Whole Foods CEO John Mackey and “Conscious Capitalism” – putting lipstick on a pig

John Mackey is the co-CEO of Whole Foods Market, its founder, and a self-proclaimed independent libertarian. Mackey has also recently authored a book, “Conscious Capitalism.” While he speaks in platitudes about corporations acting as conscientious citizens of the world, Mackey’s actions as CEO of a major corporation betray his real motivation.

Mackey was forced to back pedal from his comments on the Patient Affordable Care Act (“Obamacare”):

Technically speaking, it’s more like fascism. Socialism is where the government owns the means of production. In fascism, the government doesn’t own the means of production, but they do control it — and that’s what’s happening with our health care programs and these reforms.

Mackey is dead wrong on the government-corporate relationship under fascism. Italian historian and fascism authority Emilio Gentile gives the authoritative description:

Corporative organization of the economy that suppresses trade union liberty, broadens the sphere of state intervention, and seeks to achieve, by principles of technocracy and solidarity, the collaboration of the ‘productive sectors’ under control of the regime, to achieve its goals of power, yet preserving private property and class divisions. (Payne, Stanley G (A History of Fascism, 1914-1945). University of Wisconsin Press. pp. 5–6)

More importantly, it is time to call Mackey’s vision of capitalism (and Whole Foods Market) what it is, and this writer does not use this term loosely. “Corporate fascism” is an accurate and apt description of the Mackey philosophy. Consider Gentile’s definition. above, in light of Mackey’s actions and writings.

Mackey is a staunch proponent of a corporate-centric economy, with no government or regulatory intervention. Both Whole Foods Market and Mackey are anti-union, anti-worker’s rights. The Mackey philosophy would see a collaborative corporate control over the means of production, to achieve its own goals of power through corporate solidarity (WMC, US Chamber of Commerce, etc.). Preservation of private property and class division are a necessity for the Mackey vision, as there can be no cheap labor production without class division. Ironically, Mackey is a proponent of the expansion of state intervention, as long as it is on behalf of corporate welfare expansion. There is plenty of proof to support this assertion…

On November 16, 2011, Mackey penned an op-ed by invitation in the Wall Street Journal, titled “To Increase Jobs, Increase Economic Freedom.”  In a response to Mackey’s article written on February 1, 2012, Badger Democracy addressed the fundamental arguments in the op-ed:

1. Cut the size and cost of government – 100 years ago, government spending was 8% of GDP; today it is 40% of GDP. This additional money spent by the government could be used to “create jobs.”

2. Cuts should be made in Social Security, Medicare, Medicaid, and Defense – many of these services could be privatized, using the “success” of Chile and Singapore as models.

3. Stimulate the economy by cutting taxes and regulations – Mackey explains that cutting taxes would “increase revenue… as entrepreneurs create new businesses and new jobs and as people earn more money.”

In his own op-ed, Mackey supports further provisions which would continue the US economy down a dangerous path. Greater corporate consolidation of power, greater consolidation of wealth, greater class inequity, and greater corporate influence on policy which would regulate said power.

The dagger in Mackey’s theory is a recent report in the conservative-leaning Financial Times, also reported in the New York Times. The article cites a steady decline in earned wages and a steady rise in investor income through profit and interest:

“58%…is the share of US national income that goes to workers as wages rather than to investors as profits and interest. It has fallen to its lowest level since records began after the second world war and is part of the reason why incomes at the top – which tend to be earned from capital – have risen so much. If wages were at their postwar average share of 63 per cent, workers would earn an extra $740 billion this year, about $5,000 per worker, according to FT calculations.”

More power and wealth for the corporate fascists, with less taxes and accountability means more money to influence and drive politics and policy:

 

Corporate Taxes Paid by US Corporations, 1950-2010

(Federal Reserve Bank of St. Louis analysis)

Corporate income tax graph

 

Cheap labor production is possible due to the expansion of the wealth gap and class disparities:

 

 

John Mackey’s Whole Foods Market has also forced employees to “vote” to cut their own wages and benefits. Wages have been cut due to reduction in hours, and employees will be forced to contribute more in spite of enormous corporate growth:

In 2007, WFM profits (after taxes and expenses) totaled $182.7 million. Four years later, in 2011, profits totaled $342.6 million – nearly double in 4 years.  For the first sixteen weeks of 2011, total profits were $88.7 million; for the same period in 2012, profits totaled $118.3 million. Store expenses have decreased by 38 points in 2011, including 28 points due to wage cuts. In real numbers, most stores have executed 3% cuts in labor over the past fiscal year, resulting in most employees seeing a 5-8% cut in wages (due to hours being cut).

