Category Archives: Corporations

Liberal media bias?

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Since the days of Richard Nixon and Spiro Agnew, conservatives have been fond of blaming MSM (mainstream media) for interfering with their agenda.   They contend that most news outlets are run by liberals and therefore biased against conservatives. 

Really? 

The vast majority of media outlets are owned by just five conglomerates (CBS, Disney, General Electric, News Corp, and TimeWarner).  Who do we have to thank for the ever-shrinking number of media owners?  Well, conservatives of course. 

For example, during the Reagan administration, Congress passed the Cable Communications Policy Act of 1984 which deregulated cable TV rates.  As a result, cable rates skyrocketed 25-30 percent through 1986-1988.  Then, following the Newt Gingrich-led Republican Revolution, Congress passed the Telecommunications Act of 1996.  Conservatives sold the bill as a way to increase competition and lower consumer costs (Does that sound familiar?).  But like most Republican legislation, the Telecommunications Act of 1996 did the exact opposite.   Following its passage, cable TV rates have jumped more than 40 percent and the number of cable system owners dropped dramatically. 

Prior to deregulation, there were thousands of cable systems.  Today, five corporations (Comcast, TimeWarner, Cox, Charter and Cablevision control the lion’s share of the market – more than 50 million households.   In addition, two companies (DirecTV and Dish) control satellite TV serving than 31 million households, three media giants own all of the cable news networks, five corporations dominate Internet news, and one corporation (Clear Channel) owns 900 radio stations. 

Such large media conglomerates can hardly be accused of liberal bias.  Indeed, the exact opposite is more likely to be true.  Certainly many of the News Corp–owned media promote conservative points of view.   And combined with the demise of the Fairness Doctrine, it has become increasingly easy for these behemoths to control public opinion (and therefore legislation). 

Could that be the real reason behind deregulation?

Dealing with Revolting Joe.

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Recently, Joe Lieberman said he would not be one of the 60 votes necessary to bring the Senate health care reform bill to the floor. What a shock! After all, this is a man who ran against his party’s nominated candidate as a so-called independent. He campaigned and voted for his pal, John McCain, for President. He spoke at the Republican National Convention.
Then, following the election, he came back to the Democratic caucus so he could retain the chair of a powerful Senate committee.

Now, he claims that he’ll refuse to vote for cloture on the health care reform bill out of “principle.” His concern is that the bill contains a public option. So he’s willing to help Republicans filibuster in order to kill the bill. This from a man who worked to eliminate filibusters as a freshman Senator in 1994.

So what changed?

Likely he’s more concerned about the insurance companies that are headquartered in Connecticut than he is about the citizens of his state. And perhaps he feels he owes big insurance for campaign donations toward his re-election. That would make his stance more about principal than principle.

So what are Democrats to do about Revolting Joe? If he kills health care reform by siding with Republicans, they could take away his chairmanship. But that would likely drive him to the Republican caucus which would mean that the Democrats would no longer be able to block any Republican filibuster.

On the other hand, if Democrats do nothing to punish him, Revolting Joe would continue to caucus with Democrats, but his vote would be unreliable and he would be free to use his position to kill Democratic legislation or to extract concessions.

I propose that Democrats call his bluff. Let him help Republicans filibuster health care reform. Let Joe and his conservative buddies prattle away on the Senate floor for days on end. Turn the whole affair into an exhibition of stupidity. Let Americans see the “Party of No” at work. I believe that would make it virtually impossible for Republicans to gain many seats in the House or Senate in 2010. It would make Revolting Joe a pariah among his constituents, save for the insurance companies. And although big insurance can fund his campaign, they can’t re-elect him.

A simple plan for taking back our economy.

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It has been more than a year since Wall Street’s risky investments collapsed our economy.  Unfortunately, Congress still has not passed legislation to prevent such calamities in the future.  Instead of trying to craft new legislation, I suggest that Congress look to the past.  To wit:

1 – Reinstate, in its entirety, the Glass-Steagall Act.  The act created firewalls between commercial banks, investment banks and insurance companies following the Great Depression.  It was the unraveling of this act in 1994 that undoubtedly led to our current recession.

