Buffet, Burger King and Floyd Mayweather

By Richard Mellor

Afscme Local 444, retired

We all know of Burger King. It’s one of those fast food joints that people who can afford it don’t eat at. However, millions of poor and low waged people do, and Burger King pays very low wages.

A cashier at this place would earn $8.27 an hour. A Crew Member earns $8.11 and hour. A Team Member earns $8.18 an hour although what the difference is between a crew and a team this writer does not know. Then we get to the higher ups. A shift manager, a very important position as you get your ass reamed if things don’t work our right, earns $9.87 an hour. Burgerking.com

Now Burger King has had a few owners. These owners are called holding companies or sometimes, capital management companies.  As of today, Burger King is owned by Restaurant Brands International which is a joint US Canadian Company formed by the merger of the old Burger King and the Canadian food chain Tim Hortons.  The pervious majority owner of Burger King was 3G capital and 3G capital is now a majority owner of, yes you guessed it, Restaurant Brands International. 3G Capital is a Brazilian investment management firm co-founded founded by Alex Behring who is also a managing partner. He is also chairman of Restaurant Brands International, a director of Anheuser-Busch InBev, and chairman of Kraft Heinz Company.

I was joking of course, how could we guess any of this?

Restaurant Brands International--------Burger King plus Tim Hortons--------has its headquarters in Canada because it saves a lot of money taxes wise. The corporate Tax rate in the US is 39.1% compared to 26% in Canada.

Two of the largest shareholders in Restaurant Brands International are Bill Ackman and Warren Buffet.  Warren Buffet of course is well known and is worth $61.2 billion according to Forbes. Bill Ackman is poor by comparison and is worth a paltry $2.6bn. Ackman, bless his little heart, is founder of Pershing Square Capital Management.

Phew, it appears borders are not a problem when it comes to capital flow.

So, having settled who owns Burger King, we did settle it didn’t we?  I noticed that the company pulled a sneaky one on its competitors.  We all know how expensive TV ads are during major sporting events, millions of dollars for 30 seconds.  But Burger King got round advertising fees. Bloomberg Business Week points out in this weeks edition that Burger King, or Restaurant Brands International, or 3G Capital paid (help!) likely paid Floyd Mayweather $1,000,000, that’s one million dollars, to have the Burger King logo behind him as he walked out in the MGM Arena for his fight with Manny Pacquiao.

And this is not the first time the geniuses at Burger King have paid for a stunt like that avoiding multi-million dollar advertising slots.  At the Belmont Stakes, a month or so later BW reports, the Burger King mascot “popped up….in the private box of trainer Bob Baffert.”  Racing fans will know that Baffert is the trainer of Triple Crown winner American Pharoah.  Not as many watched that event so I guess B King figured they could get an even better deal than. Baffert was paid $200,000 which he gave to charity apparently.

Shoukat Dhanani is very happy about this because he is the head of Houston Foods that owns approximately 460 Burger King restaurants. He just loves to feed people. That’s increased somewhat over the past year as his Houston Foods bought 260 Burger King’s off of Blackstone Group. Blackstone is the famous private equity group that was co-founded by Stephen A. Schwarzman who is worth about $13 billion He earned (well he made)  over $600 million last year.  He founded Blackstone with Pete Petersen, a former US government  Secretary of Commerce. All these guys are described as “self made” by Forbes.

So now we have figured out who owns Burger King I think its important to consider that this is a very important industry, it is the food industry. Food is very important to human beings and the men, they’re almost always men, here are very concerned about our health and put a lot of time in to providing society with a quick healthy food supply.

But honestly, I am a socialist. I do not believe the dominant industries in a society should be owned by individuals or a group of individuals. I do not believe the market, their precious market, can provide proper food, housing, education, transportation, health care, productive work, or a safe and healthy natural environment in other words, basic social needs, for the vast majority of the people in the US and the world. What we describe here is savagery. It is not civilization.  We have to stop it. 

We do not have the right to do anything we want in any civilized society. I believe we have to deny the people I describe here, and their class colleagues, of the right to do what they are doing, owning and controlling the very lifeblood of society for personal gain. Their food is rotten anyway, go eat at a mom and pop and see how much better the food is. They have a right to a healthy and productive life interacting with nature to provide what humanity needs. A prerequisite for them earning their billions is paying human beings less than $10 an hour. Here in California, $20 an hour is close to poverty wages. Their existence as social parasites, accumulating obscene wealth at the expense of humanity and nature is a right I am not ashamed to say I want to deny them.

So if you’re in Burger King and have a problem with your burger they’ve set it up so  you’ll have to talk to the shift manager, you know, the guy that get’s paid $9.87 an hour for his efforts. So give him or her a break.

Union leader Trumka on Wisconsin. Why the possibility of an all out victory in Wisconsin frightens the union leaders.

