Category Archives: Corporations

Egypt’s Morsi = America’s GOP

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When asked to explain the removal of President Mohamed Morsi, Egyptian leaders said that Morsi had offered no plan; no vision to solve the nation’s problems. Instead, he focused on consolidating the power of the Muslim Brotherhood and instituting Sharia law.

In many ways, his actions paralleled those of the GOP in the US.

Like Egypt, we have millions of unemployed. We have tens of thousands of recent college graduates with no jobs; not even any prospects of jobs. We have millions who, despite working full-time jobs, live in poverty. Our infrastructure is crumbling around us.

So how are Congressional Republicans dealing with these problems?

Like the Muslim Brotherhood, they are focused on consolidating power. In Republican-controlled states, they are gerrymandering Congressional districts to ensure their re-election. They are pushing through laws to limit the voting rights of minorities. And they are instituting their own form of repressive, antiquated laws to control women’s bodies; to control who may marry; to pick economic winners and losers.

The GOP has offered no legislation to address our growing number of problems. No jobs bills. No plan to rebuild infrastructure. No plan to help workers earn a living wage. No plan to break up our growing number of monopolies. No plan to deal with climate change. No plan to control healthcare costs. No plan to take the corruption out of politics.

The GOP’s only vision is to obstruct the plans of President Obama. If anything, that makes them worse than Morsi’s Muslim Brotherhood.

Abolish The IRS?

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Tea Party favorite, Sen. Rand Paul, is featured in a TV commercial calling for viewers to sign a petition to abolish the IRS. Paul and his fellow Tea Party parasites are capitalizing on what they falsely call an unconstitutional attack on conservatives to get what they really want…a flat tax.

The flat tax is a horrible idea that has long been pushed by the wealthy and conservatives. It doesn’t sound bad; you just total up the income you received for the year and pay a flat percentage of that income. No accountants or tax preparers needed. But since everyone would pay the same percentage, the flat tax would be a huge victory for the wealthy and an unprecedented attack on the poor.

The very conservative Heritage Foundation recommends that the tax rate be set at 28 percent. It would eliminate payroll taxes, estate taxes, excise taxes and taxes on savings. It would give a modest tax credit to the poor. The only other tax deductions would be for higher education, gifts and charitable deductions.

Of course, the poor and modest income households don’t make enough to have savings. So eliminating a tax on savings only benefits the wealthy. Likewise, only the wealthy would benefit from eliminating estate taxes. The wealthy would certainly benefit the most from the charitable deductions. And since the top marginal tax rate is now 39.6 percent, the flat tax would give those making $400,000 and up a tax cut of 11.6 percent!

The real effect of the flat tax proposal would be to dramatically cut taxes for the wealthy and raise taxes on those who can least afford it.

The flat tax is just another Trojan horse concocted by conservatives to benefit their wealthy masters. It would move even more of the tax burden onto the middle class and make the plight of the poor utterly hopeless. A better idea is to rid our current tax code of the deductions, tax shelters and subsidies created by conservative politicians to help their campaign contributors avoid paying their fair share of taxes.

A flat tax will simply help them avoid taxes altogether.

Since no one actually likes paying taxes, the IRS has few friends. Yet, without the IRS, who would track down the thousands of tax cheats? With no enforcement, thousands more would be encouraged to avoid paying taxes. And, though a flat tax may sound like a good idea, if it ever happens, the American dream will become a nightmare for all but a very few.

What’s Wrong With The US? Connect The Dots.

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It’s probably self-evident, but our government is no longer of the people, by the people and for the people. A more accurate description would be of the corporations, by the corporations and for the corporations.

But how did we get here? How have a few powerful multinationals and one percent of the population usurped power from the vast majority of the people? In order to fully understand this, all you need to do is connect the dots.

