The Corporate Control Of Society And Human Life

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Tue, 25 Apr 2006 09:15:15 -0700 (PDT)

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The Corporate Control Of Society And Human Life

 

 

 

 

The Corporate Control Of Society And Human Life

Stephen Lendman

 

April 24, 2006

 

Large transnational corporations are clearly the dominant institution

of our time. They're preeminent throughout the world but especially in

the Global North and its epicenter in the US. They control or greatly

influence what we eat and drink, where we live, what we wear, how we

get most of our essential services like health care and even what

we're taught in schools up to the highest levels. They create and

control our sources of information and greatly influence how we think

and our view of the world and them. They even now own patents on our

genetic code, the most basic elements of human life, and are likely

planning to manipulate and control them as just another commodity to

exploit for profit in their brave new world that should concern

everyone. They also carefully craft their image and use catchy slogans

to convince us of their benefit to society and the world, like:

" better things for better living through chemistry " (if you don't mind

toxic air, water and soil), " we bring good things to life " for them,

not us), and " all the news that's fit to print " (only if you love

state and corporate friendly disinformation and propaganda). The

slogans are clever, but the truth is ugly.

 

Corporations also decide who will govern and how. We may think we do,

but it's not so and never was. Those national elections, especially

the last two, only looked legitimate to most people, but not to those

who know and understand how the system works. Here's how it really

works. The " power elite " or privileged class C. Wright Mills wrote

about 50 years ago in his classic book by that title are the real king

and decision makers. He wrote how corporate, government and military

elites formed a trinity of power after WW II and that the " power

elite " were those " who decide whatever is decided " of importance. The

holy trinity Mills wrote about still exists but today in the shape of

a triangle with the transnational giants clearly on top and

government, the military and all other institutions of importance

there to serve their interests. These corporations have become so

large and dominant they run our lives and the world, and in a zero sum

world and the chips that count most in their stack, they do it

fortheir continuing gain and at our increasing expense. Something is

way out of whack, and in this essay I'll try to explain what it is and

why we better understand it.

 

The Power of Transnational Corporations

and the Harm They Cause

 

As corporations have grown in size they've gained in power and

influence. And so has the harm they cause - to communities, nations,

the great majority of the public and the planet. Today corporate

giants decide who governs and how, who serves on our courts, what laws

are enacted and even whether and when wars are fought, against whom

and for what purpose or gain. It's for their gain, who else's,

certainly not ours. Once we start one, they can even make profit

projections from it like on any other business venture. For them,

that's all it is - another way to make a buck, lots of them.

 

The central thesis of this essay is that giant transnational

corporations today have become so dominant they now control our lives

and the world, and they exploit both fully and ruthlessly. While they

claim to be serving us and bringing us the fruits of the so-called

" free market, " in fact, they just use us for their gain. They've

deceived us and highjacked the government to serve them as subservient

proxies in their unending pursuit to dominate the world's markets,

resources, cheap labor abroad and our own right here. And they've done

it much like what happens in the marketplace when a predator company

attempts to take control of another one that prefers to remain

independent. They launch a hostile takeover, going around or over the

heads of the target's management, their employees and the communities

they operate in. They go right to the target's shareholders and

promise them a better deal, meaning a premium price on the stock they

hold.

 

They do this, as in a friendly merger, for a variety of financial and

strategic reasons, but essentially it's to achieve any possible

immediate gain as well as over the longer term greater market

dominance that will build future profits. But what happens in the wake

of a takeover. Assets get stripped, spun-off and/or sold-off. Plants

are closed. Jobs are lost. And all this is done for the primary bottom

line goal - " the bottom line, " higher profits, whatever the cost to

people, communities or society.

 

Think of it this way. Large corporations today everywhere, but

especially the largest ones in the Global North, are a destructive

force, hostile to people, societies and the environment. They're

nothing less than legal private tyrannies operating freely with

virtually no restraint. Everything for them, animal, vegetable or

mineral, is viewed as a production input to be commodified and

consumed for profit and then discarded when no longer of use. And to

achieve maximum profits, costs must be rigidly controlled. That means

the lowest prices paid for goods and services, the lowest wages paid

to workers (below privileged higher management who reward themselves

richly), as little as possible spent on essential benefits like health

care and pensions, and increasingly little or no concern about the

long-term cost of exploiting, plundering or even destroying the

natural environment and the future ability of the planet to sustain

life. These issues, however recognized and grave, are for someone else

to deal wih later.

 

For now all that matters is today, the next quarter's earnings and

keeping the stockholders and Wall Street happy. They only understand

numbers on financial statements and are blind, unconcerned and even

hostile to human and societal welfare or a safe environment that will

protect and sustain all life forms. They call it " free market

capitalism. " It's really the law of the jungle. They're the predators,

we're the prey, and every day they eat us alive.

 

Does all this make sense? And do corporate chieftains who live in a

community, love their wives and children, contribute to charities,

attend church and believe in its teachings really go to work every day

and think - " who and what can I exploit today? " They sure do because

they have no other choice. No more so than breathing in and breathing out.

 

How the Law Affects Corporate Behavior

 

Publicly owned corporations are mandated by law to serve only the

interests of their shareholders and do it by working to maximize the

value of their equity holdings by increasing profits. That's it. Case

closed. Think of these businesses as gated communities of owners

(large and small), the welfare of whom is all that matters and the

world outside the gates is to be used and exploited for that one

purpose only. Forget about any social responsibility or safeguarding

the environment. The idea is to grow sales, keep costs low, increase

profits, and if you do it well, shareholder value will rise, the

owners and Wall Street will be happy, and you as a CEO or senior

executive will probably get a raise, good bonus and keep your job. Try

being worker-friendly, a nice guy, a good citizen or a friend of the

earth and fail to achieve the above objectives and you'll likely face

dismissal and even possible shareholder lawsuit for not pursuing your

fiduciary responsibility. Anyone choosing this line of work has n

other choice. To do the job well, you have to think only of the care

and feeding of your shareholders and the investment community, ignore

the law if that's what it takes to do it, and obey the only law that

counts - the one that helps you grow the " bottom line. "

 

There's nothing in the Constitution, which is public law, that gives

corporations the rights they've gotten. It never mattered to them.

