Mass lay-offs vs. massive CEO pay
JANUARY 30, 2023
In Deeply Unequal Societies, the Thieving Always Thrive
Photograph Source: Dante Carrer, https://www.reuters.com/world/us/sam-bankman-fried-reverse-decision-contesting-extradition-source-2022-12-17/ – Fair Use
What makes for a thieving culture? An overabundance of pickpockets? Tsunamis of burglary and shoplifting?
Most definitely not. To truly gauge a society’s larcenous leanings, many of us would posit, we need to look beyond the nimble-fingered and focus more on the smooth-talkers, the power-suited flimflammers who thrive in any society where significant numbers of people feel a driving need to get rich quick.
The most recent example? Federal prosecutors last month charged the crypto currency CEO phenom Sam Bankman-Fried with committing “one of the biggest financial frauds in American history.” The 30-year-old billionaire, the Securities and Exchange Commission charges in a separate filing, built an immense financial empire on a “house of cards.”
The executive now trying to pick up those cards — the new CEO of Bankman-Fried’s FTX cryptocurrency exchange — says his predecessor simply engaged in “old-fashioned embezzlement,” not even stopping to bother with the “highly sophisticated” thieving of Enron’s fabled executive crooks a generation ago.
Right before Bankman-Fried’s brief appearance on America’s economic stage, the nation’s face of fraud belonged to Elizabeth Holmes, the founding CEO of the health-tech company Theranos.
Holmes raised some $900 million from a “star-studded” list of investors who ranged from media mogul Rupert Murdock to Henry Kissinger. Early in 2021, a federal jury convicted her of various frauds in what the Washington Post called “the most high-profile test of whether Silicon Valley’s “fake it until you make it” ethos could withstand legal scrutiny.”
The hustles of our Bankman-Frieds and Elizabeth Holmeses can certainly make for entertaining reading. But Freya Berry, a veteran corporate fraud investigator, seestheir scams “as not as unusual as you might think” — and not as entertaining either. With “rewards high” and “penalties higher,” she notes, corporate miscreants “go to great pains to conceal” their nefarious ways, even “making death threats to whistleblowers.”
We need these whistleblowers. We also need to understand that our thieving culture rests on more than the outright larceny of our indicted corporate crooks. Our most accomplished corporate thieves, in fact, never fear indictment. They steal in broad daylight. They regularly steal livelihoods — from the thousands upon thousands of men and women who’ve worked ever so diligently, sometimes for many years, to make them fabulously rich.
We’re now living through an intense stretch of this theft. Tech’s top execs are now laying off workers at a fearsome rate. Earlier this month, Microsoft announced plans to pink-slip some 10,000 workers. Amazon is cutting 18,000, Google parent Alphabet 12,000, IBM nearly 4,000. Overall, estimates Forbes, tech firms have so far this month alone given the heave-ho to 56,000 employees.
What makes these layoffs “thefts”? Simple avarice. Investors on Wall Street “expected more growth,” explains Grid economics analyst Matthew Zeitlin, than Big Tech companies “are currently showing.” That has Big Tech share prices sinking, “and any time share prices fall, investors and executives get antsy — and workers often pay the price.”
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