  • We have allowed a few large corporations to create virtual monopolies, often with the help of government subsidies. These corporations buy out, squeeze out and drive out small businesses.
  • The CEOs of these corporations sit on each others’ Boards and approve each others’ compensations.
  • A portion of CEO compensation is based on the companies’ productivity and share price. That means the CEOs strive to cut costs (employee benefits and salaries) while increasing the price of products and services.
  • Once corporations achieve maximum productivity and profit with US employees, they are encouraged to offshore jobs in order to further reduce labor costs and employee benefits.
  • As corporations expand around the world, it becomes easier to stash profits offshore in order to reduce their tax burden and further increase profits.
  • These increased profits and compensation allow corporations to “invest” millions in the political campaigns of those who will support corporate interests.
  • The campaign contributions by corporations and corporate leaders leads to a massive increase in the cost of running for office, driving away those who might represent ordinary working people.
  • Corporate-financed Political Action Groups and associations, such as the US Chamber of Commerce spend additional millions to support corporate-friendly candidates.
  • Once the corporate-friendly candidates are sworn into office, they pass legislation that benefits their contributors.
  • Corporations and industries finance large lobbying efforts to further impact legislation resulting in large government contracts and subsidies.
  • Eventually, the corporate-friendly politicians nominate and approve judicial appointments that make the courts more friendly to corporate interests (see Citizens United v FEC, Buckley v Valeo and Bowman v Monsanto).
  • Politicians, with help from the courts (see Shelby County v Holder), undermine the voting rights of minorities and others who oppose them. At the same time, they wage war against the poor by cutting education, unemployment benefits and food stamps. They allow corporations to steal their savings, even their homes without repercussions.

We can take back our government, but it won’t be easy. It starts with election finance reform that takes the massive amounts of money out of political campaigns. It ends with politicians who, in the interests of ordinary people, are willing to break up “too big to fail” corporations as President Theodore Roosevelt once did.

What Egypt Reveals About US Foreign Policy.

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In one of the most ironic foreign policy twists of all time, Egyptian journalists are reporting that a majority of Egyptians now link the US with the Muslim Brotherhood and deposed President Mohamed Morsi.

No, it’s not because President Obama is the socialist Muslim Teapublicans think him to be. The reality is much less interesting. It stems from our undying belief in democracy, and the fact that Americans equate democracy with freedom. But, as we’re learning, democracy does not always lead to freedom, and it doesn’t always represent the will of the people.

Egypt is a great case in point.

When Morsi was elected president, it had less to do with his vision for the future of Egypt than the fact that his Freedom and Justice Party representing the Muslim Brotherhood was more organized and more powerful than the opposition parties. After all, political parties had not previously played a large role in Egyptian government because Egypt had never before held democratic elections. Nevertheless, the US felt it necessary to embrace Morsi after he won election.

Once Morsi gained power, he ignored the economic issues of poverty and joblessness that led to the overthrow of Hosni Mubarak. Instead, Morsi focused on consolidating power in order to ensure that Freedom and Justice Party candidates could not be defeated in future elections. He also took steps to replace the current legal system with Islamic law.

To that end, Morsi reinstated the Islamist-dominated parliament that was disbanded by the Supreme Constitutional Court. He then ordered the return of legislators elected a year earlier, a majority of whom are members of his own party or other Islamist groups. Morsi objected to a constitutional provision that would limit his presidential power and announced that any constitutional amendments restricting the president’s powers would be annulled. And late last year, he issued a declaration purporting to protect the work of the assembly convened to draft a new constitution from judicial interference. But, in effect, that declaration immunized his actions from any legal challenge.

By this time, most Egyptians had had enough. But the Obama administration, like so many of the administrations before it, felt it had little choice but to continue to support a democratically-elected president. So we continued to provide billions of military aid to Egypt.

Now the US is left in a very awkward position.

US law dictates that we cut off military aid to any nation that removes a democratically-elected leader through a military coup. Yet one can easily argue that the Egyptian military was directed by the will of the people. And if we do cut off military aid, we risk alienating the military leaders, the most powerful political force in Egypt. Furthermore, it would lend more credence to the notion that we support the Muslim Brotherhood over the will of the people.

We likely wouldn’t be in this dilemma if our foreign policy put more emphasis on humanitarian aid versus military aid. For decades, we have continued Cold War policies of providing weapons to nations (including those run by brutal dictators) that support our corporate…er…national interests. At the same time, we have tended to ignore the health and welfare of ordinary people.

The resulting void is too often filled by terrorists and militant organizations.

