The Hightower Report

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Bill's Booming Economy

In his speech to the Democratic National Convention, Bill Clinton looked back over his eight years in the White House and pronounced them good: "America gave me the chance to live my dreams," he said. "I have tried to give you a better chance to live yours."

Nice rhetoric, but despite the self-congratulatory hoopla about Bill's Booming Economy, eight out of 10 Americans have seen their incomes shrink or barely keep up with inflation during Clinton's tenure, even though they're working harder and longer than ever before. While they bask in Wall Street's rocket ride to riches, Bill's apologists tell this workaday majority to stop their complaining.

They point to great success stories, like that of Richard Thoman of Xerox Corporation. Well, actually, Thoman's is a tale of failure. But, hey, in the New Economy, failure's just another way of getting rich! In 1997, this fellow left IBM to join Xerox, becoming CEO of the photocopier giant in 1999. Instead of a rocket ride, though, he steered Xerox on a rocky ride, mishandling a staff reorganization and presiding over a 66% plummet in the company's stock price. After only a year, he "resigned under pressure," which is to say, "You're fired."

Don't weep for Richard Thoman, though, for he lives in Bill's world, where down is up! In a separation deal that you and I could only dream of, Xerox agreed to pay him $800,000 a year for the rest of his life. When he dies, his wife will get the $800,000 yearly check for as long as she lives. Plus, Xerox paid him a $375,000 bonus for his year of failure at the corporate helm. He also retains more than two million shares of Xerox stock, which he can cash in for massive profits as the company recovers from the mess he left behind.

That's the way it is in the Land of Oz, where the dreams of select people like Richard Thoman really do come true.

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Spinning Michael Milken

Remember Michael Milken, the former junk bond king and Wall Street finagler who spent a couple of years in federal prison and paid $600 million in fines for securities fraud, mail fraud, and conspiracy? Please don't call Mike the "former junk bond king" anymore.

Apparently it irritates him, so he had his PR.staff send out a memo to editors entitled "Who Michael Milken is ... and is not." Published by Harper's magazine, the memo instructs the media on how to properly identify Milken. For example, the memo notes that, since leaving prison, Mike has been heading his own economic think tank (which presumably thinks about ways to rake in millions without going to prison) and heading a family foundation he established with about half a billion ill-gotten bucks he squirreled away in the names of his wife and children. So, say his spinmeisters, "one accurate way to describe Milken is as a philanthropist." The memo takes this absurdity a step further by suggesting that: "In a general article, financier and philanthropist is probably the most common short description." Of course, common bank robbers are "financiers and philanthropists" too, but they don't have PR firms.

Mostly, though, Mike's memo seeks to stop journalists from using "former junk bond king" to describe the former junk bond king. The PR people petulantly sniff that "Those who mindlessly regurgitate 'junk bond king' have no understanding of Milken's work or its complex theoretical underpinning."

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Labor Crunch

Despite all the talk of a boom, our economy is losing millions of jobs. In just the last three months, for example, International Paper and Woolworth said they would punt 9,000 workers each, Stanley Tools and Fruit of the Loom cut 5,000 each, and Whirlpool just axed 4,700.

As usual, Wall Street investment houses were ecstatic about these mass firings, pumping up the stock prices of the companies -- which just happens to put big bucks in the pockets of the executives doing the firing. The day after Whirlpool announced that it was offing 10% of its workers, for example, investors cheered by giving Whirlpool stocks a 14% boost.

What we have here is a redistribution of wealth from America's working families to super-rich investors. It's done in the name of "productivity," "efficiency," and "competitiveness," but it's really nothing but stealing from the many to profit the few.

In their candid moments, economists are beginning to concede that knocking down the middle class is thievery -- and stupid. Stephen Roach, chief economist for Morgan Stanley, now says that what corporate downswings have produced are not real economic advances, but only what he calls a "labor crunch recovery," which amounts not to increased productivity, but profiteering on the backs of the corporate workforce. You'll know the economy is doing well when you are.