Of course, Mackey built Whole Foods with his own two hands, with no government help (sarcasm)…therefore, government should stay out of his business. This is the great lie of corporate fascism. Mackey and his ilk want the government to work for them. The doctrine of so-called “corporate conscious” follows in the words of Gentile:

…broadens the sphere of state intervention, and seeks to achieve, by principles of technocracy and solidarity, the collaboration of the ‘productive sectors’ under control of the regime, to achieve its goals of power.

The corporate fascists would have us believe the great lie of their own self-determination and success, that personal strength and sacrifice alone built their empires. Mackey is as guilty of this as any of them. Whole Foods is a prolific recipient of government intervention and welfare on its own behalf.

In 2011, an $8 million tax break for a new Washington DC Whole Foods development raised questions of return on public investment and why public money was even needed:

And why does this project require a special subsidy to move forward in the first place?  This Whole Foods already would qualify for a set of tax incentives for grocery store development, including a 10–year property tax break on the store itself.  Moreover, while some projects near Nationals Park have languished in the recession, this area is likely to be part of the emerging rebound, thanks in part to prior public investment by the District.  Finally, if a Whole Foods will revitalize this neighborhood as it did in Logan Circle, why won’t private market interests step up to make it happen?

In the same year, Whole Foods received $4.2 million in tax subsidies to open a Detroit area store, uncovered only by FOIA requests:

The documents, obtained by the Chaldean News under the Freedom of Information Act and provided toCrain’s, show that Whole Foods is asking for $4.2 million in city, state and federal incentives to open a store in downtown Detroit.

According to the exchanges, the 21,000-square-foot project is expected to get $1.5 million in local and community foundation funds, $1.2 million in federal tax credits under the New Market program and $1.5 million in state incentives.

Michael Sarafa, president of the Bank of Michigan and co-publisher of The Chaldean News, questions the use of incentives to lure a national grocery chain to Detroit. He said there are 83 independently-owned grocers in the city, many of them owned by Chaldeans, who did not receive incentives.

 

Controversial “TIF” funds are being used for construction of a Whole Foods-anchored development in St. Louis, hardly in a blighted area.

The new Whole Foods development in the Hyde Park neighborhood of Chicago is being partially funded by an $11.3 million “TIF” in an already well-developed area.

Mackey is now on the record confirming that Whole Foods will begin eliminating full-time employees as a result of “Obamacare” being fully enacted. This in an interview with Greta Van Susteren:

…there will be a strong temptation for businesses to keep people under 30 hours, so they don’t have to provide health care. And you will have a lot of part-time workers and fewer full-time workers, a lot of people underemployed.

Whole Foods prided itself, we’ve always had a higher mix of full-time to part-time workers like 80 percent full-time and 20 percent part-time, which is very rare in retail. But as I suspect as our health care costs are driven up by health care reforms then we’ll end up gradually lower our full-time ratio to a much lower number.

There is no fiscal truth to this statement. As proven in Whole Foods’ own financial statements and a previous Badger Democracy blog, the company’s health care costs per employee are actually lower than they were before “Obamacare’s” passage. The reason for Whole Foods’ higher total costs is simple – the company is growing. With government and public help.

It is time to take the lipstick off the pig. The philosophy of John Mackey should be called what it is. Corporate freedom, rights, and independence over all – even the individual. No worker’s rights, no government regulation or intervention EXCEPT on behalf of the corporation and its own interests. In short…corporate fascism.

And Mackey calling “Obamacare” fascism? Pure projection.

