America Needs a Social Innovation Revolution. Here’s Why.
C.A.R.E.S. Act Favors Big Corporations & Wall Street
The federal government’s latest relief bill, the $2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security Act), largely shafts small business in favor of large corporations and Wall Street, effectively green-lighting a nightmare economy in which the middle class, poor and small enterprises are left to suffer while big business remains insulated from failure by an overly generous corporate safety net. To wit:
Small Business (SBA/PPP)
Fed/Treasury Hedge Fund for Big Corporations/Wall Street
For more context, watch this CNBC interview with VC investor Chamath Palihapitiya:
The rich are getting richer but you are not
In 2018, Uncle Sam gave corporations and rich people a $1.9 trillion tax gift. In any other country such a massive payoff for services not rendered would lead to civil unrest. More than 80% of household stock ownership is controlled by rich Americans, chief beneficiaries of such government bailouts as TARP and the CARES Act. But it’s the ultra-wealthy, the 1%, that reaped the most benefits. Between 1989 and 2016, the 1% boosted their wealth by $19 trillion. It’s high time you stood up for your rights, especially since many of you barely make more than you did in 1973 (see #2 below).
To kill time in quarantine, bored rich people are shopping online for $500,000 bracelets. Why not? The richest 1% now owns 50% of the world’s wealth. How are you spending your time? Standing in line to buy groceries? Huddled at home sewing masks? While you try to survive, the rich are cleaning up due the Federal Reserve’s new “limitless” bond and ETF purchasing power.
How sick and twisted is a society where grocery clerks make $12-15 per hour working on the frontline, risking their lives and getting sick to feed America, while the 1% abuse government bailouts?
World’s Richest Billionaire Tells Employees: Sorry I Can’t Afford Masks and Sterilization But Show Up For Work or Else!
Despite his vast wealth, Amazon fired two Seattle warehouse employees who publicly criticized safety and working conditions during the Covid-19 pandemic, and terminated another early in Staten Island, New York.
New York Attorney General Letitia James, meanwhile, is investigating whether the company broke the state’s whistleblower laws by firing the warehouse worker who helped organize a Staten Island protest. Amazon is allegedly trying to quash complaints about not providing employees with promised masks while offering inadequate “sanitization and disinfection” procedures to keep employees safe.
If firing $15-an-hour employees for trying to tell the truth isn’t bad-enough billionaire behavior, Amazon
has changed its unpaid leave policies starting May 1. Now, hourly employees — the vast majority of the company’s approximately 250,000 warehouse workers who cannot work from home — must request an unpaid leave of absence to continue staying home if they do not want to work out of fear for their safety during the Covid-19 pandemic.
To alleviate any feelings of guilt, Bezos has donated $100 million to food banks. At Amazon, however, the beatings will continue until morale improves.
You’re earning about the same as workers did in 1973
As unbelievable as it may sound, the typical, non-management private-sector worker makes about the same as people did when the Kent State shootings in Ohio were captivating the nation. One factor is the destruction of the blue-collar job, which has been underway since the late 1970s. Between 1980 and 2017, the U.S. lost nearly 8 million manufacturing jobs.
In a March 1993 issue of The Nation, Noam Chomsky, observed that real wages had fallen to the level of the mid-1960s, part of a wage stagnation trend that spiked sharply in the mid-1980s.
After adjusting for inflation, average hourly earnings peaked more than 45 years ago. The $4.03-an-hour rate earned in January 1973 had the same purchasing power that $23.68 did in 2018. Here’s why wages continue to stagnate to this day:
Corporate America has lost its moral fiber
In the past six weeks, 30 million Americans applied for unemployment. In spite of a pandemic that deprives American workers of their income, ethically-challenged corporate executives saw it fit to apply for SBA PPP loans, despite having made tens of millions in profits in 2019. It continues a long tradition of business scams that culminated in the biggest corporate fraud ever, $6 trillion spent on stock buybacks that helped inflate earnings-per-share metrics while boosting executive bonuses.
The CARES Act proves once again that unscrupulous corporate executives will not let any crisis go to waste. The $349 billion Paycheck Protection Program (PPP), a forgivable loan plan, was designed to let small businesses pay employees during the Covid-19 crisis. But more than 80 public companies, some with market capitalizations of as much as $405 million applied for PPP assistance, including Ruth’s Chris and Shake Shack.
Both companies agreed to return the money. But the fact that Ruth’s Chris — a steakhouse chain that earned a $42 million profit on $468 million in 2019 revenues — would tap the PPP program for a $20 million loan, is indicative of the depraved state of business ethics.
How Multi-Million (and -Billion) Dollar American Corporations Abuse the Small Business Paycheck Protection Program (PPP)
The SBA reports an average loan size of $206,000 but, as the table below shows, the program was freely abused by too-large “small businesses.” That such billion-dollar organizations as the Los Angeles Lakers and Shake Shack would apply for PPP loans underscores the startling decline in business ethics. Some companies have returned the money but many have not. Loans have already been approved for more than 1.6 million businesses.
You’re paying too much for healthcare
Wonder why you’re paying so much for healthcare? You’re not alone. Need to have “minimally invasive” surgery to remove your gallbladder? In Saint Augustine, Fla., one hospital charges $40,000 to remove a gallbladder, another in Orange Park, Fla., charges $91,000. That pacemaker implant grandma needs costs $71,000 in Livingston, N.J., while a hospital in nearby Rahway, N.J., charges $102,000. Ridiculous, right?
Ever wonder how hospitals ever deviated so far from their stated goal of helping the sick? So do we. Particularly after a staffer’s experience with Dignity Health. A review of America’s disconcerting healthcare trends is enough to make you spit up your hospital dinner. It’s high time that healthcare is disrupted.
This summer, we experienced firsthand what a scam America’s hospitals have become. In July, one of our staffers skidded off his bicycle. He decided to visit St. Rose San Martin’s emergency room, a non-profit hospital owned and operated by Dignity Health. Total bill for a 90-minute wait and 30-minute exam? A whopping $3,094, excluding x-ray charges.
Hospitals Tell Doctors They’ll Be Fired If They Speak Out About a Lack of Gear
Hospitals are threatening to fire health-care workers who publicize their working conditions during the coronavirus pandemic — and have in some cases followed through.
Ming Lin, an emergency room physician in Washington state, said he was told Friday he was out of a job because he’d given an interview to a newspaper about a Facebook post detailing what he believed to be inadequate protective equipment and testing. In Chicago, a nurse was fired after emailing colleagues that she wanted to wear a more protective mask while on duty. In New York, the NYU Langone Health system has warned employees they could be terminated if they talk to the media without authorization.