2 – Re-regulate derivatives to prevent highly risky investments resulting from the so-called “Enron exception.”  The “Enron exception” protected the company’s on-line commodity trading from federal regulation ultimately leading to Enron’s failure.  So, of course, Republicans couldn’t wait to expand the legislation which resulted in runaway crude oil prices and the housing-fueled financial collapse of 2008.

3 – Re-regulate banks by instituting a national usury law that would cap interest rates at 12 percent.   Prior to the Reagan-era deregulation, today’s interest rates would have resulted in prison sentences for loan sharking. 

4 – Restore the maximum income tax rates to pre-Bush levels.  Better yet, restore the maximum rates to pre-Reagan levels.  This could provide additional income to rebuild our infrastructure and/or reduce the national debt.

5 – Close tax code loopholes which encourage U.S. corporations to establish off-shore “headquarters” in order to avoid taxes.  At the very least, prevent such corporations from receiving government contracts.

6 – Use our anti-trust laws to break up any corporations deemed “too large to fail.”  If a company is so large that its failure would damage the nation’s economy, it automatically qualifies as a monopoly.

There is nothing new or Earth-shattering about any of these measures.  And that’s the point.  They have all been proven.  In fact, they kept our government and our businesses operating effectively for decades until Republicans undermined our nation’s economic security in order to deliver greater profits to their greedy corporate masters.

The Bill of Rights that was never enacted.

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Michael Moore’s latest movie Capitalism, A Love Story includes film from President Franklin Roosevelt’s 1944 State of the Union address.   As part of his address, FDR stated, “It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known.  We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.”  He continued, “We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence.  ‘Necessitous men are not free men.’  People who are hungry and out of a job are the stuff of which dictatorships are made.”  

President Roosevelt proposed what he called a second Bill of Rights “under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.”  This 2nd Bill of Rights included:  The right to a useful and remunerative job in the industries or shops or farms or mines of the nation; The right to earn enough to provide adequate food and clothing and recreation; The right of every farmer to raise and sell his products at a return which will give him and his family a decent living; The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad; The right of every family to a decent home; The right to adequate medical care and the opportunity to achieve and enjoy good health; The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment; The right to a good education. 

Roosevelt concluded that “America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.”  Unfortunately, FDR did not live long enough to see his 2nd Bill of Rights enacted.  The question now becomes, will we? 

Why different standards for ACORN and Halliburton?

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Recently, Congress voted overwhelmingly to suspend funds for ACORN.  Never mind that the bill violates the Constitution’s prohibition on Bills of Attainder (singling out a single group or individual for punishment).  According to Republicans, ACORN must be punished for the actions of a few of its staffers.

Why suspend funds from an organization that has a long history of helping the poor?  The short answer is that ACORN has made it more difficult for Republicans to be elected, and Democrats are simply afraid to be painted as too partisan. 

During last year’s presidential election, ACORN invoked the fury of conservative talk radio and Fox News by registering voters.  Since most of these newly registered voters were minorities and/or poor it is assumed that they voted for President Obama.  Of course, the conservatives cried foul.  They accused ACORN of helping to steal the election.  They claimed that ACORN had registered tens of thousands of illegal votes.  There were widely publicized registration forms for Mickey Mouse, Minnie Mouse, Donald Duck, etc., which seemed to point to widespread voter fraud. 

The problem with that argument is that ACORN pays members to register voters.  Since the members are paid by the number of registration forms filled out, some of these people inevitably try to scam the system.  ACORN recognizes that possibility, and since it has to account for every single voter registration form, the organization sorts the forms into three categories before submitting them to the local voter registration office:  Those that can be confirmed, those that cannot be confirmed, and those that are obviously fraudulent.  Therefore, if there is fraud, it occurs at the voter registration office.  ACORN should not be held accountable.

Nevertheless, Republicans felt they must do something to rid the country of ACORN, so a few enterprising conservatives went looking for evidence that ACORN is a renegade organization defrauding the American public.  Two young people posed as a pimp and a prostitute and visited ACORN offices looking for advice on how to run a brothel and funnel the money into a Congressional campaign.  In three offices, ACORN volunteers provided advice.  In another, the ACORN volunteers recognized the scam and “punked” the actors. 