They just crafted their own private law, piece by piece, over many

years with the help of corporate-friendly lawyers, legislators and the

courts. And today it's easier than ever with both major parties

strongly pro-business and the courts stacked with business-friendly

judges ready to do their bidding. The result is big business is now

the paymaster, or puppetmaster, with government and the halls of

justice their faithful servants. There's no government of, for and by

the people, no public sovereignty, no democratic rights or any choices

but to accept their authority and bow to their will. It's a democracy

for the few alone - the privileged elite. Our only choice is to go

along to get along or get out of their way.

 

A Profile of the World's Largest 200

Transnational Corporations

 

In December, 2000 The Institute for Policy Studies released a report

called " The Rise of Corporate Global Power. " It was a profile of the

200 largest transnationals that showed just how dominant they are. A

summary of their findings is listed below.

 

1. Of the world's 100 largest economies, 51 are corporations.

 

2. The combined sales of these 200 corporations (called " The Group "

below) in 1999 equalled 27.5% of world Gross Domestic Product (GDP)

and are growing faster than overall global economic activity.

 

3. The Group's combined sales exceed the total combined economies of

all nations in the world except the largest 10.

 

4. The Group's combined sales are 18 times the income of the bottom

one fourth of the world's population (1.2 billion people) living in

" severe " poverty.

 

5. Despite their combined size and percentage of world economic

activity, The Group employs only 0.78% of the world's workforce.

 

6. From 1983 to 1999 The Group's workforce grew only 14.4% while their

profits increased by 362.4% or about 25 times as much.

 

7. The largest employer in the world, Walmart, employed 1,140,000 in

1999 (1.6 million in 2005) or 5% of The Group's total employment. It's

also a model (and increasingly a target) for corporate union-busting,

widespread use of part-time workers and a practice of avoiding giving

its workers needed benefits like health insurance.

 

8. 82 US corporations are in The Group, twice as many as Japan with

41, the next highest contributing country.

 

9. 44 of the US corporations in The Group didn't pay the full 35%

federal tax rate from 1996 - 1998. 7 of them paid no tax in 1998 and

also got tax rebates, including Enron and Worldcom now exposed as

corporate criminals.

 

10. The percent of The Group's sales from the service sector (not

manufacturing) grew from 33.8% in 1983 to 46.7% in 1999. In the US,

the service sector comprised 79% of the total economy in 2004.

 

How Corporate Behavior Affects the Public Interest

 

Big corporations have almost always thrived in the US. But a crucial,

defining moment happened in 1886 when the Supreme Court granted

corporations the legal status of personhood in Santa Clara County v.

Southern Pacific Railway - a simple tax dispute case unrelated to the

issue of corporate personhood. Incredibly it wasn't the Justices who

decided corporations are persons, but the Court's reporter (J.C.

Bancroft Davis) who after the decision was rendered wrote it in his

" headnotes. " The Court did nothing to refute them, likely by intent,

and the result was corporations got what they had long coveted.

 

That decision granted corporations the same constitutional rights as

people, but because of their limited liability status, protected

shareholders from the obligations of their debts, other obligations,

and many of the responsibilities individuals legally have. Armed with

this new legal status corporations were able to win many additional

favorable court decisions up to the present. They also gained much

regulatory relief and favorable legislation while, at the same time,

being protected by their limited liability status. As a result,

corporations have been able to increase their power and grow to their

present size and dominance.

 

Although corporations aren't human, they can live forever, change

their identity, reside in many places simultaneously in many

countries, can't be imprisoned for wrongdoing and can change

themselves into new persons at will for any reason. They have the same

rights and protections as people under the Bill of Rights but not the

responsibilities. From that right, corporations became unbound, free

to grow and gain immense power and be able to become the dominant

institution that now runs the country, the world and all our lives.

Most important, they got an unwritten license from all three branches

of the government to operate freely for their own benefit and others

of their privileged class and do it at the public expense everywhere.

They've exploited it fully as they're grown in size and dominance, and

the result has been lives destroyed, the environment harmed and

needless wars fought on their behalf because they open markets and

grow profits. It's no exaggeration to say these institutions today are

rea " weapons of mass destruction. "

 

In the early days of the republic it all might have been different had

Thomas Jefferson and James Madison prevailed over Federalists John

Adams and Alexander Hamilton. Jefferson and Madison believed the Bill

of Rights should include " freedom from monopolies in commerce " (what

are now giant corporations) and " freedom from a permanent military " or

standing armies. Adams and Hamilton felt otherwise, and the final

compromise was the first 10 Bill of Rights amendments that are now the

law but not the other two Jefferson and Madison wanted included. Try

to imagine what this country might be like today had we gotten them all.

 

We didn't, of course, so the result, as they say, is history. It

allowed small corporations to grow into giants and so-called " free

market capitalism " to become the dominant state religion of this

country and the West. We may say it's free, but it only is for those

own and control it, and notice we never hear the system called " fair. "

That's because in most key industries a handful of corporate giants

dominate and now work in cartel-like alliance with their " friendly "

competitors here and abroad to control (read: exploit) the markets

they serve. They're also able to co-opt the leaders and business

elites of countries in the developing world, or work in partnership

with them in the larger ones like China, India and Brazil, to allow

them market entry. As an inducement, they offer to invest their

capital and offer their technology in return for a business-friendly

climate and access to the host country's cheap labor. It's an alliance

based on pure exploitation for profit at the expense of people who are

sed, abused and discarded when they have no further value.