 

Free Trade, low unemployment, worker’s rights, and a recovering economy…G’day from Australia

Australian economist Tim Harcourt is known as “The Airport Economist”, and is the J.W. Nevile Fellow in Economics at the Australian School of Business at The University of New South Wales. Harcourt is a world-renowned labor economist who spearheaded Free-trade compacts in Australia over the past decade. Badger Democracy interviewed Harcourt for the “Wisconsin Insurgent Radio Network” on Tuesday, July 17. His philosophy and the success of Australia present a challenge to the US – implement free-trade agreements that help and support the working middle class. The full interview can be heard on “The Wisconsin Insurgent Radio Network.” Highlights follow.

From a 2006 interview with ABC Adelaide, Harcourt states one of the principle responsibilities of capitalism:

“The most important thing is that we make sure that capitalism globally and nationally (Australia) delivers to the people…if you do the right thing socially as well as economically you can basically improve the lot of workers and their families.”

According to an Economic Policy Institute 2005 study, Wisconsin lost 25,403 jobs (1% of total jobs) in the first year of NAFTA being implemented. Australian exports are 16% of GDP, while US exports are 8% (WTO data). In addition, while US unemployment is stuck around 8-9%, Australia’s is 5% (Tim Harcourt interview).

“When we (Australia) opened up the economy, we’ve got to have a strong accord with the labor market. We’ve got to have universal health care, education, and labor market programs to ensure that workers are cushioned from the changes of the global market.

In Australia, we have very low unemployment relative to the US. We’ve got a global-trade engaged economy; and the export firms who took us into the global economy are the unionized firms…who pay on average about 16% higher wages than the rest of the economy.

“When you have people opening up an economy, but at the same time undermining collective bargaining and social protection, then that’s where you have a problem with globalization.”

 Harcourt gives perspective and demonstration of how economies can successfully be engaged on a global basis without destroying labor or the middle class; growing the full economy. A must-listen and share interview.

Tim Harcourt can be found at his website, The Airport Economist.

 

Help support independent, progressive research and journalism…Solidarity! 

 


			

Scott Walker has Failed Wisconsin…part 3 – The Labor Day Edition

In an interview on WISC Channel 3 (Madison) from a Wausau event, Scott Walker stated that he and his other GOP colleagues have always “supported labor,” and have recognized that Labor Unions are part of the “economic engine” so necessary to a recovery. Either Scott Walker is delusional, or suffers from Anti-Social Personality Disorder. The aftermath of Walker’s policies are one of his biggest failures of his administration. Scott Walker has failed Wisconsin workers and labor.

Scott Walker’s first act as Governor was to sign into law a huge tax break to the wealthiest 2% of wage earners and largest Corporations in Wisconsin. The cost to Wisconsin taxpayers – over $100 million, at a time when Walker claimed falsely that “Wisconsin is broke.”  The classic “trickle-down” rationale was used that Corporate wealthy needed those tax breaks to create “good paying jobs” to get the economy going, and “Open Wisconsin for Business.”

Walker’s entire message was an unmitigated deception. Wisconsin was not broke – Walker’s own policies have expanded the state’s deficit, for now and the future. The worst deception is promoting tax breaks rewarding his political allies, and the lie that they will help Wisconsin’s working middle class. The simple truth is, that tax cuts have never, and will never create jobs – well documented fact. Over the last two decades, in fact, top-tier tax rates have dropped to the lowest they have been pre-Great Depression. The result is an increasing gap in wage equality – as great as pre-Great Depression levels, and putting the US in such International company as Uganda and El Salvador in income inequality.

The result of Walker’s “job creating” agenda has been clear. Wisconsin’s unemployment rate and numbers are growing faster than the national average. In fact, Scott Walker’s policies have halted a jobs recovery in Wisconsin, which began slowly in mid 2010.

(Graph source:US Department of Labor, Bureau of Labor Statistics)

Scott Walker’s job policies are failing. They are allowing Corporations in Wisconsin to achieve record profits, benefitting a select few (who happen to be his largest supporters), while being detrimental to the majority of Wisconsinites. It is a fact that strong collective bargaining agreements are crucial to wage equality and economic growth, yet Scott Walker has taken teachers and public employees away from the table. As Walker’s policies continue to take effect, Wisconsin will continue to lose family supporting jobs. He has never, and will never, stand with labor. Walker stands with the wealthy and Corporations – they will benefit from his policies, not Wisconsin workers.