Such organizations have endeared themselves to ordinary citizens by building schools, mosques, water treatment plants, medical facilities and other things that directly benefit a majority of the people. That helps them more easily recruit members and enables them to draw a stark contrast with the US. And when these nations inevitably erupt in political turmoil, our own weapons are often turned against us.

Why do we continue such bone-headed foreign policies? In a word, money. Selling weapons to governments that support our multinational corporations is very profitable for our military-industrial complex. Building infrastructure and creating jobs…not so much. Moreover, economic disparity and poverty provide a ready source of cheap labor for multinational corporations in search of places to send our manufacturing jobs.

What Happened To Creativity?

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After the conclusion of the past TV season and viewing the latest sample of so-called blockbuster (emphasis on bust) movies, I must conclude that creativity in the US is either dead or on life support.

As a former advertising creative director, for the first time since the early 1960’s, I ignore most of the commercials. It seems that most US commercials are bland compared to their international counterparts. It’s not for lack of budget. Large US advertisers are literally throwing money at production and getting little in return. That’s because the ideas are mostly formulaic and stunted by research.

Much of the TV programming is worse than the advertising. Except for HBO, “Reality” TV has replaced comedy and drama. We have Survivor, Big Brother, Storage Wars, Swamp People, Here Comes Honey Boo Boo, The Apprentice, The Amazing Race…ad nauseum. Unfortunately, there appears to be no end in sight for the dumbing down of American TV (hard to imagine it could get worse that the vast wasteland of the 60’s and 70’s). Because reality TV is cheap to produce, some industry insiders are predicting the end of scripted television.

Our movies are no better. Hollywood has abandoned stories in favor of bombastic production. Most of the movies are devoted to disasters of one kind of another. Those that aren’t, are remakes of old classics. The reason?  Lynda Obst, in her book Sleepless in Hollywood, argues that the movie industry is driven by foreign demand. She says that foreign movie sales now account for 80 percent of all movie income; that movies with complex stories relying on dialogue simply don’t draw movie audiences in Europe and Asia. As a result, American movie-goers are forced to suffer through movies that are long on action and short on story. Of course, that fits into the video game psyche of American youth.

To my mind, these industries are only indicators of a distressing lack of creativity throughout the US. More and more, we’re falling behind other nations when it comes to creativity and invention. Now that the hedonistic yuppies of the 80’s are running our corporations, we’re good at making money. But not much else.

Hedge fun managers are creative in finding new ways to rip off unsuspecting investors. Mortgage lenders are creative in finding ways to foreclose on homes. Multinational corporations are creative in avoiding taxes, increasing productivity while cutting costs, and socializing their financial losses.

I believe the US won’t reclaim its leadership role until we, once again, value products, design and people over profits; creativity over productivity; customer service over sales; and craftsmanship over cost-cutting.

Until then, we can watch our nation’s demise on our screens in 3D and HD.

The War Within.

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During the Cold War of the 1950’s, 60’s, 70’s and 80’s, the US and Soviet Union armed proxy nations with the world’s most sophisticated weapons. It was good business for the defense industries of both participants. And when the proxy nations went to war with one another, business got even better.

Now we’re seeing a similar phenomenon within the US.

Arms makers such as Glock, Sturm-Ruger, Smith & Wesson and Winchester continue to design and produce increasingly more lethal weapons. Thanks to the NRA, semi-automatic handguns, tactical shotguns and assault rifles are readily available to all Americans…criminals and the mentally unstable included. These weapons are aggressively marketed through dozens of magazines, TV networks and action movies.

The gun makers even promote guns that are currently banned in the US. Ads for semi-automatic weapons are placed directly across from ads offering kits to convert the semi-automatics into illegal, fully-automatic weapons. (Of course small type in the ads note that the conversion of guns is illegal.)

But that’s not the height of the cynicism of these murder-for-sale businesses.

In addition to marketing weapons to the criminal element, the weapons industry markets even more lethal weapons (including tanks) to police and security forces. That way, they profit from both sides in an ever-escalating war of lethality. The criminally insane obtain more and better weapons. Then the police increase their armaments. And so it goes.

