Essential Report

Blinding Rhetoric

Aug 15, 2012

Think “juicy steak”. Unless you are a vegetarian, your mouth watered or your stomach told you that you were hungry. “Juicy steak” is a phrase that triggers physical and emotional reactions; it will blind you from thinking clearly about anything else…at least for a minute or two. CEOs who run around tossing out phrases like “surging labour costs” and “lower productivity” are using the “juicy steak” strategy—they want to trigger emotional responses that blind people.

So, when you read this report in the Financial Review about a survey of the CEO Forum Group:

International companies have warned the Gillard government that they may scale back investment plans in Australia due to carbon pricing, surging labour costs, the high dollar and political uncertainty.

Leading executives of multinational corporations claim that Australia’s business-friendly reputation is at risk and parent companies could shift resources to Asian nations.

…Membership to the forum is restricted to the country head, chief financial officer and top human resources executive of multinational subsidiaries operating in Australia, including Coca-Cola, KPMG, Credit Suisse, Citibank, Accenture, GM Holden, Colgate-Palmolive, Campbell Arnott’s, BP and GlaxoSmithKline.

Remember this:

1. The heads of these companies make millions of dollars in pay and benefits and not a one—not a single one—has offered to give back a dime of their obscene compensation.

2. “Surging labour costs” is a crock, if you look over the course of several years. The actual official statistics at the Australian Bureau of Statistics shows that over the period 2008-2011, compensation averaged about 4.4 percent—at the same time that housing costs alone rose more than 3 percent and other costs to just live rose as well, eating up any compensation hikes in real terms. Just in the past quarter, price rises for  medical and hospital services increased 2.8%, rents 1.1% , and vegetables +5.2%. Bottom line: people are not living high off the hog.

3. Not to mention, forty percent of Australians are in insecure work.

4. Carbon pricing, as the Prime Minister correctly pointed out recently, has very little to do with higher electricity prices—which are higher for a whole set of reasons pointed out here.

5. A high dollar is a direct result of a resource industry boom that the elites have embraced without question—which could also be managed and controlled with the right policy…which would bring the dollar back down to a more sustainable level.

6. The threat to to shift production to Asian nations is a coded phrase that translates into “we want to go where we can find slave labor”.

The basic point is: there needs to be a countervailing message to destroy rhetorical themes that trickle into daily conversation, trying to convince people that what we need are more policies that give more to the elite and less to workers.


They Slashed Their Own Pay, Too, Didn’t They? NOT!!!

Jun 21, 2012

You know how it goes–a company is in financial trouble, it slashes jobs to save money and, of course, the CEOs take a hit along with the regular workers. Slap, slap, slap–wake up! You’re not in Alice-in-Wonderland world. You’re in the real world, the wondrous “free market” where CEO salaries never go down, no matter how bad they screw up. Which brings us to the saga of the Sydney Morning Herald and The Australian.

The Herald’s management announced it was going to sack–we prefer not using the Orwellian word “redundant”, since it has a way of making the whole thing sound so neutral and mild–1,900 people, for an alleged savings, along with other measures (principally, making people pay for access to the website) of $235 million by 2015. But, not a problem for chief executive Greg Hywood, who is not taking a financial hit and is doing quite well, thank you very much:

Mr McCarthy’s replacement, Greg Hywood, got $1.5 million for his six months in the job last financial year, while he is now eligible for a bonus of 150 per cent of his $1.6 million base salary.

Not to mention the deep pockets of one mining billionaire named Gina who is determined, we think, to wake up one shining day to be greeted with the banner headline “Sydney Mining Herald.”

Not to be outdone in the shameless category, The Australian is going to slash 70 percent of its divisions–but somehow the Rupe found $2 billion to double his takes in Foxtel. But, have we heard of any cuts at all in Rupe’s pay ($33 million USD in 2011) or any of his other top underlings. We find out a little more of the life the Rupe leads, while he’s cutting the pay of others, from this wet-kiss profile of Wendi Deng (Murdoch) in The New York Times:

She used to wash her clothes and face with the same soap, said a 2008 Vogue article, and seldom wore makeup, much less luxuriated in the perks of privilege — like the private yoga classes with her friends Kathy Freston and Arianna Huffington — she indulges in today. At Yale, she would stake out Filene’s Basement to procure designer gowns on the cheap. Today, she is regularly photographed wearing Rodarte and Prada.

Mrs. Murdoch quickly and giddily embraced the trappings of great wealth. While her husband conducted business in various European capitals, she would travel with him and shop for glassware and cutlery and curtains to stock her new homes. In addition to their loft in SoHo, the Murdochs transformed an old hutong in Beijing into a courtyard oasis decorated with art by Chinese artists.

So, there it is: cuts are paid because of “changing conditions” or “new markets” or “new realities” but the story remains the same. The rich rob the workers who create the wealth–and, when things get rocky, the only people taking it in the chin are the very people who had nothing to do with creating the mess.

–Jonathan Tasini


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