| THIS WEEK |
A haunting — and prescient — Vice News headline two years ago read: “How Freight Rail Is Courting Catastrophe.” With three derailments in just two weeks, we’re watching this warning become reality in real time. But we should expect nothing less, as that article cautioned, from a system that prioritizes profits over people.
Railroad workers have been raising concerns for years about the deregulation and corporate cost-cutting that have created the perfect storm for industrial disaster. Railroad Workers United put the matter simply after the fiery derailment in East Palestine, Ohio: “The root causes of this wreck” rest “with hedge fund-initiated operating models.”
The “savings” from these models aren’t raising worker wages or improving rail infrastructure and safety. In fact, over the last three years, CEOs at five top railroad conglomerates have raked in a staggering $200 million in compensation. Seven major U.S. freight railroads spent $191 billion on stock buybacks and shareholder dividends between 2011 and 2021, enriching their already-wealthy execs and investors even more.
This revolving door of money, from profits to stock buybacks to lobbyists and back around again, will only continue to stoke dangerous results unless we start reining in greed. Our nation's railroads — and the Biden administration — must decide whether they want an economy that works for everyone or one beholden to shareholders and rail barons.
Chuck Collins and Rebekah Entralgo,
for the Institute for Policy Studies Inequality.org team |
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| INEQUALITY BY THE NUMBERS |
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| FACES ON THE FRONTLINES |
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| Nationalize the Railroads for Our Public Good |
Earlier this month, a 150-car Norfolk Southern train carrying highly hazardous materials derailed in East Palestine, Ohio. We've seen three freight trains overall derail in recent weeks, two of them carrying hazardous materials, exactly what the rail unions warned about last year when they threatened to strike over dangerous, cost-cutting business practices designed to maximize profits.
“It wasn’t a matter of if this was going to happen. It was a ‘when and where,’” rail employee Ross Grooters, co-chair of Railroad Workers United, noted recently. “There’s a high likelihood that this will happen again, somewhere, if the root causes of the issues aren’t addressed.”
The best way to address the issues facing the nation’s railroads? To those working the railroad, that would be public ownership. Inequality.org managing editor Rebekah Entralgo has more.
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| WORDS OF WISDOM |
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PETULANT PLUTOCRAT
OF THE WEEK |
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| This Big Pharma Profiteer Knows How to Play Nice |
| The petulant don’t have to act petty. Just look at Stéphane Bancel, the chief exec of the Big Pharma newbie Moderna. Bancel became a billionaire at the height of the pandemic selling Covid vaccine that cost his company less than $3 a dose to the federal government at an average $21 a dose. Earlier this year, critics pounded on Bancel after Moderna announced new plans to more than quadruple the price of its Covid vaccine. Bancel, in response, could have snarled away at “government bureaucrats.” Instead, the CEO had Moderna graciously announce last week that the company’s new “patient assistance program” would ensure that underinsured and uninsured people won’t face any Covid vaccine charges. Left unsaid: Moderna will still be charging Medicare and Medicaid for the vaccine, and the company’s new higher price will squeeze the budgets of both programs as well as boost private health insurance premiums. Bancel’s current net worth: $5.7 billion. |
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| BOLD SOLUTIONS |
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| Reform Charity, Restore America’s Generous Spirit |
Have you heard of MrBeast? This 23-year-old YouTube sensation vaulted to fame through elaborate stunt videos — and now he’s turning to charity, publishing viral titles like 1,000 Blind People See For The First Time and We Saved An Orphanage.
Splashy charitable acts on social media speak to a national civic culture that both prizes and relies on philanthropic behavior. Individual Americans rate among the world’s most generous, but our current philanthropy doesn’t reflect that broad-based generosity. Our Digital Age philanthropy, writer Rhodri Davies notes, has become particlarly vulnerable to performativity and reputation laundering. Unaccountable intermediaries and “pledges” plague our dangerously top-heavy philanthropic sector.