Scott Walker has failed Wisconsin working middle class and families, and he deserves to be recalled.

We shall overcome! Happy Labor Day from Badger Democracy…remember what the unions have done for all of us this weekend.

“Unions, Collective Bargaining HELP the Economy, Wages, Equality” – Harvard Study

 Our state and nation’s economic condition of a chronically recessive economy has allowed the Tea Party and neo-conservative elements to create a “debt crisis” as a means to push economic policies which will further stagnate the economy. One of the central issues to our state economy is the decrease in real wages over the past decade. Consumers (in an economy of consumption) have less disposable income based on real wages than a decade ago. Subsequently, there has been a huge increase in the wealth gap – with fewer people controlling more of the wealth, shrinking the middle class economy:

 

study conducted by Harvard University and The University of Washington, published in the American Sociological Review  this month proves why Collective Bargaining rights should be of great concern to anyone interested in preserving a middle class in Wisconsin and America. The study, “ ” Unions, Norms and the Rise in U.S. Wage Inequality,” found that the decline in union power and density since 1973 explained a third of the increase in wage inequality among men since then, and a fifth of the increased inequality among women.”  In addressing educational inequality, the study found “The decline of the U.S. labor movement has added as much to men’s wage inequality as has the relative increase in pay for college graduates.” The study adds that “union decline contributes just half as much as education to the overall rise in women’s wage inequality.”  The study found effects in non-union wages as well, stating  “the decline of organized labor held down wages in union and non-union workplaces alike. Many non union employers — especially decades ago, when unions represented more than 30 percent of the private sector work force — raised wages to help avert the threat of union organizing.” Perhaps most notably, the study addressed rising inequality in the economy, and the workplace:

“In the early 1970s, when one in three male workers were organized, unions were often prominent voices for equity, not just for their members, but for all workers,” the two professors wrote. “Union decline marks an erosion of the moral economy and its underlying distributional norms. Wage inequality in the non union sector increased as a result.”

The two professors note that the decline of unions is part of a common account of rising inequality that is often contrasted with a market explanation that includes technological change, immigration and foreign trade. They argue that the market explanation usually understates the role of organized labor’s decline on increased inequality.”

This decrease in real wages and increasing wealth gap has crippled the middle class in America, and consumers’ ability to sustain any economic recovery. What many Progressives and Labor leaders have been saying for decades has been proven with the release of this study. Contrary to the Corporatic propaganda, there are economic and social benefits to strong unions – a message they want to suppress and distort. The battle in Wisconsin is for the existence of a middle class and a political check to Corporate Anarchy threatening the existence of a Democratic process. This information is another weapon at our disposal to combat right-wing lies and rhetoric.

…And Get Out The Vote for Holperin and Wirch!!!

Wisconsin Worker’s Struggle, Global Solidarity, and Resistance

Early in the Wisconsin Movement against the corporate coup d’etat, it was apparent state labor and progressives were in solidarity with a worldwide resistance. Scott Walker has adopted the policies pushed by the new age of “Robber Barons” – plundering state resources for unfettered profits, leaving a trail of human devastation  in their wake. It is a worldwide movement, facing a global economic system committed to “disaster capitalism.” State and world leaders are using a “financial crisis” as cover to implement their self-serving policies. The recent appointment of Christine LaGarde as Chair of the powerful International Monetary Fund (IMF) will have lasting repercussions in Wisconsin and the world. A worldwide resistance to this power will be required to save the working middle class.

 Christine LaGarde will not be the agent of change and reform, as the mainstream financial press would have the world believe. She has positioned herself as a financial world “feminist,” using that image to present a facade of integrity and independent thinking. The reality is LaGarde will continue the decades-old IMF practice of holding world economies hostage for critically needed aid money. In exchange for financial bail-out funds in the billions of dollars, countries like Greece, Spain, and Portugal will agree to implement  “shock doctrine” financial reforms. Reforms that privatize services, destroy unions, deregulate financial systems, and create record profits for multinational corporations; all while destroying the working middle class. The financial “crisis” being cited as necessity for this action has been created by the very entities who have consolidated profit and power under those policies. A speech given by Mme LaGarde in 2008, at the Executive’s Club of Chicago, clearly defines her economic philosophy. A philosophy that saw its beginning in Chicago, and will require united resistance by all the workers of the world. A philosophy that supports and encourages actions similar to Scott Walker in Wisconsin to be implemented on a global level, requiring people of the world to unite against a common foe – global corporatism.