 

This essay is mainly about how these same corporate giants dominate

and exploit here in the US. They can't get away with the flagrant

abuses commonplace in sweatshop labor countries, but they're moving in

that direction. It's no longer like the past in this country when I

was young and beginning my working life (a distant memory of better

times) when manufacturing was strong, jobs paid well and had good

benefits, and workers were protected by strong unions that served

their interests even while partnering with management and willing to

do the bidding of government.

 

I still remember well an incident early in my working life when as a

newly minted MBA I worked as a marketing research analyst for several

large corporations prior to joining a small family business. At one of

those companies in the early 60s, my boss called me into his office on

my first day on the job. He jokingly told me he was so happy with my

work he was giving me a raise. We both chuckled, and he then explained

on that day everyone in the company got an inflation-based increase.

It was automatic from the lowliest worker to top management because

the unions (then strong) got it written into their labor contract. In

that company, everyone got the same benefits as union members. Try

finding anything like that today even for union members alone. It's

almost unheard of.

 

Today, the country is primarily dominated by service industries many

of which require little formal education, only pay low wages and few

if any benefits, and offer few chances for advancement. The US

Department of Labor projects that job categories with the greatest

expected future growth are cashiers, waiters and waitresses, janitors

and retail clerks. These and other low wage, low benefit jobs are what

many young people entering the workforce can look forward to today.

You don't need a Harvard degree for them or even one from a junior

college - and for the ones listed above, no degree is needed, not even

a high school one.

 

The continuing decline of good job opportunities is a key reason why

the quality of education in urban schools has deteriorated so much in

recent years and school dropout rates are so high. In my city of

Chicago, half of all students entering high school never graduate and

of those who do 74% of them must take remedial English and 94%

remedial math at the Chicago City Colleges according to a report

published in the Chicago Sun Times. The situation isn't much better in

inner cities throughout the country, nor is the level of racial

segregation that's grown to levels last seen in the 1960s according to

Jonathan Kozol in his new book The Shame of the Nation. Again in

Chicago, a shocking 87% of public school enrollment was black or

Hispanic, and the situation is about as bad or even worse in most

other big cities.

 

The lack of good job opportunities for a growing population of

ill-prepared young people is also a major reason for the growth of our

prison population that now exceeds 2.1 million, is the largest in the

world even ahead of China with over four times our population, and is

incarcerating about 900 new prisoners every week. I wrote a recent

heavily documented article about this called The US Gulag Prison System.

 

The US Has Always Been the Unthinkable

and Unmentionable - A Rigid Class Society

 

The US has always been what the " power elite " never admit or discuss -

a rigid class society. But once there was a thriving middle class

along with a small minority of rich and well-off and a large segment

of low paid workers and the poor. That majority in the middle could

afford their own homes, send their kids to college and afford many

amenities like new cars, some travel, convenience appliances and

decent health care. I can still remember buying a health insurance

plan while finishing my graduate work in 1959 that cost about $100 and

change total for respectable coverage for a full year. Honest, I'm not

kidding.

 

Fewer people each year can afford these " luxuries " now, including

decent health care coverage, because of the hollowing out of the

economy, stagnant wage growth (to be discussed below) and skyrocketing

costs of essentials like health insurance, prescription drugs and

college tuition for those wanting a higher education. Services now

account for nearly 80% of all business while manufacturing has

declined to about 14%, and total manufacturing employment is half the

percentage of total employment it was 40 years ago and falling. Also,

financial services of all types now comprise the largest single sector

of the economy at 21% of it. But most of it involves investment and

speculation running into the hundreds of trillions of dollars annually

worldwide (and the US is the epicenter of it all) just for

transactions involving currencies and so-called over-the-counter and

exchange-traded financial derivatives. It's not the purpose of this

essay to explain the nuts and bolts of this kind of trading except to

say hey produce nothing anyone can go in a store and buy or that

enhance the well-being of the majority public that doesn't even know,

let alone understand, that this kind of activity goes on or what the

inherent dangers from it may be.

 

The dismantling of our manufacturing base, however, is a subject that

should make daily headlines but is seldom discussed in the mainstream.

It's crucially important because one has to wonder how any nation can

avoid eventual decline when it allows its manufacturing to be done

abroad, reduces its need for a highly trained work force and ends up

destroying its middle class that made it prosper in the first place.

There are distinguished thinkers who believe as I do that the US has

seen its better days and is now in a downward trajectory economically.

Unless a way is found to reverse this destructive trend, the US will

be Number One only in military spending and waging wars. And no nation

in history based on militarism and conquest has ever not failed

ultimately to destroy itself.

 

I'd like to quote two distinguished thinkers who've addressed the

issue of growing inequality in the US. On most social matters they'd

likely disagree, but not on this one. One was former liberal Supreme

Court Justice Louis D. Brandeis who explained: " We can have democracy

in this country, or we can have great wealth concentrated in the hands

of the few, but we can't have both. " The other was distinguished " free

market " economist and Nobel laureate Milton Friedman. In his view:

" The greatest problem facing our country is the breaking down into two

classes, those who have and those who have not. The growing

differences between the incomes of the skilled and the less skilled,

the educated and the uneducated, pose a very real danger. If that

widening rift continues, we're going to be in terrible trouble.....We

cannot remain a democratic, open society that is divided into two

classes. "

 

The Downward Trajectory of American Workers

 

Over the past generation working people have seen an unprecedented

fall in their standard of living. In the past (except for periods of

economic downturn), workers saw their wages and benefits grow each

year and their living standards improve. Today it's just the opposite.

Adjusted for inflation, the average working person in the US earns

less than 30 years ago, and even with modest annual increases is not

keeping up with inflation. In addition, the federal minimum wage is a

paltry $5.15 an hour and was last increased in 1997. That rate is now

at the lowest point it's been relative to average wages since 1949.