Inequality.org’s Bella DeVaan traces America’s generous rep back to Alexis de Tocqueville, one of our nation’s earliest foreign observers. In the end, she argues, Tocqueville’s understanding of generosity can provide no substitute for meaningful public investment. |
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| GREED AT A GLANCE |
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| TOO MUCH |
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| The Lesson We Need to Teach Our Nation’s Rich |
| Nothing says “esteem” more directly than paychecks, and, by that metric, American society has for years been systematically devaluing the work our teachers do. Between 1996 and 2021, average teacher weekly wages adjusted for inflation rose a miniscule $29. Over the same years, inflation-adjusted weekly wages for other college grads rose over 15 times faster, up $445. But the most stunning pay disparities show up when we contrast teacher pay to the compensation of our nation’s most generously rewarded power suits: The top 15 hedge fund managers on Wall Street now make more than America’s 120,000 kindergarten teachers. How could we start fixing that? Inequality.org’s Sam Pizzigati has more. |
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| MUST READS |
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What's on Inequality.org
Phil Mattera, In a Harebrained Response to Labor Shortages, Some Lawmakers Want More Child Labor. Bills in Iowa and Minnesota would allow teens as young as 14 to work in meatpacking, construction, and other dangerous occupations.
Rebekah Entralgo, Biden Is Right: You Shouldn’t Pay a Higher Tax Rate Than Billionaires. The president has renewed his call for a “billionaire minimum tax.” If Congress won’t listen, states should.
Elsewhere on the Web
Chuck Collins, It’s Time We Make Billionaires Pay Their Fair Share, The Progressive. Dismantling the IRS, whether by cutting its funding or abolishing it outright, would continue the process that’s essentially making taxes voluntary for the ultra-rich.
The 100 Most Overpaid CEOs 2023, As You Sow. The average pay for the 100 most overpaid now sits at $38,192,249, up 30.6 percent from last year.
Krysten Crawford, How pandemic savings are ‘trickling up’ to the super-rich, Stanford Institute for Economic Policy Research. Policymakers are relying on calculations that ignore the U.S. economy’s trickling-up dynamic.
Kristin Schwab, Why ‘eat the rich’ storylines are taking over TV and movies, Marketplace. Hollywood’s depictions of the wealthy have changed. Recent standouts have taken on “eat the rich” themes with dark humor and cynicism.
Lottie Limb, Activists block private jet terminals around the world to protest ‘super rich mega polluters,’ EuroNews. From London to Stockholm, climate scientists have been blocking private jet terminals to protest luxury emissions.
Dana George, You Won't Believe What This Bank CEO Earns After a 30% Pay Cut, Motley Fool. Inside our raging greedflation.
Joe Hughes, Higher Stock Buyback Tax Would Raise Billions by Tightening Loophole for the Wealthy, Institute on Taxation and Economic Policy. Since 2018, S&P 500 corporations have spent more on buying back their own stock — a move that enriches top execs — than on improving their business operations.
Ross Pomeroy, The highest earning men aren’t especially intelligent. What explains their success? BigThink. A new Swedish study finds that our highest-earning men actually run less intelligent than those employees right below them.
Amanda Albright and Brody Ford, Tech CEO Salary Cuts Aren’t Always the Sacrifice They Seem, Bloomberg. For most execs in the industry, salary makes up only a small portion of their total compensation.
Faris Mokhtar and Low De Wei, Singapore increases property tax after wealth influx, Bloomberg. Some 249,800 Singapore residents now hold net worths of at least $1 million, making the city the fifth-wealthiest city on Earth. Properties worth $3 million will see a 50 percent tax-rate boost. |
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| A FINAL FIGURE |
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| BE THE 1% (NO, NOT THAT 1%) |
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Our goal for 2023: that 1% of our Inequality.org subscribers become monthly sustainers and help grow our newsletter and research efforts. Be the 1%, for as little as $3 a month! |
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