Corporations

Our Out-of-Whack Economy and the Happy Talk Propagandists

dlindorff — Thu, 29 Oct 2009 14:42:23 -0400

By Dave Lindorff

If you listen to the happy-talk folks at Treasury and the Fed, and
on the tube, you’d think things had finally turned a corner. The
economy grew at a 3.5% annualized rate in the third quarter ended
September 30. “The Economy is Back in Gear” shouted the headline on an
article by CNN senior writer Chris Isadore. “The recession ended
unofficially in September,” said a reporter on NPR.

There was some mention of the fact that earlier in the week there
were reports that consumer confidence had fallen, foretelling a
sluggish Christmas retail season, and that new home sales slipped an
unanticipatedly high 3.6% in September, when analysts had been
expecting a rise in sales. Meanwhile, new unemployment claims filed
during the third week of October jumped to 531,000, well above the
predicted 520,000, indicating that the official unemployment rate is
likely to top 10% in the next Department of Labor report due out in
early November. As well, fully one-third of the nation’s homeowners
were now said to be “underwater,” meaning that their outstanding
mortgage balances are greater than the current value of their homes.
Not surprisingly, foreclosures are continuing to surge.

How to explain this seeming oxymoronic situation? Well, that
positive economic growth figure, which comes on the heels of a 6.4%
decline in GDP in the first quarter and a .7% decline in the second
quarter, is, according to government analysts, actually largely the
result of two government stimulus programs—the “cash for clunkers”
program that induced people to rush out and buy a new car (usually a
much smaller, cheaper and, for the car makers, less profitable one than
they had been buying in prior years), and the $8,000 new home tax
credit, which led a lot of people to rush out and buy a first home.

The thing about those two stimulus programs is that they don’t so
much expand economic activity as they push it forward. That is to say,
a person who takes advantage of the cash-for-clunker program is
generally someone who owns a worn-out junker and needs to buy a new
vehicle anyhow, so what the government subsidy does really is just push
that purchase forward. Once the program ended, sales of cars plummeted
(not to mention that the bulk of the payments went to people who
purchased foreign cars, so the economic boost was just for dealers in
the US, not car makers). The same is true with houses. Very few people
would make the decision about whether to buy a home or not based on
just $8000, but the availability of an $8000 government subsidy for a
limited time would lead people to push forward their plan to purchase a
home.

What that means is, don’t count on this “recovery” to last into
next year. The cars that needed to be bought have been bought, and the
homes that people wanted to buy have been bought. The car subsidy is
gone now, and even extending the home buying subsidy, as the realty
industry lobby is pressing Congress to do, isn’t going to induce that
many more people to buy.

Meanwhile it’s worth noting an oddity about this “recovery” being
trumpeted in government and media. The relationship between the dollar
and the stock market has become very strange. If you look back at
stories on these two things to 2007, before the financial crisis hit,
and earlier, you’ll see myriad articles explaining that the dollar and
the US stock market tend to move in tandem. This was always explained
as being because as the dollar strengthens, foreign investors want to
put their money into dollar-denominated assets. Similarly, if the
dollar weakened, analysts would write confidently that the stock market
would be hurt as investors pulled their money out of US equities to
invest in markets denominated in appreciating currencies.

Now, the analysts say that as equities strengthen, the dollar will
fall, but if equities fall, the dollar will appreciate. The reason for
this new inverse relationship should be cause for considerable alarm.
Why? In fact, it turns out that the last eight months of a rising
equities market has been largely the direct result of a shrinking
dollar. This is because so much of the sales and earnings of companies
in the S&P 500 and the much narrower Dow Index are earned overseas,
denominated in foreign currencies, but accounted for on the books of
these US-incorporated firms in dollars, that as the dollar declines in
value, corporate sales and earnings appear to be growing. Reportedly,
as much as 80 percent of the appreciation in the S&P Index since
last March 9 when the market hit bottom can be attributed to the
dollar’s fall against major world currencies.