It's incentivized individual states to raise their own which they have

the right to do, and, as of mid-year 2005, 17 of them and the District

of Columbia have done it covering nearly half the US population. That

helps, but not enough.

 

Some of the world data is especially shocking, appalling and

indicative of the economic trend in the US. According to the UN 2002

Human Development Report, the richest 1% in 1999-2000 received as much

income as the bottom 57% combined, over 45% of the world's population

lived then on less than $2 a day, about 40% had no sanitation services

and about 840 million people were malnourished. In addition, 1 in 6

grade school children were not in school, and half the global

nonagricultural labor force was either unemployed or underemployed.

Most shocking and disturbing of all is that many millions (likely tens

of millions) of people in the less developed world die each year from

starvation and treatable diseases because of abuse and/or neglect by

rich nations that could prevent it. And these numbers reflect the

state of things at the end of a decade of overall impressive economic

growth. But it shows how those gains went mainly to a privileged upper

class who got them at the expense of the majority below them

especially the most desperate and needy.

 

The same trend is evident in the US although not as stark as in the

less developed world. Except for the mild recession in 2001-2002,

overall US economic growth for the past 15 years has been strong and

worker productivity high. But the gains from it went to the privileged

at the top and were gotten at the expense of working people who saw

their wages fail to keep up with inflation and their essential

benefits decline. In 2004 the average CEO earned 431 times the income

of the average working person. That was up from 85 times in 1990 and

42 times in 1980. It's hard to believe and even harder with the real

life example below.

 

I'd like to nominate a " poster executive " who for me symbolizes

classic gross corporate excess and greed. He's the chairman and CEO of

Capital One Financial, the giant credit card company that's awaiting

the finalizing of its acquisition of North Fork Bancorp. At completion

of this deal, the Wall Street Journal reported on March 24 this lucky

fellow will realize a gain of $249.3 million from stock options he

exercised last year. That's in addition to the $56 million he earned

in 2004. What on earth will he spend it on, and how many less

fortunate ones will have to ante up to pay for this in the de rigueur

job cuts that always follow big acquisitions.

 

And what will all those other lucky CEOs and top executives spend

theirs on as well. If you're not already gagging, let me make you

choke. According to a study just released by two Ivy League academics

based on interviews with CEOs and top managers of the largest 1,500

public US companies, the top five executives collectively at those

companies pocketed $122 billion in compensation from 1999-2003 plus at

least $60 billion more in supplemental benefits from SERPs

(Supplemental Executive Retirement Plans). Also, other data show

average annual CEO pay rose from about $1 million a year in 1980 to an

estimated $14.4 million in 2001 and rising - plus all those juicy

benefits. I repeat - what on earth can they spend it on. They could

never even count it.

 

Reasons for This Unabated Downward Trajectory

 

The reasons for this decline were as follows:

 

The shift away from manufacturing to services.

 

The growth of so-called " globalization " sending many jobs abroad

including high-paying ones.

 

The decline of unions to levels last seen before the mass unionization

struggles of the 1930s because of government and corporate antipathy

toward them and corporations using the threat to close plants and move

jobs offshore to force workers to take pay cuts and accept lower

benefits. And then they still move jobs abroad.

 

Deregulation of key industries including transportation,

communications and finance, which opened these industries to low cost

competition that put pressure on unions and forced workers to accept

lower pay and benefits to keep their jobs.

 

The growth of high technology allowing machines (mainly computers) to

do the work of people, thus reducing the need for them.

 

The effects of racism and sexism (in a society with deep-rooted

racism, sexism and classism) as seen in the data showing 30% of black

workers and 40% of Latino workers earning poverty wages with women in

both categories most affected. And the average black family owns only

14% as much as the average white family.

 

The unabated downward trajectory of workers' real income already

discussed. The only family income gains have come from two income

households, in many cases because wives were forced to enter the

workforce out of necessity.

 

Statistics Documenting the Decline

 

Hot off the press from the latest US Federal Reserve triennial survey

(and most comprehensive one of all) of household wealth published in

late February, 2006:

 

--Median American family income grew a paltry 1.5% after inflation

between 2001 and 2004, but there was a widening gap between upper and

lower income households.

 

--While the richest 10% rose an inflation adjusted 6.5%, the bottom

25% fell 1.5%.

 

--Stephen Brobeck, Executive Director of the Consumer Federation of

America, explained - " While the typical American household basically

ran in place, less affluent households actually lost ground. "

 

Even hotter off the press, the US Department of Labor and

Congressional Budget Office reported in late March that in the last 5

years ending year-end 2005, inflation adjusted GDP per person rose

8.4% but the average weekly wage fell 0.3%. Following a long-term

trend since the 1970s, those in the upper income percentiles gained

the most while those in the lower half of them lost the most. And the

income gap between rich and poor continued to widen.

 

--The racial disparity was especially dramatic. The median white

family's net worth in 2004 was $140,700 compared with $24,800 for the

typical nonwhite family.

 

According to the 2005 Federal Poverty Guidelines, 12.7%, or 37 million

people, lived in poverty in 2004. However, because of an acknowledged

flawed model to measure poverty, the true number is far higher - at

least many millions more and increasing even in times of prosperity.

 

In December, 2004 the New York Times reported the US ranked 49th in

world literacy, and the US Department of Labor estimates over 20% of

the population is functionally illiterate (compared to about 1% in

Venezuela and Cuba, two of the countries we demonize the most). It's

also true, as discussed above briefly, that the quality of public

education has been in decline in urban schools for many years. In

addition (also mentioned), the extent of racial segregation is now as

great as in the 1960s, despite supposed but unrealized gains from the

civil rights legislation of that time. Further, state and local

education budgets aren't keeping up with a growing need or are being

cut. It's also no better for those needing college aid as federal Pell

grants have been frozen or cut for three straight years, and it was

just reported in late March by public college finance officials that

state higher education funding has fallen sharply from $7,121 per

student in 2001 to $5,833 in 2005. It means a growing number of lwer

income students are now deprived of a chance for higher education -

and it's getting steadily worse.