There is no question that those who provided the advice should be fired.  And they were.  But attacking an organization of more than 500,000 members for the bad behavior of a few is ridiculous.  If we’re going to use that standard for all organizations receiving money from the federal government, then why not suspend all further contracts with Halliburton?  After all, the sloppiness of a few employees in its KBR subsidiary caused numerous soldiers to be electrocuted in Iraq.  There are also accusations that several Halliburton employees gang-raped a woman in Iraq.  When the woman tried to sue Halliburton for her treatment, she was told that the fine print in her contract prevents lawsuits.  Finally, there is alleged evidence that Halliburton has defrauded the government out of millions of dollars.  Yet there is no parallel outcry against Halliburton such as that against ACORN.  No legislation to withhold funds.

Or how about Blackwater, aka XE?  Blackwater mercenaries have been accused of murdering Iraqi civilians and raping Iraqi women.  Yet XE still receives lucrative contracts with the Defense Department.

There can be only two explanations:  Money and influence.  Halliburton and XE have them.  ACORN does not.

Where will our jobs come from?

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As economists talk about the prospects for an economic recovery, they often mention that it may well be a “jobless recovery.”  Is anyone really surprised by that?  After all, in the interest of “globalization” we’ve exported most of our jobs to other nations.

When large corporations began selling the notion of globalization in the 1980s, they promised American workers access to new markets for American-made products in places like China and India.  The reality is much different.  Once so-called Fair Trade rules were established, American corporations began relocating manufacturing to nations with cheaper labor.  One American manufacturing industry after another was closed…steel, textiles, shoes, electronics, furniture, tools…the list is extensive.

Soon after, much of our agricultural production was exported to Mexico, Central and South America. 

We were told that none of this would harm the U.S.  In fact, the corporations and politicians said that this would benefit Americans with more diverse and lower-priced products.  Moreover, we could easily replace “dirty” low-paying manufacturing jobs with “cleaner” technology, service and information jobs. 

The next step was to move corporate call centers to Mexico, India and the Philippines.  (After all, that kind of work is much too mundane and boring for American workers.)   

Next, the corporations began hiring illegal immigrants for restaurant, landscaping, meat processing and construction jobs.  We were told that these were jobs Americans citizens were unwilling to do.  (The corporations neglected to mention that the real reason American citizens didn’t want these jobs were reduced salaries and benefits.)

More recently, corporations have exported the creation of software to India.  At the same time, they’ve requested special green cards for Indian engineers.  The corporations claim that too few Americans are as well-educated and trained. 

Even our military has gotten into the act by hiring mercenaries from other nations to provide security for American diplomats in Iraq and Afghanistan.

Is it any wonder that our health care system now represents 1/6th of our economy?  And we’re already hiring nurses and doctors from other nations to meet “shortages”.

So what will unemployed American citizens do?  The most promising opportunity is for the invention and manufacture of so-called green products such as wind turbines, photovoltaic solar panels and higher mileage vehicles…if politicians and corporations don’t export these jobs first.

Taking back our country.

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No, I didn’t suddenly become a pitchfork wielding right-wing lunatic.  I don’t own a handgun or an assault rifle.  And I have no doubts that President Obama was born in Hawaii.  But I do believe our nation is in jeopardy. 

However, we don’t need violence to address the issues.  All we need is legislation.  And it’s not even new legislation.  Just return the U.S. to the tax structure and regulations that existed in the U.S. prior to Ronald Reagan. 

Want to prevent another financial crash like the one that happened in 2008?  Simply eliminate the Gramm-Leach-Bliley Act of 1994.  That legislation, sponsored by a Republican-controlled Congress and signed into law by President Clinton, permitted bank holding companies to co-mingle financial institutions of deposit, investment and insurance which contributed to the collapse of our financial system last year.  You might also fire those in the Federal Reserve who failed to exercise the oversight that’s already within its power.

Want to eliminate the predatory tactics of the banks which issue credit cards?  Simply nationalize usury laws which limit interest rates in many states.  These laws were allowed to be circumvented in the 1980s by large bank holding companies. 