Tens of thousands of workers oppose employers offensive in Wisconsin. Greatest movement of US workers on union issues since 1930's.

Explain the big picture. Our movement is under attack from the employers' offensive. We must make no concessions. The alternative? The employers and their class make the concessions. And we go on to the offensive.

This blog has been arguing that the working people of this country and especially the workers involved in the struggle in Wisconsin and similar struggles throughout the country have to conduct the struggle taking into account and explaining the big picture. The majority of the union leaders have been conducting the struggle on the narrow issue of the right to collective bargaining. Basically they say that if the public sector workers are allowed to collective bargain they will give up even more concessions than they already have. This is an approach which weakens the struggle and if continued with will lead the struggle to defeat. To strengthen the struggle and to lead it to victory we need to look at things in their totality, as we say we have to see and explain the big picture.

Since Reagan fired the air traffic controllers and the union leaders allowed him get away with this the employers have been on an offensive against the working class. Wages, benefits, conditions, rights, rates of work, have all been under attack. The most recent front on this assault, this offensive war against the working class is against the public sector workers. This is what we are seeing in Wisconsin and round the country, the most recent phase of the capitalist offensive against the working class.

How do we approach this situation. There is one way not to approach and that is to say to the employers if you allow us to negotiate we will make even more concessions than we have already made. In other words we will cooperate even more with your offensive against us. This preserve the jobs and role of the union leaders in their capacity as negotiators but it is a recipe for defeat. I see that Richard Trumka head of the AFL-CIO has an article in the Wall Street Journal today. He correctly points out that corporate profits have reached an annualized level of $1.7 trillion. This is the highest since statistics were kept 60 years ago. And we are supposed to believe that the only way to deal with the deficits is by attacking public sector workers. Trumka also pointed out that Wall Street bonuses averaged $128,000 in 2010 which was more than six times the average pension of a retired public sector worker in Wisconsin. Mr. Trumka could have gone on to state many more realities which show that the situation is not what the employers and their mouth pieces make out in their propaganda.

The amount of tax paid by the rich has gone down dramatically as a percentage of total tax revenue. See the graph in yesterday's post on this blog. We also explain there the cost of the wars in the Middle East which are being fought in the interest of the owners of the oil and gas companies. No matter what way you look at it the rich and the corporations have been making more profits and paying less taxes over the past years. This is the reason for the deficits and also this is part of the offensive of capitalism against the working class. This is the big picture. The struggle in Wisconsin and the struggles elsewhere must be fought by explaining this big picture. Make the rich and the corporations pay, they must make the concessions. This approach will allow these struggles to mobilize the overwhelming majority of people in the country who have been left out of the profits bonanza generated by the growth of the past years.

Richard Trumka made a few half points but he did not state any opposition to his and his organization's continued policy of the workers making more concessions if only the union leaders are allowed to participate in the negotiations on these concessions. We have to be frank here. It is insane to conduct a major campaign to demand the right to negotiate if the idea is, and this is the idea of the union leaders, when we do negotiate we make concessions. It is hard to think what could be more demoralizing to the movement if this is to take place. Just give us our right to sit at the table and we will give you what you want.

Richard Trumka and the trade union leaders tend to see themselves as brokers between the employers and the working class. Their whole emphasis in this struggle is to make a deal and as the employers are not prepared to make a deal where they make concessions then the trade union leaders see the ending of the struggle to be the workers and unions making concession. Again to be frank. This is a disgrace. The union leaders cannot see themselves as operating in any way as outside the existing capitalist system. They cannot see the working class building an alternative to capitalism. So they see themselves as responsible to fit the workers movement into the demands of the capitalist system, to "educate" their members to see that they must make deals that the employers agree to.

The demands of the capitalist system over the past forty years have been to cut the living standards of the working class. The union leaders have gone along with this and explained to their members there was no alternative. They have also crushed any alternative voice in the union movement which said there was an alternative, and this was to fight and oppose the employers offensive. Let us look at the implications of this. The union leaders have based themselves on the idea that concessions have had to be made. They have based themselves on the idea that victories could not be won by the workers. They have crushed all voices which have said that victories could be won. On this basis the union leaders have maintained their control over the union movement. Think about this.

What happens if we have a great victory, if the working class movement has a huge victory, for example that in Wisconsin we win the right to organize but also in the negotiations that follow we win increased wages and benefits and make the rich and the corporations pay for any deficit. This would be brilliant. And you would be right if you are looking at it from the rank and file workers' point of view. But think about it a bit more and this time from the union leaders point of view. Such a victory would completely undermine the total arguments, propaganda and actions of the union leaders for the past forty years. They have been saying no such victories were possible and their members had to make concessions and they have been crushing all who said this was not correct. But a major victory would show that it was this argument and position of the union leaders which was not correct. The result would be to severely undermine the ideas and positions and control of the trade union leaders. This  has to be kept in mind.