 

The World Health Organization ranked the US 37th in the world in

" overall health performance " and 54th in the fairness of health care.

And in 2004 about 46 million people had no health insurance and

millions more were underinsured. These appalling numbers are in spite

of the fact that the US spends far more on health care per capita than

any other country. And all developed countries in the world, except

the US and South Africa, provide free health care for all its citizens

paid for through taxes.

 

The European Dream reported US childhood poverty ranked 22nd or second

to last among developed nations.

 

The US ranked last among the world's 20 most developed nations in its

worker compensation growth rate in the 1980s with conditions only

slightly better in the 1990s.

 

The New York Times reported 12 million American families, over 10% of

all households, struggle to feed themselves.

 

The NYT also reported the US ranks 41st in world infant mortality.

 

All this and many more depressing statistics are happening in the

richest country in the world with a 2005 Gross Domestic Product of

$12.5 trillion.

 

The dramatic effects of social inequality in the US are seen in the

Economic Policy Institute's 2004 report on the State of Working

America. " It shows the top 1% controls more than one-third of the

nation's wealth while the bottom 80% have 16%. Even worse, the top 20%

holds 84% of all wealth while the poorest 20% are in debt and owe more

than they own.

 

Corporate Gain Has Come at the Cost of Worker Loss

 

Not coincidentally, as workers have seen their living standards

decline, transnational corporations have experienced unprecedented

growth and dominance. And that trend continues unabated. How and why

is this happening? Begin with the most business-friendly governments

the country has had over the last 25 years since the " roaring " 1920s

when President Calvin Coolidge explained that " the business of America

is business. " He, and two other Republican presidents then did

everything they could to help their business friends. But they were

small-timers compared to today, and the size, dominance and global

reach of big business then was a small fraction of what it is now. And

back then, job " outsourcing " , GATT and WTO type trade agreements, and

the concept of globalization weren't in the vocabulary. Now they're

central to the problem as they've put working people in corporate

straightjackets and created a severe class divide in the country (not

to mention the developing world where it's far worse) that keep widening.

 

How World Trade Agreements Destroy Good Jobs

and the American Dream

 

World trade between nations is nothing new, and the General Agreement

on Tariffs and Trade (GATT) has been around since it was formed in

Havana, Cuba in 1948. But with the signing of NAFTA that went into

effect on January 1, 1994, the notion of so-called globalization

emerged big time. NAFTA brought Mexico into the 1989 Canada-US Free

Trade Agreement as part of a radical experiment to merge three

disparate economies into a binding one-size-fits-all set of rules all

three had to abide by regardless of the effect on their people. To

sell it to each country's legislators and people, NAFTA's backers made

lofty pie-in-the-sky predictions of new jobs that " free trade " would

create. They never were nor was this a plan to do it. It was a scam to

outsource jobs and thus eliminate many others, enrich the

transnationals and make working people pick up the tab and take the pain.

 

NAFTA was just the beginning. It was planned as a stalking horse and

template for the World Trade Organization (WTO), that replaced the

GATT one year after NAFTA went into effect. The WTO along with an

alphabet soup of trade agreements (passed and wished for) like GATS

(covering all kinds of services), TRIPS (for intellectual property),

MAI (on investments and most all-encompassisng and dangerous one of

all if it ever passes even in separate pieces) and all the regional

agreements like CAFTA and FTAA are intended to establish a

supranational economic " constitution. " It's to be based on the rules

of trade the Global North nations want to craft that would override

the sovereignty of all WTO member nations. In other words, the plan

was and still is for the US primarily, along with the EU, Japan and

other dominant Global North countries to establish a binding set of

trade rules (a global constitution) they would write for their benefit

for an integrated world economy and then force all other nations to

abideby them. NAFTA, and what was to follow, were and are not intended

to create jobs and raise living standards in the participating

countries, despite all the hype saying they would and will. These

agreements are solely plans to benefit big corporations, legally

allowing them the right to dominate world markets, override national

sovereignty to do it, and exploit people everywhere for their gain.

Bottom line - these " agreements " mean big corporations win and people

everywhere lose.

 

So far the jury is very much out on whether the grand plan will

succeed as key countries in the Global South have caught on to the

scam and aren't buying it - Brazil, India, Venezuela, Argentina,

Bolivia and others. And China is big enough to be a club member, agree

to the rules, and then bend them at times to protect its own interests.

 

But if NAFTA was a template to disguise a WTO attempted world " hostile

takeover, " look at all the carnage it's created so far. Instead of

creating jobs in all three countries, it destroyed hundreds of

thousands of them. In the US alone it's responsible for the loss each

year of many thousands of high paying, good benefit manufacturing jobs

now exported to low wage countries like Mexico, China, India and many

others. And most of the workers losing them only are able to find

lower paying ones with fewer or no benefits if they can find any job

at all. This is an ongoing problem in good as well as poor economic

times and gets worse every year. It's also led many older workers, who

wish to work but can't find jobs, to drop out of the work force or

take lower paying part-time ones when they can find full-time ones.

 

The result has been a huge shift upward in income, wealth and power in

the US (and in Canada, Mexico and all other WTO member countries)

benefitting the business elites and corrupted politicians. And it's

cost working people billions of dollars, many thousands of good jobs

and a permanent drop in the average American worker's standard of

living. It's also created an enormous migration problem all over the

world comprised of desperate people looking for work because there's

none at home. I wrote at length about this in the US in my recent

article called The War on Immigrants. The problem gets worse every

year including in the US. And here a low unemployment rate hides the

fact that many workers have dropped out of the work force or must take

whatever part-time jobs they can find because they can't get full-time

ones as mentioned above.

