen to the Office of Legal Counsel.
5. Specter announced his support for Republican Norm Coleman over Democratic Senator-elect Al Franken in Minnesota's Senate race.
6. Specter promoted a website that appeared to raise money for cancer research but, in actuality, simply raised money for his campaign.
7. Specter denied reports that he told President Obama that he would be a "loyal Democrat" despite multiple reporters sticking to their story.

The netroots have displayed overwhelming support for Congressman Sestak to take on recently-Republican Arlen Specter.  Help the effort by contributing to the Draft Sestak Fund.

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CEOfail: Frank Stronach.

"This is a corporation that finds itself in financial distress due to recklessness and greed, a lot of these people should be fired, not awarded a bonus. This is horrible. It's outrageous." President Obama

Amidst a global economic meltdown in which millions have lost their, homes and hope - corporate greed continues.

Even though I believe in capitalism its crystal clear that the guys and gals that got us into this mess still don't have a clue.  That's right - I'm talking about executives who do not care/understand the implications of taking large bonuses without regard to what it will do to the economy as a whole and are certainly a major factor in getting the world into this mess.

As many Canadians nurse their post-New Year's Eve hangovers and ponder what further economic storms await, Canada's top corporate executives can take some comfort in knowing they have already earned as much as the average worker will earn in all of 2009.

A new analysis by the left-leaning Canadian Centre for Policy Alternatives concludes the country's richest corporate executives will have pocketed an average of $40,237 by (January 1, 2009) 9:04 a.m. Friday morning.

"By the time your computer has finished booting up on your first day back after the New Year's holiday, the average CEO would have already banked what took the average Canadian worker an entire year's worth of work to earn," the report states.

"Many of the top 100 include Canada's big bank CEOs, who recently received billions in federal government bailout money to purchase mortgage loans."

Prepared by economist Hugh Mackenzie, the report finds the top 100 CEOs of publicly traded corporations averaged more than $10 million in pay apiece in 2007, the last full year for which figures are available.

That kind of money would buy 44 high-end Porsches or five $2-million condos.

The collective billion-dollar bonanza -- a 22 per cent increase over the year before -- set a record and followed a decade of unprecedented pay increases, the analysis finds.

Roger Martin, dean of the Rotman School of Management, said the gap between low-end and highest-end earners began growing in earnest in the 1980s and accelerated in the 1990s, something Martin attributed essentially to greed.

The question for CEOs changed from how much they felt they needed to earn to how much could they could "possibly extract" from their companies, an attitude detrimental to the company and their employees.

"Rank-and-file employees will increasingly feel like, `Wow, I'm working hard to make that guy really, really rich. Do I like that?"' Martin said.

The report is based on disclosures made by companies trading on the Toronto Stock Exchange. The compensation includes salaries, bonuses, proceeds from stock options and other payouts.

That's it - I've had enough.  

Most of the population kind of has a feeling about the shadiness of these crooks executives - but they are sketchy on the details.  So here is my challenge to my fellow citizens/bloggers.  

Let's expose them.  

Let's get the word out on each and every one of these people who's greed helped to bring down the economy on our backs while they lined their pockets. A sort of pay-it-forward to reveal and ridicule the arrogance of those executives that are damaging us all with their greed run amok.

I will start it off below on one of the biggest offenders - but to ensure that we get the message out and get no duplication - I ask that if you decide to help - please follow this format:

1) Keep the titling. Eg. CEOfail: [CEO of choice]

2) Leave me your email address/link to your post at my blog - http://kickinitwithcg.blogspot.com/ so that I can compile them all.

3) Make it good.

CEOfail: Frank Stronach.

Frank Stronach is an Austrian-Canadian businessman. He is the founder of Magna International, an international automotive parts company based in Aurora, Ontario, Canada, and Magna Entertainment Corp., which specializes in horse-racing entertainment.

Magna is Canada's largest automobile parts manufacturer, and one of the country's largest companies. It also owns the successful Magna Steyr automobile production company of Austria. Founded in 1957 by Stronach as Multimatic, the company merged with Magna Electronics in 1969, and the combined company became Magna International in 1973.

