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When Martin Shkreli, who had raised the price of an AIDS drug called Daraprim 5,000 percent while he was CEO of Turing Pharmaceuticals, was arrested for eight counts of unrelated securities fraud, the court found it very difficult to find a jury of his peers who said they could judge his case without prejudice. His infamous act had received wide coverage in the country. The judge and the attorneys had to question over 200 prospective jurors before they could choose 12 with two subs. I thought the comments of a few citizens when asked to sit and judge him in court were fascinating:
(1) “I’m aware of the defendant and I hate him. I think he’s a greedy little man.”
(2) “Both of my parents are on prescriptions that have gone up over the past few months, so much so they can’t afford their drugs. I have several friends who have HIV or AIDS who, again, can’t afford the prescription drugs that they were able to afford.”
(3) “He’s the most hated man in America. In my opinion, he equates with Bernie Madoff with the drugs for pregnant women going from $15 to $750. My parents are in their eighties. They’re struggling to pay for their medication. My mother was telling me yesterday how my father’s cancer drug is $9,000 a month.”
(3) “When I walked in here today I looked at him, and in my head, that’s a snake—not knowing who he was.”
(4) “From everything I’ve seen on the news…I believe the defendant is the face of corporate greed in America.”
(5) “The only thing I would be impartial about is what prison this guy goes to.”
(6) “I don’t think I can (serve) because he kind of looks like a dick.”
(7) “Is he stupid or greedy? I can’t understand.”
These peers of Shkreli were among the many rejected for jury duty by the court. His jury finally announced him guilty and he is awaiting sentencing. He could get 20 years. The New Yorker ran a great cartoon about jury trials. Each of the jury members in the box has an orchestra instrument and the prosecuting attorney is conducting with a baton. The defendant’s attorney looks at him and says, “I won’t lie to you. Chopin’s “Funeral March” is a bad sign.”
Do The U.S. One Percent Really Give A Damn About The 99 Percent?
Many years ago the blind Helen Keller made this astute observation about the wealthy in America: “The few own the many because they possess the means for livelihood of all….The country is governed by the richest, for the corporations, the bankers, the land speculators, and for the exploiters of labor.” So, evidently there is nothing new under the sun—even when it’s eclipse casts a dark shadow.
Among the sources for this column is Donald Jeffries’s book “Survival of the Richest: How the Corruption of the Marketplace and the Disparity of Wealth Created the Greatest Conspiracy of All.” He uses the governing ability of GE’s Jeff Immelt to discuss what is wrong with present-day America. Immelt has just “retired” from GE, but during his administration GE’s stock lost 50% of its value, he closed 31 factories, and laid off 19,000 workers. Although Forbes magazine, the Bible of business, ranked him as the fourth worst CEO in America in 2012, he still averaged a salary of $12 million over his years at GE. His retirement package is worth $211 million. Jeffries writes: “Maybe he had some hidden talent.”
Jeffries uses the Waltons of WalMart as another example of the One Percent not giving a damn about the 99 Percent. The four surviving Walton children have garnered about $140 billion to become the richest family in the world. When WalMart hires new employees they attend orientation sessions where they are taught how to apply for welfare, food stamps, and other government benefits. WalMart has more than a million employees, with half of them making less than $25,000. That’s close to poverty levels for a family of four. WalMart actually ran a food drive during the 2013 holiday season—for its own employees! The U.S. taxpayer supplies about $6.2 billion each year to poorly paid WalMart employees through food stamps, health care, and welfare payments while the Walton family members live in luxury. Over one-fifth of all food stamp funds spent in the U.S. go to WalMart. Alice Walton is the second-richest woman in the world and lives in a $25 million apartment on Park Avenue in New York City.
Is Your House Mortgage Still Worth More Than Your House?
