On this day celebrating the birth of Dr. Martin Luther King who immortalized the words “I have a dream”, we should all stop and take a moment to remember the compelling message of hope that he gave as a gift to us all.
To Dr. King, racial equality was just part of the inspired and virtuous future he envisioned for our nation. He also dreamt of a society where economic fairness would become part of the essential fabric of our democracy. Dr. King’s stirring and inspirational words allowed every man, woman and child to visualize their deserved place in the sun, a society of inclusion without the divisions of class built with the brotherhood and generosity that he believed all men and women capable of. That was his dream for us, and it should be our dream to honor him by fulfilling that.
Today, the reality is that the goals of ending poverty and economic disparity that Dr. King articulated so eloquently have still not been achieved. There are still formidable obstacles built upon foundations of greed standing in the way, and a growing economic disparity that prevents millions of Americans from being able to realize his dream.
Nothing represents these obstacles more than leveraged buyout (private equity) firms such as KKR, led by billionaire Henry Kravis. Companies like KKR and men like Kravis are the antithesis of what Dr. King stood for, seekers of limitless wealth for the few at the expense of the many. Private equity firms like KKR generate huge profits by acquiring public companies with primarily borrowed money. They then take them private to ensure secrecy and often dissect and restructure them for the purpose of selling the company later. In the process, these firms sometimes lay off workers, cut wages and restrict medical benefits to drive up the stock price and increase profitability, insuring a higher sales price. Kravis and others like him also benefit from tax breaks unavailable to the average American. He pays a tax rate of only 15% on a majority of his $450,000,000 annual income, percentage-wise, less tax than many teachers, firemen, and policemen pay.
Brave New Films ongoing “War on Greed” campaign seeks to educate the public about how leveraged buyout firms like KKR operate and the damage that they often do. This new video in the series, “Fight For The Dream” tells the story of the workers at Accuride’s Rockford, Illinois plant; a company bought by KKR, and contrasts the exploitation they faced with Dr. King’s message of equality and dignity.
When KKR acquired Accuride in 1997, it was a healthy and prosperous company with little significant debt. Its net income for that year was almost $29 million, more than $2 million more than in 1996. Yet after Accuride was bought, their debt soared from $16 million to over $400 million with much of that going to fees for KKR and its partners. KKR sold Accuride in May 2007. Having paid $468 million for the company in 1997, they sold it for less than they bought it for, yet they still made money. KKR is estimated to have earned a total of $79,868,656, a 77.47% profit on the $108 million of equity invested. The massive debt of course, stayed with the company.
Then, there was the pain for the workers. While Kravis and his partners enjoyed their millions, workers at Accuride faced layoffs (one fifth of the workforce at one of its plants), wage freezes, reduced hours (40 hour work week to 35 hour work week at its Rockford foundry) and diminished benefits.
One employee at Accuride left work to take care of his brother when he learned that he had had a heart attack, an attack that killed him a few days later. When this worker returned to his job, he was written up for having abandoned his post that day. Management told him he was wrong to leave work to see his brother, because he didn’t die that day.
When striking Accuride workers were locked out, the toll was terrible. Broken marriages were common, and it was reported that several committed suicide. Workers who had suffered from years of backbreaking work and exposure to toxic chemicals found themselves unable to pay for badly needed medical treatment. One worker had to forgo medications she needed, faced heart surgery and had to sell her car and move into a trailer to make ends meet. This should never occur in America.
During the last few years of his life, Dr. King worked tirelessly to engage the rich and the powerful on economic issues and to help the disadvantaged and poor fight for an economic bill of rights.
Dr. King said this: "True compassion is more than flinging a coin to a beggar; it is not haphazard and superficial. It comes to see that an edifice which produces beggars needs restructuring".
Dr. King was right, our system does need restructuring as the uneven playing field that enables the greed and predatory practices of companies like KKR illustrates. Help make Dr. King’s dream of economic fairness a reality and don’t let the private equity industry and the laws that enable them go unchallenged.
Watch the video, pass it on to your friends and family and sign the petition urging the presidential candidates to pledge to close the tax loophole for leveraged buyout tycoons. You can make a difference and do something substantive to effect change in this country and help Dr. Martin Luther King realize his dream.