Consciously or not the majority of the trade union leaders neither believe nor want a major and absolutely clear cut victory in Wisconsin or in the other battle grounds throughout the country. As activists in the movement we have to be clear on this. The conclusion we have to draw is that while explaining the weakness of the arguments and approach of the trade union leaders and calling on them to change, we must not allow them to evade their responsibility to lead, but at the same time we have to be realistic and see what the union leaders will do and will not do, we have to see their role. This means that  as rank and file and activists in the movement we have to build caucuses in the workplaces, the union locals and at all levels in the unions and these to be based on an offensive strategy. That is based on recognizing the capitalist offensive against us and having as our target the defeat of this employer's offensive, the halting and throwing back of this offensive and the opening up of an offensive of our own, a working class offensive to make the employers and their class pay for the crisis of their system.

These caucuses should among other things base themselves on the following program;

Not a single cut in wages, benefits, spending, conditions. This to be a principle of these caucuses.

No contract be signed in which there are any concessions.

Every contract to be signed to contain increases for the workers covered and for spending in services.

For a $15.00 an hour minimum wage or a $5.00 an hour increase whichever is the greater.

For a guaranteed job for all through a public works program and reducing the length of the working week with no loss in pay.

For free education and free health care for all at the point of use.

For an end to all wars and occupations and a reduction in military spending.

For a campaign to explain how the employers and their class have used and still use racism and sexism to divide and rule the working class movement and to oppose this.

For the election of all union leaders subject to recall at any time, their wages to be the same as the average wage of their members and all their expenses to be made available to all their members.

For the building of a working peoples party as an alternative to the bosses parties the Republicans and Democrats.

For the movement to have at its center a discussion on the nature of the capitalist system and what the alternatives are. In the case of our blog we see the alternative as a Democratic Socialist Society in the US and on a world scale.

Sean.

Obama. Handing out more to the rich.

USA: Workers In Action.

Obama announced a two year salary freeze on Monday in the Wall Street Journal. Then on Tuesday he made the same announcement in the Financial Times. Then on Tuesday he repeated this again in the New York Times. He is making sure we all get the message.

And he is letting the Wall Street crooks and financial swindlers get the message too. He is telling they can keep their gains their big bonuses and their big tax cuts. Think about this. At the same time he is cutting workers wages he is filling the pockets of the super rich. Is there no depths to which he will not stoop?

It is simple. Obama and his regime are made up of the most rapacious capitalist representatives. They have no priority other than to fill their own pockets and the pockets of their class. They have no shame. So they cut the wages of working people and take every step they can to fill the pockets and bank accounts of themselves and their class. The only way they will be stopped is by the mobilized power of the working class.

We need to stop trying to figure out that there must be something more complicated here. There is not. It is pure greed, pure addiction to profit and power, it is the pure workings of the capitalist system. We have to stand up for ourselves, openly oppose the offensive of capitalism against us and go on an offensive of our own. Our offensive will be fighting for the following:

#Not a single concession on wages jobs or conditions or rights.

#For a $15.00 an hour minimum wage or a $5.00 an hour increase which ever is the greater.

#For free health care, education and affordable housing for all at the point of use.

#For a democratic socialist society.

Sean,

Bankers Raking in the Cash as Workers Lose Jobs, Homes and Access to Education and Health Care

“Competitive compensation practices are integral to retaining and attracting the best talent which is critical to the success of Citi and all its stakeholders.”

So says Citigroup spokeswoman Danielle Romero Apsilos. As Sean has pointed out numerous times on this blog, when they hand over millions to CEO’s their justification is that they won’t work for less but when they cut our wages they argue that we should be expected to work for less. And, if we don’t they’ll do what they have to to force us, including termination and, if necessary they’ll call out the troops.

Standing by its principals Citi has a new banker in its ranks. It has wooed Stephen Trauber over from UBS AG. The Wall Street Journal reports that this is a sign that Citi is regaining confidence after being bailed out by the taxpayer and having its executive compensation scrutinized by the government.

Trauber is expected to get about $30 million and a few other perks over three years. He brought a bunch of his buddies over to Citi with him.

Right after the bailouts, Citi was forced to curb some exec pay. Andrew Hall, one of its top execs was paid $98.9 million in 2008 and there was talk of even more for 2009 but Obama’s pay czar threatened to go public with the claim that such compensation was “against the public interest”. Citi CEO Vikram Pandit, like all of them bowing to the public mood agreed that $100 million for Hall for 2009, “would be excessive”.