Magna manufactures auto parts that are primarily supplied to General Motors, Ford Motor Company, and Chrysler LLC. In addition to the Big 3 automakers, Magna's major customers include Volkswagen, BMW and Toyota. In Europe, Magna Steyr holds contracts for the assembly of the Jeep Grand Cherokee, Chrysler Voyager minivan and BMW X3 SUV. Magna has a relatively minimal presence in Asia with just 3 manufacturing centres in South Korea, 1 in Kunshan,China and 2 engineering centres in South Korea and China.

On Feb. 27, 2009 - Magna International Inc. announced a controversial decision to cut its dividend in half. The move angered some shareholders, but the Canadian parts maker said the cut was prudent given the tough times in the auto industry.

That explanation fails to account for one thing: Over the nine months prior, Magna bought two golf courses from an entertainment company run by Chairman Frank Stronach, spending $84 million on the purchases. That surpasses what was saved by the dividend cut. "That's our Frank," says Claude Lamoreaux, chief executive of the Toronto Teachers Pension Fund, which now has less than 1% of Magna stock after dumping a chunk of it last year. "He's a successful entrepreneur, but then you have these transactions that many people find questionable." Outside investors weren't the only ones anxious about the business practices of Stronach, whose company has emerged in the winter as a leading candidate to buy Chrysler Group. In May, four longtime board members (out of 12) will be resigning.

A close look at Magna reveals a complex and interesting company. True, Stronach is a brilliant entrepreneur who delivers results. The company made $528 million last year on revenues of $25 billion, even as many parts makers succumbed to bankruptcy.

But there's another side to Magna's indomitable chairman, a side some investors don't like. Although Stronach owns just 5% of the common stock, he controls the business outright, with 67% of the Class B voting stock. Critics complain he is overpaid and uses his power to approve rental agreements and other real estate deals between Magna and companies he controls. Board members say they've had to wrestle with Stronach to keep Magna from diversifying away from the parts business and into riskier ventures such as Stronach's passion, Thoroughbred racing. "It wasn't just one thing," says the departing Richardson. "You're constantly in a position of having to look out for the shareholders. They don't have a loud voice."

While he is respected in the auto industry, Stronach has few fans in the corporate governance movement. He started Magna in a garage 50 years ago and has been known to take a cavalier attitude toward complaints. When shareholders challenged his salary in 2004, he told Toronto's Globe and Mail: "It's a free country. If they don't like it, they should sell their shares."

Ah - the salaries.... Considering he's a Canadian titan and the founder of the largest auto-parts manufacturer in the world, Frank Stronach makes a surprisingly modest salary as the chair of Magna International. In 2007, for example, he pulled down a base of $215,000.  

But wait.

Since 2002, including bonuses and payouts - Stronach has paid himself $168 million, for an average of nearly $34 million a year, according to the company's annual reports. His pay amounts to 3% of profits in a typical year. In 2007, Stronach took home $40.6 million for business development, consulting and other services, according to a company information circular released.  That's $40 million in consulting fees to one man in one year, or about $800,000 per week.  But that's not all. Stronach also exercised $27.3 million in stock rights and was paid $2.47 million in "other" consulting fees, bringing his total compensation package to $70.6 million in 2007 alone. That's set a new Canadian record, eclipsing the previous mark of $58.1 million held by none other than Frank Stronach.  Magna's stock value shrank by 15.45 percent over the same period.

In the circular, the company's corporate governance and compensation committee said Stronach deserved the money. Even though he's a part-timer now, Stronach continues to play a pivotal role in all aspects of the company, including international expansion, product innovation and relationships with unions.

"The committee continued to recognize that Mr. Stronach continued to have business activities unrelated to Magna, but that this does not detract from the quality and value of his ongoing contribution to Magna," said the report.
An odd comment, given that Stronach is under fire precisely because his other business activities are, at least to some shareholders, too related to Magna.

For years, Stronach has been using the profits from MI Developments, Magna's real-estate arm, to prop up his money losing racetrack business, Magna Entertainment. Stronach is also chairman of both those companies.
Stronach came forward with a proposal this week to spin off Magna Entertainment. It's a complicated three-way transaction, a few components of which have met with opposition from some shareholders.

Under Stronach's plan, Magna would guarantee a $1-billion loan to a new company that would replace MI Developments as the landlord for many of Magna's factories. Some analysts say that's not a good use of Magna's balance sheet.