Want to reduce our national debt?  Simply return the highest marginal income tax to pre-Bush rates.   

Want to rebuild the nation’s failing infrastructure?  Return the highest marginal income tax to Eisenhower administration rates of the 1950s.  After all, that was the last era when our nation made significant investments in infrastructure.

Want to bring back manufacturing jobs and diminish unemployment?  Undo the relaxation of tariff laws that enabled “globalization” by our large corporations.  In reality, “globalization” is just another term for exporting jobs, undermining worker benefits and wages, increasing profits and avoiding corporate taxes.  (How many U.S. corporations have created a mailing address in the Bahamas or the Caymans to avoid U.S. taxes?)

Want to calm the angry rhetoric on radio and TV?  Reinstate the Fairness Doctrine which existed prior to 1987.  That doctrine, enforced by the FCC, required the holders of broadcast licenses to present controversial issues of public importance, and to do so in a manner that was honest, equitable and balanced.  (Wouldn’t you like to see Rush Limbaugh, Glenn Beck, Fox News Network and Focus on the Family try to justify their existence under those rules?)The point is most of the problems in this country aren’t new.  We’ve addressed them all before.  We can do it again.

Show us the money.

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When the housing market crashed bringing down the financial industry along with it (or was it the other way around?), trillions of dollars vanished.   The question is where did the money go?

The Federal Reserve along with the Bush administration started propping up the financial industry and the economy beginning in 2007.  Mostly this was done quietly with little to no media attention.  By the time President Obama was sworn in, taxpayers had already shelled out more than $3.46 trillion and the world economy was on the verge of collapse. 

Since Obama’s inauguration, the federal government has committed another $3.77 trillion in loans, bailout funds and stimulus spending to stave off what most economists concluded would be a 2nd Great Depression.   

And people are outraged!  Not at the ones who created this mess and originally hid it from the public.  But at the administration who inherited it.  That kind of logic could only be demonstrated by the likes of Glenn Beck, Rush Limbaugh and Dick Armey.   Where are their “Teabagger” demonstrations against CitiGroup, Bank of America, and Wells Fargo?  Where’s the right-wing fury for AIG?  Where are the posters calling Bush and Cheney Socialists and Communists for having allowed (or encouraged) this to happen?   

More important, where’s the money?

Of the $7.244 trillion total, $168 billion was mailed to taxpayers in the form of stimulus checks.  $787 billion is dedicated to stimulus spending on infrastructure and new jobs.  $275 billion is targeted at foreclosure relief.  And $15 billion is aimed at supporting small businesses. 

The rest of the money ($6.167 trillion) went to prop up the very institutions that created the mess.  For example, $234 billion went to CitiGroup, $137.5 billion to AIG, $118 billion to Bank of America and $29 billion went to Bear Stearns.   Another $700 billion was dedicated to the Troubled Asset Relief Program.  $1 trillion was set aside for the Term-Asset-Backed Securities Loan Facility to make it less risky for banks to lend money to businesses and consumers.  $720 billion was set aside to help banks remove toxic assets from their balance sheets.   Indeed, almost all the rest of the money has been allocated to help our banks recover from their own risky behavior.

And it has worked really well…for the banks.  Thanks to government aid, the CEOs, fund managers, and other financial executives are still able to afford new vacation homes, yachts and other “necessities” with their bonuses.  They’ve been able to raise fees on checking accounts and interest rates on credit cards.  And they’ve been able to return to the risky behavior that led to this mess in the first place.

Best of all, thanks to their lobbying efforts, paid for in large part by taxpayers’ money, they’ve so far been able to fend off serious regulation.   

Bush League Economy

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In baseball, bush league refers to the lowest level – a metaphor that perfectly fits the economic performance of the George W. Bush administration.  It’s even more appropriate given that Bush made millions by gaming the City of Arlington and its citizens as “Managing Partner” of the Texas Rangers baseball team.

In short, the people of Arlington got screwed.  Not entirely unlike what Bush did to the people of the United States as our 43rd President.

This is no longer just opinion.  It’s fact.