Because of the widespread hatred of bankers that intensified after the crash, Pandit took home a “symbolic” $1 salary in 2009. With these thugs though you have to look a little deeper. He had already received $125,000 before making that announcement. He also received a compensation package valued at more than $38.2 million in 2008, this was “as the bank posted five consecutive quarters of multibillion-dollar losses and turned to the government three times for help.” Says the New York Times. Oh, one other detail, Pandit received nearly $80 million from selling his hedge fund to Citigroup in 2007.

Citi is still about one fifth owned by the US taxpayer but we don’t seem to get much say in what goes on there.

It’s clear that not all the public sector is having its wages and benefits cut.

Bleak Outlook for the US Economy

The bad news this morning shouldn’t come as much of a shock to those of us that rely on wage income.  Consumer confidence “slumped” in July causing distress among the owners of capital as consumer spending accounts for around 70% of economic activity.  If they can’t sell the product they can’t realize the wealth trapped within it.

According to Bloomberg, 7 out of 10 Americans believe the economy is in a deep recession. That shouldn’t surprise us and I would have thought it might be even higher; but polls do have their limits.  A major brake on the economy is job growth; unemployment officially hovers around 10% nationally but is much higher.  In Michigan the official unemployment rate is 13.6%, down a bit from the 14.5% figure in December.  This could be due to an exodus of worker’s from the state seeking opportunity elsewhere, Michigan has lost 11% of its total jobs since 2007.

Some of us on this blog have consistently pointed out the likelihood of continued economic stagnation and/or a double dip.  A deeper slump cannot be ruled out either. Housing, the source of so much spending power for US workers, is still in a slump.  According to LPS Applied Analystics a firm that tracks mortgage data, 4.5 million loans are in default or in some stage of foreclosure. (1)  Mortgages held by Fannie Mae and Freddie Mac have risen significantly, 21% in May and analysts point out that this reflects the failure of the government’s loan modification program having any permanent success. This is all bad news.

The insanity of the free market is that the oversupply of housing is likely to grow because developers and builders bought up huge tracts of land last year in anticipation of a housing rebound.  California’s coastal region has about two years supply of “builder ready land” according to the Wall Street Journal.  This land is owned by banks, speculators, investors and the government.  In many cases, investors are reluctant to let go of land or cease building as they assume the economy will eventually improve enough for them to make healthy profits and they don’t want to lose market share. This is the problem; why is shelter an issue with market share?  But that is because it is a commodity, an investment. The fact that it is shelter for people is secondary for those that control this sector of the economy.

This crisis is historic in the sense that is also a reflection of the continuing decline US capitalism’s global influence.  Two former government bureaucrats are arguing for more foreign direct investment in to the US in today’s Wall Street Journal. The US has lost 16% of its manufacturing jobs in this recession and now only 11.7 million workers are in this sector of the economy.  The authors point out that foreign multinationals account for 11.3% of capital investment, 14.8% of R&D in the private sector and 18.5% of all exports. They claim that compensation at foreign firms is 32% higher than the rest of the private sector and that unionization rates are higher also, 12.4% as opposed to 8.2%.

These strategists of capital recognize the shifting relations between the world powers and particularly the rise of China and India. And are calling on the Obama administration to liberalize the US economy, opening it up to more foreign direct investment in order to create jobs.  This is recognition of the facts on the ground.  US share of global foreign direct investment has fallen 50% in the past 20 years they point out.

But the future does not look too rosy as the world is awash with excess capacity as they say.  The productive forces that capitalism has at its disposal are too productive.  Production is set in motion in order to produce surplus value, the source of their profits.  If this is not forthcoming or profits are weak or low compared to outlay, they seek other moneymaking ventures. It is not an accident that gold prices have risen and there is need for more storage space for the metal reports claim.

As for those three out of ten that the survey found did not think the economy is in a deep recession, I assume  two of them are Oracle CEO Larry Ellison, top earner over the last decade whose compensation from 1999 to 2009 totaled $1.84 billion and Barry Diller IAC/Interactive CEO who came in second at a meager $1.14 billion.

It’s a tough life but they probably worked a lot of overtime for that.

For the rest of us, economic crises devastate lives while the Larry Ellisons and Warren Buffets (he lost $25 billion in 2008 poor sod) of this world feel no real pain whatsoever.  I cannot see a rosy scenario ahead for the capitalist economy, instead increasing insecurity and economic turmoil.  There is a real storm brewing out there if you ask me and I cannot see the anger not bursting to the surface in some major way at some point in the not too distant future if the economic picture is anything like I perceive it.  Of course, if I’m wrong and the debt, wars, political and economic crisis are overcome easily by US capitalism I’ll have to eat my words won’t I.

(1) Wall Street Journal 7-27-10

"Just because you don't take an interest in politics doesn't mean politics won't take an interest in you."  Pericles, 430 BC