And one MI Developments shareholder says the deal would effectively result in Stronach getting a $300-million payout.
"We do not understand how this deal can be justified," said David Green of Hotchkis and Wiley in a statement. "The transfer of approximately $300 million, greater than 20 per cent of the stock's current market cap, to Frank Stronach in order for him to now support the deal is appalling. We strongly object to this transaction in its current form and intend to vote our shares against it.

But here is where it gets even more appalling...  A few days ago:

Magna is asking employees who are not already doing part-time work to take voluntary pay-cuts based on the size of their salaries in an effort to cope with the recession.

Magna is asking all European employees who are not in part-time work to do so, but the request affects 3,500 of them in Styria. Some 4,000 Magna employees at Graz and Albersdorf are doing part-time work that has effectively lowered their incomes by 10 per cent and will not be asked to take voluntary pay-cuts.

This is just one in a series of Magna plant shut downs or job losses across the world.  And last week - it was reported today that Magna International had "taken an axe to executive pay." It didn't.

In 2009, company officials will not take home as much as they have in other years, but not because of any cuts agreed to by management. In fact, if truth be told, the Magna gang will get more than can be justified by the Magna constitution, which has been used so well to justify past compensation levels.

Magna has long justified its huge executive paycheques, not to mention the mountain of cash it hands out to part-time chairman and controlling shareholder Frank Stronach, by noting executive compensation is tied to a fixed percentage of pretax profits by the so-called Magna Carta. Nobody has cut that percentage. What has happened is that Magna's pre-tax profits have been hit hard by economic turmoil and exposure to the fate of Detroit's Big Three.

During tough times, Magna executives are supposed to live off their salaries, which are still a significant six figures. The salaries have not been cut, either. Instead, the company is topping them up because performance pay has tanked with profits and Magna now insists that its officials, including Stronach's daughter Belinda, should not be forced to live up to the spirit of the constitution.

Stronach loves to boast about being different. He has repeatedly insisted that the big payouts only happen at Magna when there are plenty of pre-tax earnings to distribute to executives, workers, investors and society. But under the direction of lead director Mike Harris, who took home more than $600,000 last year for being a self-proclaimed slave to the Magna constitution, the rules have been changed to ensure Magna executives don't have to survive on less than seven figures. That's despite all the money they accepted under constitutional rules in the past.

Stronach himself isn't getting a top-up, which he would not deserve. After all, his real role at Magna is to make sure that the executives and directors he put in place live by the constitution that justifies his dual-share powers and multi-million-dollar consulting fees.

If an executive can rake-in millions of dollars in compensation regardless of performance, what's his personal incentive to make his company profitable? We see athletes whose performance languishes after signing guaranteed contracts. If pay, pensions and perks are equally guaranteed, should we be surprised to see CEO's doing the same?

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A Progressive Blogger for State Delegate

Along my Facebook feed this afternoon came some exciting news: Judd Legum is running for State Delegate in Maryland.

Those who have been reading blogs and have been active in the Netroots for a long time will likely know of Legum, who as research director for the Center for American Progress started up the Think Progress blog back in 2003. A Pomona College and Georgetown Law grad, he also served as research director for Hillary Clinton's presidential campaign. In the time since he has been blogging about Maryland politics, focusing in particular in bringing transparency and accountability to the state (see, for instance, his reporting on the General Assembly banning, then lifting the ban, on Facebook) -- a focus that he would continue if elected next fall.

From his Act Blue page, where he's beginning to raise funds for his campaign, here is part of his explanation on why he jumped in this race:

I'm running because we have big challenges in Maryland - a failing effort to restore the Chesapeake Bay, a looming energy shortage and a struggling economy. I know we need new energy and a new perspective in Annapolis if we want to stop treading water and start making progress. I'm confident that, together, we can make this state a better place.

Maryland has multi-member districts, with most districts sending three members to the House of Delegates. The 30th, where Legum will run this cycle, is somewhat competitive, electing two Democrats and one Republican -- though the one Republican only very narrowly -- in 2006. Legum knows the area well, was born and raised in the district, and would serve Maryland's voters well if elected. I have already contributed to his campaign, and I'd recommend you head over to Act Blue and throw him a few dollars to help get him started on a strong note as well.

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