 

I'm now working on a new article in which I discuss the view of some

US economists who explain that if the unemployment rate today was

calculated the same way it was during The Great Depression when it

rose to a peak of 25% of the working population, the true current

figure would be about 12% instead of the reported 4.7%. The current

calculation method includes part-time workers who work as little as

one hour during the reporting period. It also excludes discouraged

workers who wish to work but who've stopped looking because they can't

find jobs.

 

One might logically wonder why big US corporations run by smart people

wouldn't be trying to ameliorate this problem to build rather than

weaken the purchasing power of people in their home country - the ones

they need to buy their products and services. It's not just for their

obvious need to control or reduce costs to enhance profits. It's

because these companies are only nominally US ones. They may be

headquartered here, but they could as easily be home based anywhere.

The US may be their biggest market and most important source of

revenue and profit, but their operations and markets span the globe.

If they desired, they could pick up and leave and set up shop in

Timbuktu or Kathmandu. That's why they're called " transnationals. "

 

Once Our Government Protected Working People

 

At one time US governments had a social contract with its citizens,

imperfect as it was. Most governments in Western Europe still do,

although they're being weakened. But since the 1980s and especially

after the election of George W. Bush, that contract here is being

dissmantled, program by program, year after year with the ultimate

goal of making every one self-sufficient with little or no safety net

for protection. The most vulnerable poor are hurt most and their

numbers grow each year, but the middle class is suffering too as those

in it are declining as a percent of the total population. And the very

definition of a middle class is changing as the wealth gap keeps

widening between top and bottom along with the hollowing out of the

middle.

 

Bush and his cabal of acolytes are so intent on destroying the US

social contract with its citizens that their motto might as well be:

you can have anything you want - as long as you can afford to pay for

it. If not, you're on your own.

 

The Balance Sheet Documenting Corporate Gains

 

Worker loss has been corporations' gain - big time. In 2004 the

world's largest 500 corporations posted their highest ever revenues

and profits - an astonishing $14.9 trillion in revenue and $731.2

billion in profits. And top corporate officials, mainly in the US, are

raking it in, rewarding themselves with obscene amounts of salaries,

bonuses in the multi-millions and lucrative stock options worth even

more for many of them. That level of largesse is only possible at the

expense of working people here and everywhere. Oliver Stone may have

been thinking of them when he made his 1980s film, Wall Street. In it

was the memorable line spoken by the character portraying the

manipulative investor/deal-maker when he explained that " greed is good. "

 

Except for two brief and mild recessions, corporations in the US have

prospered since the 1980s in a very business-friendly environment

under both Democrats and Republicans. The result has been rising

profits to record levels, enhanced even more by generous corporate tax

cuts (and personal ones as well mostly for the rich), especially after

the election of George Bush. Under this president, one of their own in

the White House, US corporations have never had it better. It's been

so good that 82 of the largest 275 companies paid no federal income

tax in at least one year from 2001-2003 or got a refund; 28 of them

got tax rebates in all 3 of those years even though their combined

profits totaled $44.9 billion; 46 of them, earning $42.6 billion in

profits, paid no tax in 2003 and got $4.9 billion back in tax rebates.

And the average CEO pay for these 46 companies in 2004 was $12.6 million.

 

Along with big tax cuts and generous rebates, big corporations are on

the government dole big time in the form of subsidies, otherwise known

as " corporate welfare. " It's also known as socialism for the rich (and

capitalism for the rest of us). In 1997 the Fortune 500 companies got

$75 billion in " public aid " even though they earned record profits of

$325 billion. They got it in many forms - grants, contracts, loans and

loan guarantees and lots more. Today there are about 125 business

subsidy programs in the federal budget benefitting all major areas of

business.

 

Some examples of this government largesse include:

 

Selling the rights to billions of dollars of oil, gas, coal and other

mineral reserves at a small fraction of their market value.

 

The giveaway of the entire broadcast spectrum to the corporate media,

valued at $37 billion in 1989 dollars.

 

Charging mostly corporate ranchers (including big oil and insurance

companies) dirt cheap grazing rates on over 20 million acres of public

land.

 

Spending many billions of dollars on R & D and handing over the

results to corporations free of charge. " Big Pharma " is notorious for

letting government do their expensive research and then cashing in on

the results by soaking us with sky-high prices and rigging the game

with through WTO rules that get them exclusive patent rights for 20

years or longer when they're able to extend them through the courts.

 

Giving the nuclear industry over $100 billion in handouts since its

inception and guaranteeing government protection to pick up the cost

in case of any serious accidents that otherwise might cost the company

affected billions and possibly bankrupt it.

 

Giving corporate agribusiness producers many billions in annual subsidies.

 

You and I, the individual taxpayers, pay the bill for this generosity.

But we actually pay these corporations twice - first through our taxes

and then for the cost of their products and services. And they don't

even thank us.

 

The Biggest Recipient of Government Handouts

 

In the old game of " guns vs. butter " , guess who wins? Clue - they have

shareholders, and their chiefs are called CEOs. Guess who loses? You

know that answer chapter and verse by now.

 

The Wall Street film character who explained that greed is good might

have added war is even better. Call it greed made easy or without even

trying. Since WW II the Pentagon and military-industrial complex have

always been at the head of the handout queue to get their king-sized

pound of flesh in appropriations. The amounts gotten varied in times

of war and peace or with the whims or chutzpah of a sitting president,

but they're always big. The Pentagon, defense contractors and all the

other many and varied thousands of parasitical corporations servicing

the defense industry are umbilically linked. All these corporations

profit handsomely in our military-industrialized society that takes

our tax dollars and hands them over to them by the hundreds of

billions annually. Their gain is the public's loss. If the process

were audible we'd be able to hear a " giant sucking sound " of public

resources wooshing from our pockets to theirs. It's also the sound of

our lifeblood being sucked away as we have to pic up the tab and give

up our social benefits as well.