On May 23, 2008, La Garde (then Minister of Economic Affairs in France) gave a speech at a special luncheon for the Executive’s Club of Chicago.  LaGarde has a history in Chicago. In 1981, she joined the multi-national powerhouse lawfirm Baker and McKenzie. She made partner in under six years, and was named the firm’s Chair in 1999. While in Chicago, she was highly influenced by the economic philosopies of Milton Friedman, a self-proclaimed Disaster Capitalist, and the Chicago School of Economics. A spokesperson for the School confirmed for Badger Democracy that while Mme LaGarde did not attend formal classes at the University, she is listed as a “highly important person in the world of economics,” and has had “frequent contact” with the School and faculty. Milton Friedman and The Chicago School are cited as the origin of the “Shock Doctrine” (if you are not familiar with this doctrine, explore the link to Naomi Klein’s website) of economics. This Doctrine has created record corporate profits in developing nations, while devastating the middle working class wherever it is implemented. Early in her speech, Mme LaGarde states:

 “…France is on the move …I won’t go through each of our fifty-five reforms, contained in thirty-seven laws passed by Parliament in the last year. Together, they represent a kind of “shock therapy,” if I may borrow an expression from one of the most famous Chicagoans, Milton Friedman.

There are (1) reforms that we as a Government are implementing, (2) economic reforms that I am conducting more personally as Minister for Economy, Employment and Industry, and (3) international regulation reforms that your country can help us realize.

The shock therapy will make all the clichés about our country belong to history.”

La Garde goes on to outline reforms France has undertaken that will sound all too familiar to Wisconsinites. Wage and taxation laws benefitting corporations, pension and benefit reforms, privatization, weakening public unions, and opening France for international corporate investment. In a latter portion of the speech, she uses words we are accustomed to hearing from Governor Walker:

“France is open for business”

It is no wonder that workers in France have rioted in protest of these “reforms.”  Wisconsin and the world should take notice at how these reforms have worked in France since implemented in 2008. According to the CIA factbook  (note: the CIA link may not open the first time – click “refresh” while on the error message page, and it will open) on the French Economy, the reforms have generated large increases in private corporate profits. The cost to the working people of France, however, is much more bleak:

From 2008-2010, Unemployment jumped from 7.4% to 9.5%

Government Budget Deficit grew from 3.4% GDP to 7.8% GDP

GDP was down 2.5% in 2009, recovered only 1.5% in 2010

Public Debt increased from 68% of GDP to 84% of GDP

Air France, France Telecom, Renault, and Thales have been privatized – formerly large sources of revenue for the state.

All the while, the recovery is being financed on the backs of the workers in France. The same programs are being implemented all over the world, financed in many cases by the IMF. Financing big money bailouts to the entities that created the “crisis” in the first place – at the expense of the ever-shrinking middle class. The IMF will withhold funds from these countries until “shock doctrine” style reforms are passed – giving the IMF the power to exercise its goal of  (direct quote from second to last paragraph in the following link) “Global Economic Governance.”  

The world is waking up to these ideologies so destructive to the working middle class. While news coverage in Wisconsin and the mainstream media are lacking, the people of the world are fighting for their rights. Wisconsin is not alone in this struggle. It has become a worldwide struggle whose outcome will define the world direction for our children’s children. The disaster capitalists and corporate anarchists are attempting a takeover of the world economy, at the expense of the human condition. As progressives have always done, we must stand with the people of the world and resist the philosophies of the Christine LaGardes and Scott Walkers of the world – who would see the world as an unfettered breeding ground for corporate profits.

Stand up, and continue to stand strong Wisconsin – ours is a global struggle, which will define the world we live in – and leave for the future. Vive la Resistance!