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Straight Talk

By James Hettinger
Senior Advisor, Battle Creek Unlimited
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We have discussed innumerable times how those professing to “protect” or “restore” the middle class are, in fact, destroying the middle class whether it is done in blind pursuit of an ideological agenda or counterintuitive consequences of pressing too hard. It really does not matter as the damage is being done and will continue.

In the heated political rhetoric, the tendency to oversimplify is more than your average addled political mind can resist. Thus, we will discuss corporations as in “greedy corporations” or “global corporations”or my favorite, “rich corporations.” Obviously the hyperbole is directed at the adjective rather than the noun.

What is a corporation? Inc. magazine defines a corporation as “...a business or organization formed by a group of people and it has rights and liabilities separate from those of the individuals involved.”

Corporations enjoy the same rights as individuals. They can acquire property, sell it, lease it and bring lawsuits. A corporation can be prosecuted and punished.

Most definitions start with the assumption that corporations are started by and operated by people. Corporations are not inanimate objects. They are established by people; they are operated by people and, if they are successful, they provide compensation for their employees and investors.

So what do we have that would indicate the hyperbole-laced, sweeping generalizations about greedy, global or rich corporations are anywhere near accurate? If corporations are any of those things, it is because the people within a corporate unit have clearly gone off the road.

Presidential candidate Mitt Romney found out recently that there will be paid hecklers of all stripes showing up at political rallies and speeches. Instead of responding to the oversimplified hyperbole, candidates would be well advised to engage the hecklers and demand that they spell out exactly what they mean to the crowd.

They and the voting public will find little substance. However, these people are not being paid to be smart. They are being paid to be noisy. There will be no interest in a substantive discussion of the issues, but there should be. And political candidates should show that they are not intimidated by mindless chanting. I say mindless because there are huge implications for the American middle class. And, since unions have proclaimed their role in strengthening the American middle class, perhaps they, too, need to get beyond rhetoric and back into reality.

Interestingly, if you look at union pension funds in this country, you will find they are heavily invested in many of these greedy, global or rich corporations. If the unions want the best for their dues payers, particularly those nearing retirement, they might try to stop wishing for something before they, or more accurately, their dues payers get it.

A majority of the 401(k) pension plans in this country — union and nonunion alike — have investments in these greedy, global or rich corporations. So when organizations like the Service Employees International Union, or people like Richard Trumka call for “taxing big oil,” or ending corporate tax breaks, just remember there is a very strong possibility it will be taken out of the hides of dues-paying union members as well as the so-called middle class.

Here’s a reality. Corporations do not pay taxes. They pass those costs on to their customers, their employees and their investors. Judgments have to be made all the time about where to pass on costs. If the judgment is made to pass the costs on to investors, it could well be the middle class union family that pays the price because, through their pension investments, they were expecting a decent retirement. Ginned-up, anti-corporate rhetoric and policy may well end those dreams. There is a government with a voracious appetite, and they will take money from anything and anybody.

So, if you are a union dues payer with a pension or if you are a middle class American family hoping for a decent retirement, obtain the information about where your investments are. Follow the money. It might lead into Exxon Mobil or British Petroleum or Boeing or Proctor and Gamble.

If you, because you are susceptible to wealth envy or class warfare, want to punish the greedy, global or rich corporations, take a look at where your pension investments are placed. You might just be putting a gun to the head of your middle class existence and your dreams of comfortable retirement.

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