I’m reminded of the game played by the manufacturers of radar guns for police. Once they had upgraded the majority of police departments to the latest technology, they began selling radar detectors to help motorists avoid speeding tickets. Then they introduced improved technology for the police.

The only ones to benefit from such policies are the manufacturers.

A Healthcare System Only The Mafia Could Love.

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Actually, I should offer my apologies to the Mafia.  Because not even the Mafia could create such a blatantly expensive and inefficient system as the one we have in the US. In fact, when Singapore recently decided to create a national healthcare system, they first looked to the US…in order to learn what NOT to do.

We spend $2.7 trillion a year on healthcare with astoundingly poor results. Per capita, we spend more than double that of other any other advanced nation. We also spend $300 billion on pharmaceuticals…nearly double the amount spent by the the rest of the world combined!

The ugly truth is that Americans are addicted to pharmaceuticals. But we’re certainly not addicted to health. We overeat. We eat all of the wrong foods. We refuse to exercise. And we lead overly stressful lives. As a result, we die sooner…our lifespan ranks just 50th in the world!

Not surprisingly, most medical schools don’t teach nutrition, and most don’t offer courses on pharmaceuticals. (They rely on the pharmaceutical manufacturers to teach doctors after they begin practice.)

Our doctors and clinics are paid for the number of patients they see and the number of procedures they perform. Because of the cost, many Americans, especially those who lack insurance, delay going to the doctor until they can put it off no longer. They then go to hospital Emergency Rooms…the most expensive providers of healthcare. That causes healthcare costs to rise for those who do have insurance.

Many doctors hate our healthcare system. Many nurses and other medical workers hate our system. Many medical clinics hate our system. And many hospitals hate our system. If that’s true, then why doesn’t the system change? The answer is simple: Health insurers, medical equipment providers and pharmaceutical manufacturers are making billions at our expense.

Their greed is bankrupting Medicare and Medicaid, not to mention the thousands of Americans who have been forced into bankruptcy as the result of medical emergencies. The Patient Protection and Affordable Care Act will have some effect on our staggering healthcare costs. It will also add 30 million uninsured patients into the system, so it will improve the overall health of our nation.  But these new patients will help to further line the pockets of insurers and pharmaceutical companies.

Not satisfied with their spectacular profits, the health insurance and pharmaceutical industries are spending millions on congressional lobbyists to squeeze even more money out of the system.

The only way to stop the corporate profiteering, to cut costs and to improve healthcare is by creating some form of a single payer system similar to those in Canada, England, France, and most of the civilized world.

The Dismal State Of Our Union.

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Upon listening to the last day of Neal Conan’s Talk of the Nation on NPR, I was surprised by Ted Koppel’s response when asked about the future. Turns out, Koppel shares many of the same concerns as I do. For what it’s worth, here is a compilation of my own views of the current state of our union and its future.

Civil Rights – How depressing that people are still struggling for civil rights nearly 150 years after the end of slavery! The Supreme Court ruling on the Voting Rights Act was a huge setback, unleashing red states to suppress minority votes.

Abortion – Although abortion was made legal in 1973, women are still fighting to wrest control of their own bodies from the old men who control our political system. Amazingly, women are now forced to fight for access to contraception!

Environment – Most Americans say they’re concerned about our environment. They just don’t act like it. Most refuse to sacrifice anything on behalf of our planet’s future.

Hunger – In the richest nation on Earth, 50 million people are unsure of where they’ll get their next meal. That includes 17 million American children!

Energy – Nearly 40 years after President Carter had solar panels installed on the White House, we’re still addicted to fossil fuels. We spill more oil than most other countries use.

Healthcare  – The dirty secret is that we have no healthcare system. We spend more than twice as much as other advanced nations, yet achieve worse outcomes. And we spend more on pharmaceuticals than the rest of the world combined.

Wall Street – Greed has turned large banks into high stakes casinos. Their gambling habit not only cost individuals and pension plans trillions…many families lost their homes. Yet any attempt to regulate these banks has been undermined by millions in lobbying efforts.

Income Disparity – The US ranks among the world’s worst nations for income inequality. 400 Americans control more wealth than half of our population, and the gap is growing. Yet Republicans believe that 47 percent are sponging off the rest!

