Month: May 2018

Main St. Disney is Wall St. Disney

I have been a huge Disney World fan for several decades.  I loved going there, my kids loved going there, and even my wife loved going there (the first 6 or 7 times, but not so much the 13 times after that).  Now my kids have babies and I‘ve been looking forward to going to Disney World with them when they’re old enough to appreciate it so I can see the park through their new eyes on their first trip there.

Despite it’s being my best childhood dream, I never got to Disney Land as a kid (there was no Disney World at the time), but I made up for it as an adult. I realized shortly after my first trip to Orlando that Disney World was a place where I could escape Rest of the World both mentally and physically.  Stress disappeared and the only objective for each day was to have more fun.  I never counted, but I’d estimate that over a span of 30 years I’ve been to Disney World at least 20 times. (Extending a business trip for a day, I finally fulfilled the childhood dream by spending a full day in Disney Land in 1995.)

There are lots of folks who have been there many times more often.  It was my treasured escape, until today.

Today Bernie Sanders sent me and scads of his other admirers an e-mail asking us to sign a petition in support of the many Disney employees who have been shamefully treated by the Company.  My first whiff of the tarnish on Mickey’s statue came when a neighbor/friend told me that his son had just been fired without warning or cause from his job as a singer in Epcot.  That couldn’t be right. That wasn’t Disney, it was Rest of World.  I filed that a away in my “there has to be more to it” file, but today Bernie’s light shining on the corporate side of Disney moved that file into the “could well be” drawer.

I can’t tell the story better than Bernie Sanders did, so I pasted an abbreviated version of his call for help here:

The Walt Disney Company is an enormously profitable corporation worth somewhere in the neighborhood of $150 billion. Last year, it made $9 billion in profits and rewarded its CEO, Bob Iger, with a compensation package worth up to $423 million over a four year period. And as a result of the Trump tax cuts, they were given an additional $1.6 billion.

At the same time — and this is a national disgrace — employees at the company’s theme park in Anaheim, California are paid so poorly that many of them are literally living in a tent city not far from the park.

According to one recent study, nearly 1 in 10 workers employed at the park reported being homeless in the past two years, more than 2 in 3 say they are food insecure, and 3 out of 4 employees say they do not make enough money for their basic needs.

This is not what Mickey Mouse and Donald Duck are supposed to be about. This does not sound like the “happiest place on Earth” to me.

Now, I could be wrong, but I don’t expect you will see the plight of these low-wage workers at Disney discussed tonight on ABC, which is owned by Disney. Nor do I think you will be hearing too much about income and wealth inequality in the mainstream media….

It is long past time that we, as a nation, stop worshipping the corporate greed of Disney and businessmen like Bob Iger, their CEO.

While he may be regarded as a brilliant and successful businessman among his peers in the financial, media, and political elite, the truth is that the way Bob Iger and Disney treat their workers represents much of what is wrong with contemporary capitalism.

This is a company, and a CEO, that accepted an obscene tax cut gifted to them by the Trump administration and Republicans in Congress, publicly promised to anyone who would listen a $1,000 bonus for all of their employees, and then withheld that bonus from some union employees unless they agreed to a contract that gave them a tiny raise to a wage that is still a starvation wage.

This is a company, and a CEO, that in addition to paying their workers here at home extremely low wages, employs many thousands of people in China to manufacture their products sold at Disney stores and online.

This type of greed and ruthless capitalism is not an economic model that we should be embracing. It is not to be celebrated. We can do better, and we must do better…

 

It’s me again. Speaking only for myself, it pains me deeply to realize and say that Disney must do better to earn the respect and interest I once had in this once great Company.  I happen to be a Disney Shareholder, but not one with the wherewithal that the company would take seriously.  I can only hope that others, shareholders and/or Disney enthusiasts, who find this uncharacteristic greed disconcerting will sign Bernie’s petition.  I did.  Maybe the petition will get their attention.

It feels to me as though Mickey has lost his soul.

https://go.berniesanders.com/page/s/disney-greed?source=em180531-t1-full

 

Student Loans: The Gift that Keeps on Taking

I am increasingly concerned about what appears to be strategic planning on the part of some of the 1%.  Of course the plans don’t bode well for the rest of us.  Their objective involves the systematic killing of the American Dream of home ownership to create a new, steady and significant cash flow into their already overflowing coffers for decades ahead.

Here’s how I see it:

America will always need highly educated workers and tradespeople, but the cost of a college education or a technical school is very high and spiraling out of reach for middle class families, and even more so for those close to either side of the poverty line. Many institutes, colleges and universities are well endowed and offer scholarships that defray some of the tuition and cost of living burden on students, but the portion of these costs that are not covered by scholarships and grants are still substantial.

In order to make ends meet, more and more students have no choice but to take a out student loan – the gift that keeps on taking.

When many students graduate, the value of the degrees they earned is likely more than offset by the student loans they owe. They begin their careers saddled with five or six figures of debt that is often comparable to the cost of a nice home.  In essence, they have a mortgage without a dwelling and there’s no way out of that pile of debt in less than a decade unless one wins a lottery. Unlike many other loans and obligations, college loans are not forgiven (erased) when one declares bankruptcy.  In other words, someone took great care to keep these people bottled up for several years.

I have noticed over the years that many real estate developers, especially in big cities and suburbia, are building far more apartments and other rental units than they are condominiums or “starter homes.”  I wondered why, and then considered what they might be up to.

The student-loan-laden graduates have begun to earn good money in the marketplace.  But with the equivalent of a monthly mortgage to pay off student loans before paying other bills, including rent, these folks have little if any funds to save for a down payment on a home.  The rents they pay are like a second mortgage, only they are building no equity when they pay it.  Who is the beneficiary of the equity in this transaction?  The landlords (who are often the developers and/or financiers of the projects).

This generation of young professionals and skilled tradespeople are in a tough spot if they want to eventually own a home.  Rents look more and more like mortgage payments without the benefits.  What incentive is there for these people that could make a mortgage payment more attractive than a rent payment?

Until this year, there was such an incentive. Interest payments on mortgages used to be tax deductible, but they aren’t under the golden haired wonder’s “tax reform.”  Not only did the Republicans (many of whom are basically owned by the 1% profiteers) hand over more than 80% of the benefits built in their tax reform to the 1%,  at the same time they drove another nail in the coffin of the American Dream to own a home. No 20% down payment plus no tax deduction of mortgage interest equals no compelling reason to try to own a home.  They have few viable alternatives but to be renters.

This, and the last minute packet of special incentives for Real Estate Developers that was packed into the tax legislation in the 11th hour as a reward to the golden haired boy and his ilk, is too coincidental not to stink of collusion.

Within the next 20 – 30 years in America, landlords will have enjoyed an enormous captive marketplace and a great deal of influence in the quality of life for Americans.  Their strategy is largely already in place, and until and unless the tax codes in America are repaired, they will no longer be one of the only means by which the insane distribution of wealth in America can be changed.  The “let them eat cake” attitude of turning a blind eye to financial oppression is a time tested recipe for ugly, catastrophic revolution.