According to a recent report by the Census Bureau, the median household income in the U.S. declined 4.2 percent during Bush’s two terms.  At the same time, the number of Americans living in poverty increased 1.9 percent to 39.8 million (the most since 1960).  More disturbing is the number of children now living in poverty:  When Bush entered office 11.6 million children were living in poverty.  When Bush left office, that number had swollen to nearly 14.1 million.  That’s an astonishing increase of more than 21 percent!  Under Bush, job growth was a dismal .28 percent – the worst performance since World War II.  The number of Americans employed in manufacturing dropped beneath 10 percent for the first time in history.  And the number of Americans without health insurance increased to 15.4 percent.

On every major measurement, the economic condition of American people declined during the Bush administration!  The housing industry crashed, the financial industry collapsed under the weight of its own risky gambles, stock markets crashed and two out of the Big Three U.S. auto makers faced bankruptcy.   About the only people who didn’t suffer under Bush’s watch were oil executives, military contractors, hedge fund managers and the extremely wealthy.

Predictably, the Republicans are now trying to reassign the economic blame to President Obama.  They accuse him of increasing the size of government, increasing the size of the federal debt, and taking over private businesses.  Let’s look at the facts:

The government, the deficit and the national debt all grew under President Bush.  The Department of Homeland Security represented a huge growth in government.  But the growth of government under Bush wasn’t confined to just the one department.  (In the first 3 months of 2008 alone, the federal government added 13,800 jobs under Bush.)  The deficit and debt under Bush increased in large part as the result of Bush’s misadventures in Iraq.  The real cost of that war is estimated at anywhere from $2-3 trillion, and some estimate that the cost of the Afghan war will overtake the Iraq war in 2010. 

The bailout of financial institutions is estimated at $3 trillion.  Approximately one-half of that was approved by the Bush administration.  And none of the money would have been necessary if not for the Republican’s aversion to regulation of financial institutions.

Finally, you can’t blame President Obama for the takeover of the U.S. auto industry.  Indeed, we all should thank him for it.  Had the Bush administration not allowed wild speculation of commodities, oil would not have spiked as they did in 2008.  Had that artificial spike not been followed by the collapse of our financial institutions, the auto industry would never have experience such severe problems.  And had the Obama administration not stepped in to help, the economy may well have fallen into another depression.

The other side of Reaganomics:

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In a previous post, I stated my belief that Reaganomics was an utter failure.  That’s not entirely true.  It was a huge success for the wealthy.  It also successfully eroded the power of organized labor. 

When Reagan fired the striking air traffic controllers who were members of PATCO, I believe he inspired his followers to launch an attack on all labor unions.  Since that time, there has been a steady outsourcing of American manufacturing jobs to places like China, India, Indonesia and Mexico.   This has forced unions to make concessions with regard to wages and benefits.  The recent troubles of GM and Chrysler are good cases in point. 

During the debate over auto industry bail-outs, the discussion seemed to revolve around the wages and benefits of United Auto Workers.  Never mind the decades of questionable decisions by the company executives, along with their inflated salaries.  In the minds of many, the real problem is that UAW workers were paid more than their counterparts at Honda, Toyota, Nissan and other import brands.  The claims were that while the workers for foreign brands were paid approximately $45/hr, UAW workers were paid $70/hr or more.  Outrageous!  Right? 

Well, hold on a moment.  My UAW friends tell me that the figure of $70/hr not only included wages and benefits such as health care.  It also included the cost of benefits for recent retirees, plus all costs associated with workers – overtime costs, Social Security, Medicare, etc.  It even includes the cost of tools used by the workers!  Take away all of those costs and the actual average hourly wage was $29.78. 

But it’s not just lower wages the Reaganites are after.   What they really want to do is to rid corporations of the obligation for health and retirement benefits.  And what better way to accomplish than to crush organized labor? 

It took a couple of wars, the Great Depression and many bloody management/labor clashes for conditions to improve for American workers.  I fear that Reaganomics combined with globalization and the greed of CEOs may be leading us back to labor conditions similar to those under the robber Barons of the early 1900s when work was more like servitude.