Jobs – Simply put, we don’t have enough of them. And far too few of them pay enough to support a family. Corporate leaders and politicians, on the other hand, each make enough to support dozens of families.

Privatization – We’ve privatized prisons, prison healthcare, schools, our military, even our intelligence efforts. Although all of these efforts have proven to cost more than publicly run institutions, Republicans are pushing for even more privatization.

Pensions – We lost tens of thousands of employee pensions over the past 40 years, replaced by IRAs and 401Ks which were originally intended to supplement defined benefit pension plans. The money once used for employee benefits now lines the pockets of CEOs, executives and investors.

Politics – Our politics have continued to move to the right, even though our population hasn’t. When Republicans are in control, they unabashedly cram through partisan legislation. When Democrats are in control, they tentatively nibble around the margins instead of doing what they were elected to do. Both parties rely on large corporations to finance their political campaigns.

Tea Party – This is a relatively small group that has had a large impact. Based on lies and meanness, it seems its goal is to take us back to the 16th Century.

Surveillance – Following 9/11, we traded privacy for increased security. The NSA tracks records of our phone calls, search engine terms and emails. Banks and credit card companies track our purchases. And surveillance cameras are everywhere.

Guns – While the NRA works to increase the availability of guns, even for criminals and the mentally ill, manufacturers make guns ever more lethal.

Education – Thanks to conservatives, public education is underfunded and teachers are woefully underpaid. Enough said.

Science – Many now claim that evolution is merely a theory. But so is gravity! Of course, these people also deny man’s affect on climate change. (See education.)

Religious Intolerance – Islam is not the only religion with extremists. The intolerance of all religions seems to be growing.

Anger and Pettiness – Within 20 years of the end of the Fairness Doctrine, 91 percent of talk radio was conservative…mean, angry, venomous Rush Limbaugh-style conservative… and it’s getting worse. (See Tea Party)

War – There’s no denying it. The US absolutely LOVES war. We glorify soldiers and their war machines with military-style ceremonies and flyovers at nearly every large event. And we spend hundreds of billions on “defense” to build bigger, badder war toys.

Iraq – Iraq cost us trillions of dollars and thousands of lives. The result of our sacrifices is that we have turned Iraq into a vassal state of radical Iran.

Afghanistan – Despite setting a deadline for withdrawal, there is no clear outcome for this war. We may leave the country no better off than it was when we arrived.

Syria – Yet another opportunity to dive into a war with no real reason or plan. But it is a war and some of our politicians don’t want to be left out.

War on Drugs – This “war” may have ruined more lives than the drugs themselves. It disproportionately affects minorities, filling our prisons to overflowing. Indeed, we have a larger prison population than any other nation.

Militarization of Police – As our soldiers return from war, they’re increasingly hired by police departments. As a result, police become ever more militarized…with assault weapons and assault vehicles…and further removed from ordinary citizens.

Journalism – In the 1980’s, TV networks began measuring the success of their news organizations by ratings which instantly sensationalized the news and created the “sound bite.”  Worse, most news groups have lost their independence as they were gobbled up by conglomerates.

With all this, it’s difficult to be optimistic about the future, but the pendulum may soon swing the other way. I hope so.

Visit To The Border Exposes The Complexity Of Immigration.

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My wife and I recently traveled to the border town of Douglas, Arizona. Along the way, we passed dozens of Border Patrol pickup trucks and two checkpoints. Upon arriving in Douglas, we were greeted by an imposing wall stretching along the border and a town in visible decay.

You see, Douglas was once a shopping destination for Mexican families. Many drove for miles to purchase items that were difficult to find or too expensive in their own country. Many walked across the border to work. Families lived on both sides of the border. All of this is readily confirmed with a quick glance at many of the business signs, which are in Spanish. Not English. After all, this land was owned by Mexico long before it was transferred to the United States.

Unfortunately, much of that cross-border commerce seems to have come to an end. Many of the storefronts are empty and many buildings are boarded up. It is now much more difficult to cross the border and there are far too many incidents in which Mexican citizens have been detained or threatened. It appears that many Americans have also avoided the area.

These are just a few of the consequences of our failed immigration policy.