When the Great Recession started by all the big banks in the country in 2007-2008, the nine biggest that had been selling crappy mortgages to unsuspecting customers out the back door as fast as they came in the front door, begged the taxpayers to bail them out of their financial distress. The BCMCB (Best Congress Money Can Buy) handed $10 billion to Goldman Sachs and $25 billion to J.P. Morgan Chase. The total bailout for the big banks amounted to over $700 billion. Gee, those bankers were in bad shape! The country was about to go under! We had to save them! So the first action of the nine biggest banks in 2008 was to award bonuses of nearly $33 billion, including $1 million each to over 5,000 employees. So the taxpayers got played for suckers again while the CEOs cleaned up. CEO Lloyd C. Blankenfein of Goldman Sachs got $70 million in 2008 for participating in fraud. James Dimon of J.P. Morgan Chase got a paltry $28 million for participating in fraud. Andrew Hall of Citigroup’s Philbro L.L.C. got $98.9 million for committing fraud, and CEO Vikram Pandit a measly $38 million for participating in fraud. If I have this right, there’s only one banker in the world who went to jail for committing fraud. He was some minor bank official in England.
Meanwhile, in 2017, one out of ten mortgage holders in the U.S., or 3.5 million homeowners, is still underwater from all of the mortgage fraud-- that is, their mortgage is still more than the value of their house—after ten years of “recovery.”
How Some of Our New Rich Got Rich
Jeffries writes: “The wealthiest people in our society don’t appear to be improving any lives but their own, and they don’t seem to have special qualities or skills that explain why they’re being compensated so much more extravagantly then the rest of us.” The wealthiest man in the world, Bill Gates, created many computer operating systems that were loaded with flaws—and charged excessive prices for “improvements.” I have been the unfortunate user of Microsoft 98 to Windows 10. Many “improvements” simply added to the chaos. Gates is money-hungry, once trying to get all of his programmers designated as independent contractors so he wouldn’t have to pay them benefits. Computer systems have changed the world, but is Gates himself really worth $98 billion? When is “enough” really enough? He is blessed with no more wisdom than a sanitary engineer, although he thinks he is. He spent billions trying to change high school education programs in the U.S. His “wisdom” resulted in failure. The Gates Foundation has been very successful in reducing the number of malaria cases in the world—but that took the wisdom of scientists and medical people.
One of the main competitors facing Gates for money was Steve Jobs the founder of Apple. If you want to read a fascinating “pathological” biography, read Walter Isaacson’s of Jobs: “Steve Jobs always believed that the rules that applied to ordinary people didn’t apply to him.” He broke all the rules while Gates broke most of them. In summary, Jeffries claims that Bill Gates of Microsoft stole ideas from Steve Jobs of Apple, that Jobs stole ideas from Gates—and that Jobs stole most of his ‘original” ideas from Zerox.
The Stories of Horatio Alger Are Now Mostly Forlorn Myths
Harvard graduate Horatio Alger wrote about 100 volumes about young and impoverished boys who rose from extremely humble backgrounds to lives of comfort and success into the middle class in the 19th Century. Hard work and acts of bravery or honesty laced his stories with optimism. His novels such as “Ragged Dick” featured hardworking youths blessed with honesty, a few noble strangers who assisted them, and the evil, greedy upper-class who tried to keep them down. Perhaps many 20th Century youths did make it out of the slums and the ghettos, adding some credibility to his stories, but it is not happening in the 21st Century. His stories are now myths.
The second richest person in the U.S. is Jeff Bezos of Amazon who is now trying to corner the grocery market. He was raised on a 25,000 acre ranch in Texas with a grandfather who was regional director of the U.S. Atomic Energy Commission. Liliane Bettencourt inherited L’Oreal, one of the world’s largest companies, from her father and is now worth $33 billion. The Koch brothers have exhibited their business skills by inheriting a pipeline and oil refinery business from their father. At last count they are worth about $60 billion. The Walton’s, the richest family in the world, inherited a fortune from their father Sam. Warren Buffett, who has slipped to being the third richest person in the U.S., was the son of a U.S. congressman. Philip Knight of Nike was the son of a newspaper publisher. King Donald was the son of a multimillionaire who apprenticed him with millions. Mark Zuckerberg of Facebook, now worth over $30 billion, came from a wealthy family who managed to get him into Harvard. The descendents of persons named Rockefeller, Rothschild, Carnegie, Mellon, and Morgan have not ended up in breadlines or homeless streets. The days of Horatio are long gone.
Do the rich think they accomplished their wealth on their own efforts? According to research, most of them do. When Barack Obama and Senator Elizabeth Warren agreed “there is nobody in this country who got rich on their own,” many of the rich objected, according to the research conducted by Chrystia Freeland. Let’s see. Did the Walton family get rich using the Interstate Highway system all over the country? Everybody paid for it with taxes.