Financial writers and reporters on TV don’t mention this tectonic
shift. They just report the new relationship (Stocks up, dollar down,
stocks down, dollar up) as though that’s they way it’s always been. But
actually, this is a phenomenon has normally ben characteristic of Third
World, so-called “developing” economies. That since the end of 2008 it
has become characteristic of the US economy should be cause for concern.

So don’t be conned by the happy talk salesmen at the Fed and
Treasury and in the White House, or by their propagandists in the
newsmedia, who are trumpeting the latest GDP growth figure as a sign
that the recession is over, apparently in the hopes that people will
run out to the mall and start spending (in those remaining stores that
don’t have their windows taped or covered in plywood). What we’ve seen
was a blip on the chart, engineered by a couple of “going out of
business” sales by the car and housing industry.

Real unemployment—measured the honest way it used to be 30 years
ago, to include those who have given up looking for work or who are
working part time involuntarily—is hitting 20% (for those who are bad
at math, that’s one out of five working-age Americans). Foreclosures
are hitting a record. Half of laid-off workers are cashing out their
401(k)s in order to buy food. State and local governments, both major
employers, are hitting a wall as tax collections plummet and federal
stimulus funds run out. This is not the foundation for a renewal of
economic growth; it is the precondition for a renewed or prolonged
recession.

And if the dollar continues its slide, which is likely given the
US’s huge budget deficits and trade deficits, as well as the Federal
Reserve’s inability to raise interest rates (a move that could
strengthen the dollar but which would crush the economy), all those
things that Americans buy abroad which are no longer made at home, as
well as the oil that is imported, will cost that much more, driving
consumers further into the hole. And remember, 70% of US GDP is
consumer spending, a result of our decimation of our industrial base.

Recession ending? Don’t bet on it.

_______________

DAVE LINDORFF is a Philadelphia-based investigative journalist.
His latest book is “The Case for Impeachment” (St. Martin’s Press,
2006). His work is available at www.thiscantbehappening.net

Dark Days But a Ray of Hope for Embattled Workers

dlindorff — Fri, 17 Jul 2009 14:29:33 -0400

By Dave Lindorff

The Democrats in Congress have sold out their supporters in the
labor movement by giving up the so-called “card-check” feature of the
embattled Employee Free Choice Act, which makes the “reform”
legislation that has been billed as labor’s “number one issue” much
less of a reform. Instead of being hammered into line on this issue by
party leaders and by President Obama, who has long pledged to back
EFCA, conservative Democrats in the House and Senate were allowed to
join Republicans in opposing the measure, leading to its replacement
with a vague plan to require quicker secret-ballot elections in
union-organizing drives.

But largely unnoticed by the corporate media, there has been some
really important good news for working people and the labor movement:
the appointment of three people to fill the long-vacant empty seats on
the five-member National Labor Relations Board, which has the ultimate
job of adjudicating issues under the National Labor Relations Act.

The Bush administration had basically gutted the NLRA by simply
failing, since 2007, to fill the three seats that had been emptied as
prior board members’ five-year terms had expired. This had left the
NLRB with only two members, one a Democratic, pro-labor appointee, and
one a Republican pro-management appointee. Since these two members
would vote on opposite sides of most issues, the only issues they ended
up issuing decisions on were 400 particularly egregious cases, where
they could both agree—and most of those are still in legal limbo since
they have been challenged in court on the basis that board rules
require a three-member quorum.

The Obama administration, in April, announced three new
appointments to fill the vacant seats...

For the rest of this story, please go to:
www.thiscantbehappening.net
_____________________

DAVE LINDORFF is a Philadelphia-based journalist. His latest
book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work
is available at www.thiscantbehappening.net

What Makes Sense for Health Care Makes Sense for Autos: Car Industry Needs Public Option Too

dlindorff — Thu, 04 Jun 2009 12:49:32 -0400

By Dave Lindorff

Just imagine for a moment that you are a retired contractor,
struggling to get by on your pathetically shriveled 401(k). when your
ne-er-do-well child suddenly comes to you saying he’s got this idea to
start buying derelict homes and rehabbing them for resale. He asks you
to stake him with a $100,000 loan (about half of what you’ve got left
in your retirement fund), promising to repay you when he sells his
first couple of houses. You know the kid’s flat busted and has been
laid off from his job as a dishwasher, so you want to help, but you’ve
also seen his carpentry skills: The doghouse he build in high school
fell apart on a windy day, and his own house has a leaking roof, needs
repainting, and all the plumbing leaks. You’ve also seen his business
skills: He plays the Lotto excessively, hasn’t saved a penny, and buys
most of his supplies at the local 7-Eleven.