Other consequences include the blight of our modern day “Great Wall” or “Iron Curtain.” It’s nearly as expensive and no more successful. The wall has reduced the number of migrants crossing the border illegally. And it has blocked the traditional migratory patterns of wildlife, maybe speeding some desert animals on their way to extinction. But it hasn’t stopped the traffic of illegal drugs. It has simply funneled them into a concentrated area which has posed a danger to ranchers and other residents in the area on both sides of the border.

This is no way to deal with immigration.

If we’re to get a handle on the issue, we must pass legislation that creates work permits. We must create an effective national ID system. We must make it easy for businesses to verify workers before hiring them, and we must make it easy to prosecute businesses who hire undocumented workers. We must create a path to citizenship for those who are already here, especially the “dreamers” (those who were brought here at an early age by their parents). And we must stop our large agribusiness corporations from dumping subsidized corn into Mexico and Central America, making it impossible for small farmers to make a living and forcing them to seek employment elsewhere.

Perhaps, most important, we should decriminalize drugs and make them available with a prescription from pharmacies. That would take the profit out of the illegal drug trade and force the drug cartels to find a new occupation. It would depopulate many of our prisons, saving billions in taxes. It would also eliminate the need for “users” to deal with criminals and to commit crimes in order to purchase their drugs.

Well, I can dream, can’t I?

Organized Bank Crimes.

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After an ill-advised investment in grain futures in the late 80’s, I became more convinced than ever before that small investors are at the mercy of large investors. Not just in commodities, but in other markets as well. If your timing happens to coincide with that of the large corporations and the wealthy, you profit. If not, they take your money.

In other words, all markets are inherently rigged. Because large corporations and the wealthy gamble such large amounts of money, they control the price of commodities and securities.

We’ve seen this play out in a variety of ways since 1999. That was the year President Clinton caved to the big money lobby (reported to have spent $300 million over 25 years) and a Republican-controlled Congress by signing a bill that repealed the Glass-Steagall Act. According to the likes of former Fed Chairman Alan Greenspan, former Senator Phil Gramm and former Treasury Secretary Robert Rubin, repealing the law would “free” Wall Street from onerous regulation so the banks could “innovate” and grow.

A year later, Clinton signed another such onerous bill, The Commodity Futures Modernization Act of 2000. Ironically, that was also the year of the dot.com crash.

Our financial markets have taken us on a frightening roller coaster ride ever since.

In my opinion, these bills turned financial markets into international high stakes casinos with a variety of complex games that allow the house and the big players to constantly adjust the rules in order to skim more money from suckers like us.

We’ve seen the big players run up the price of commodities, such as gold and oil, at the expense of ordinary citizens. We’ve seen them pump up the real estate market with subprime mortgages designed to fail. When the inevitable happened, the institutions holding those mortgages were bailed out by taxpayers. They then stepped in and snapped up foreclosed homes at a fraction of their actual value. These events also resulted in the loss of trillions by pension plans and the holders of 401ks.

So, thanks to the gambling of financial institutions, millions of ordinary citizens lost their homes and their financial futures at the same time.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was designed to protect us from such risky and unethical behavior by financial institutions. Signed into law in 2010, Teapublicans have not allowed the act to be fully implemented. Even worse, they are working on behalf of their Wall Street benefactors to dismantle the bill. Even some freshmen Democrats seem to have fallen under the spell of Wall Street and the promise of campaign contributions. They recently voted for a bill written almost entirely by the banksters’ lobbyists that would water down Dodd-Frank.

For their part, financial institutions seem totally unphased by any regulations. In the past year, we learned that financial institutions manipulated LIBOR (London Interbank Offered Rate) the benchmark interest rate that determines the international cost of borrowing. After stealing billions, a handful of the big banks involved in the scandal have paid fines that amount to a stern slap on the wrist. Of course, such penalties only encourage financial traders to continue their games.

Now we’re learning of yet another rigged game – the currency market (aka the Foreign Exchange market). According to a Bloomberg report, “traders at banks around the world have regularly worked together for ‘at least a decade’ to move a key benchmark currency rate in ways that profit them and hurt their clients.”

It seems the old adage that “it takes money to make money” has never been more appropriate.