 

Once the cold war ended after the Berlin wall came down and the Soviet

Union became 15 independent republics, there was some hope for a peace

dividend - meaning less for the military and more social spending.

That wasn't what the first Bush administration and Pentagon had in

mind as they frantically searched for and easily found new potential

enemies as a way to make the case for continued militarized state

capitalism. Our language manipulation experts came up with and sold to

the Congress and public the threat of " growing technological

sophistication of Third World conflicts " which " will place serious

demands on our forces " and " continue to threaten US interests, " even

without " the backdrop of superpower competition. " Our defense strategy

would thus be based on maintaining global " stability " (more code

language meaning assuring obedience to US dominance).

 

In the 1990 National Security Strategy, the Pentagon presented its

defense budget to the Congress using the above stated pretext to

justify what they wanted. It called for strengthening " the defense

industrial base " (code language for the high-tech industry in all its

forms) through generous subsidies as incentives " to invest in new

facilities and equipment as well as in research and development. " They

got what they wanted, and it set off the high tech stock market boom

that lasted until the speculative bubble burst in March, 2000 when the

economy slowed and slipped into recession. Three years later in a post

9/11 environment, the economy was again growing as was annual defense

spending, and the stock market began another ascent that's so far

continuing.

 

The many corporations now benefitting from Pentagon largesse are so

addicted to it that they become the main promoters of and cheerleaders

for conflicts or preparations for them because they guarantee bigger

handouts that are so good for business. It's a dirty business, but

isn't that the fundamental predatory nature of large-scale capitalism

that relies on a state policy of imperialism to thrive and prosper.

Senator Henry Cabot Lodge explained it in 1895, in an unguarded

moment, when he said " commerce follows the flag. " He might have added

that the flag also follows commerce. The great political economist

Harry Magdoff, who died this year on New Year's day, also explained it

well in his 1969 book The Age of Imperialism when he wrote:

" Imperialism is not a matter of choice for a capitalist society; it is

the way of life of such a society. " And historian Henry Steele

Commager wrote about how a national security police state and its

bureaucracy lends its great talents and resources " not to devising

ways f reducing tensions and avoiding war, but to ways of exacerbating

tensions and preparing for war. " I guess the conclusion is that in a

capitalist society dominated by big business this " bad seed " must be

in our DNA and we can't help ourselves as a result. In another article

I'm working on I refer to our addiction to war. So far we haven't

found an effective antidote.

 

The reason, of course, is because war is so good for business. In the

last 6 years alone, and especially since 9/11, along with all their

other largesse and waste, the Pentagon outsourced on average $150

billion a year in work to corporations. Almost half of it was in

no-bid contracts and three fourths of that was to the five largest

defense contractors headed by Lockheed Martin and Boing. L-M is the

undisputed king of contractors. They literally run the enterprise of

empire from the inside and out. They're not only its biggest

beneficiary, they also help shape the policy guaranteeing it - to the

tune of $65 million every day (from our pockets into theirs). And they

collect their loot even when their killing machines don't work right.

 

Then, of course, there's Halliburton and Bechtel. They're always big

time winners in the handout sweepstakes. These two well-connected

companies have been at the head of the queue in the looting of Iraq

and the US Treasury. They've gotten huge no-bid contracts worth many

billions which they then freely supplemented with gross (read:

criminal) overcharges and gotten away with most of it. And we can't

ignore the notorious Carlyle Group, the nation's largest privately

held defense contractor with the tightest of ties right to the Oval

Office. They practically sit in the traditional Kittinger chair there,

or whatever other brand George Bush may prefer. His father, and former

president, of course, is on their team (and payroll), and they use him

as needed as their main " door-opener " and " wheel-greaser " (especially

in the lucrative Middle East). And the old man reportedly earns a

hefty half million dollars for every speech he makes on behalf of his

generous employer. At that pay scale he must be hard-presed to keep

his mouth shut.

 

Guess How Big Funding National Defense Really Is

 

The Center for Defense Information reported that since 1945 over $21

trillion in constant dollars has been spent on the military. And it's

been done largely to benefit US corporations even though the country

had no real enemies all through those years - except for the ones we

attacked with no provocation or invented to scare the public so they'd

buy into the scam that we needed industrial strength military spending

for national security. Ronald Reagan was very adept at scare tactics

and duping the public. He fathered the Contra wars in the 80s in

Nicaragua and scared half the public into believing the ruling

Sandinista government was a threat to invade Texas and threaten the

whole country. He tried and failed to get Mexican president Miguel de

la Madrid to go along with him. The Mexican president said if he did

70 million Mexicans would die laughing. It's hard to believe the US

public could ever fall for a threat about as great as I'd be (all 120

lbs. of me) in the ring against Mike Tyson in his prime But although

there was none and the nation was at peace during his tenure, Reagan

expanded the military budget by 43% over what it was at the height of

the Vietnam war (and ran up huge budget deficits doing it). The public

suffered for it with the loss of social benefits, but business loved

it and him, and the stock market took off on an 18 year bull run.

 

But after the 9/11 attack, the floodgates really opened wide. In

fiscal year 2000 the military budget was $289 billion, but up it went

steadily after that reaching $442 billion in 2006 and currently is

requested to increase to $463 or higher in 2007. Add to that over $41

billion for Homeland Security in 2006 (another public rip-off as part

of a move toward a full-blown national security police state) and

annual multi-billions in funding off the books for the Iraq and

Afghanistan wars that in fiscal 2006 alone amounts to about $120

billion now and may increase. Add it up and the current budget for the

military, 2 wars off the books and Homeland Security, and it comes to

over $600 billion this year. That kind of spending, with billions more

available at the drop of an add-on presidential emergency request

gives a whole new meaning to the term " war profiteer. " And while the

big defense contractors reap the biggest benefits, many thousands of

US corporations are in on the take as the Pentagon is a big buyerof

everything from expensive R & D and high tech weapons to breakfast

cereals and toilet paper. Using the false Bush slogan about leaving no

child behind for his failed education program, the Pentagon for sure

leaves no corporation behind in its generosity. Corporations wanting a

piece of the action need only remember and abide by the scriptural

message from John 16:24: " ask and you shall receive. " And probably a

lot as the Pentagon is notorious about being sloppy, " spilling " more

than many good sized corporations earn.

 

Here's the 2 key questions to ask. Does anyone feel safer, and who'll

pick up the tab? If you hadn't noticed, you, the average worker,

didn't share in those big tax cuts, your income is losing the war to

inflation, your benefits are eroding, and someone some day has to pay

that $8.275 trillion national debt that keeps rising $2.2 billion

every day. And along with that burden, we've never been less safe, and

we, the public, have to pay the bill because corporate America never

does. They're in another queue for more tax cuts, and we'll see more

social benefits cut to pay for them too. In the political game of

musical chairs, corporations get them all every time, and John Q.

Public is always left standing (out in the cold).

 

How Did We Get Into this Mess,

and How Can We Get Out of It

 

I've already explained what happened. As to how, it's because we let

them. They delivered the message, and we bought it like lambs led to

the slaughter or believing the " foxes " were really " guarding " us. Back

in school we all learned and sang those lovely lyrics that began " Oh

beautiful for spacious skies, For amber waves of grain. " We believed

it and most of us in our stupor still do. It's long past time we

realized it was just a song intended to lull us into complacency to

accept the message and go along with it. It was a false message,

although there is an America the Beautiful, but only for the

privileged few and no one else. And every year it gets worse - a race

to the bottom with no end in sight until we either get there or wake

up in time and do something about it. Unless we act to cauterize our

collective wounds we'll never begin the healing process; in fact,

we'll bleed to death. We have to find a way to reclaim the democracy

we're always being reminded we have, but don't. If we reall had it,

they'd never have to remind us about it.

 

People Power Is How We Get Out of It

 

It's not too late to turn it around - yet. And it's simple to know

what we need to do but always hard knowing how to go about it - take

to the streets, throw the bums out (we've tried that one before and

only put in new bums). Anyone have some good suggestions? I don't have

sure-fire ones, but I've got a piece of good wisdom based on the past

and the present. History shows that when things get bad enough people

first stir and then react. If nothing changes and the pain gets bad

enough, then at some point down go the barricades, and people power

steps into the breach. The many always win out over the few when

they're fully committed to do it. I " ve quoted famed Chicago community

activist Sol Linowitz before who understood it and once said " the way

to beat organized money is with organized people. " Three recent and

current examples make the point and show us how.

 

All over France for two months up until April, millions of angry young

people and union members mainly engaged in strikes, sit-ins and mass

street protests to demand the revocation of the new First Employment

Contract (CPE) for workers under 26 years of age. French youth refused

to become what they called " a Kleenex generation " - to be used and

thrown away at the whim of employers who want the " flexibility " to do

it. The law was based on the insane notion that indiscriminate firing

was a way to create more jobs and reduce unemployment. If it had gone

into affect, it would have given employers the right to hire young

workers on a two year trial basis and fire them at will at any time

during that period. The protesters understood the sham and how it

would hurt them and stayed out long enough to get the Chirac

government to back down and effectively cancel this outrageous law.

 

A second example is now happening on the streets in Nepal as many

thousands of people from all walks of life including professionals

have been protesting since early April in a mass civil uprising

against King Gyanendra demanding an end to autocratic monarchal rule

and the restoration of democracy. At this writing they still don't

have it, but the king was forced to go on national television and

promise to meet their demands. At this writing the protests are

continuing, and the people so far are unsatisfied with what their king

has told them.

 

The third example has been happening here in the US as millions of

immigrants and working people of all races have taken to the streets

in cities all over the country. They've seen their rights denied or

threatened, their jobs exported, unions weakened or destroyed, wages

stagnated and essential benefits reduced, lost or never gotten. Their

protests are continuing, and they demand equity and justice. Congress

has already taken note and softened some of their hostile

anti-immigrant rhetoric. But it remains to be seen how this will turn

out. The Congress will resume its immigration legislation debate in

its post Easter break session with a final resolution now unclear.

What is clear is that if a final bill emerges it will be less harsh

than the original House version that passed and the Senate one still

being debated prior to and during the mass protests.

 

The lesson is clear. Mass people actions, if large and strong enough,

get results. Lots of great thinkers through the years knew this and

said it many different ways. I quote some of them often for

inspiration, and I'll end by doing it again - 2 jewels from one of my

favorites - the Mahatma. Ghandi wisely observed that " even the most

powerful cannot rule without the cooperation of the ruled. " He proved

it. He also famously said - " First they ignore you, then they laugh at

you, then they fight you, then you win. " He proved that too.

 

Anyone ready for a fight? I hope you are, and if so, you and we too

can win. And just in case I need to remind you what you're fighting

for, it's for your future, the kind your parents hopefully had, the

kind you want for your children, the kind where you know you live in a

country with a real democratically elected government that works for

all the people and one where there's equity and justice for everyone,

not just for the privileged the way it is today. It's also to save the

republic and reverse the present course we're now on that may destroy

it. Think about it, and start fighting for it. Your future depends on it.

 

Stephen Lendman lives in Chicago and can be reached at

lendmanstephen.

 

Also visit his blog address at sjlendman.blogspot.com.