Would you front this kid half your money?

Well, if you really loved the kid, and if he was in danger of
losing his house, you might want to help,. But the smart thing to do
would be to offer to go in with him in the business, acting as the
contractor, so that you could train him in the necessary business and
contracting skills, and at the same time make sure the rehab jobs got
done properly.

That might work out. Your son might never learn to be a master
carpenter, but at least you’d have a good shot at getting your
investment back.

What wouldn’t make sense would be to just hand over the $100,000,
and say, “I’m going to stay out of your way son. Good luck, and
remember to pay me back when you sell a few of those houses.”

Crazy, right? And yet that’s what the Obama administration’s auto industry “rescue” plan amounts to.

We Americans like to fancy ourselves the supreme rationalists, but
when it comes to economic policy, we are as mired in superstition and
religious dogma as any theocratic society in the world.

Our religion is “free-market economics,” which posits that an
“invisible hand” of competition takes care of all problems, leads to
the optimum outcome in terms of distribution of wealth and standard of
living, and ensures maximum success in business.

Looking at the auto industry rescue program objectively, you have
to ask why President Barack Obama would insist that the government,
despite being the major owner of both Chrysler and General Motors, is
refusing to demand a primary say, or really any say, in running those
companies. I mean, if you are the major shareholder—and in this case
“you” is not just the government, it is all of us, the taxpayers—you should
be running the company. It is the government that should be naming all
the members of the boards of directors of the two firms, and it is the
government that should be deciding who will be the chief executives.

For the rest of this story, please go to: www.thiscantbehappening.net

---------------

DAVE LINDORFF is a Philadelphia-based journalist. His latest
book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work
can be found at www.thiscantbehappening.net

Workers Always Lose, Even in Rescue Operations

dlindorff — Fri, 01 May 2009 14:20:23 -0400

By Dave Lindorff

What’s wrong with this picture: Four groups invest in a company.
One group puts in a 55% investment, a second puts in a 20-35%
investment, a third puts in an 8% investment and a fourth goes in for
2%. The group putting in the 20-35% stake gets three seats on the
company’s nine-member board of directors, which will be appointing the
new company’s management team. The group investing 8% gets four board
members, and the group investing 2% gets 1 seat. Finally, the group
that will hold the majority stake in the company, 55% of the shares,
gets…the one remaining seat on the board.

Why would anyone buy a majority stake in the company and accept
only a 1/9 representation on the board, and thus virtually no say in
the selection of management or in management decisions?

The answer is that that particular shareholder is the unionized
workforce of the company—in this case Chrysler Corp. One seat is all
the workers were offered in the Obama Administration-brokered deal.

Under the plan worked out by the White House, Chrysler management,
Fiat and the company’s lenders, Fiat, the Italian automaker, will take
a stake of somewhere between 20-35% of the bankrupt American automaker,
getting a third of the board for its efforts. The US government, which
has provided and will continue to provide billions of dollars in loans
and guarantees to underwrite the rescue plan, will get an 8% ownership
but an outsized four members on the board in return, and Canada, for
just a 2% stake, will also get one seat on the board.

Logically, Chrysler workers, who will be covering half of the
company’s $10 billion obligation for retiree health care (putting their
own future health care at risk should the venture fail), and who have
agreed to significant cuts in wages, benefits and work rules that had
been negotiated over years of struggle, should clearly be getting five
of the seats on the board and the right to name the company’s new
management team, but that would smack of socialism, apparently.

Imagine workers actually being in charge! Preposterous, right?

Of course, if you step back a minute and think about it, it was
corporate managers, put in place by boards of directors who represent
the elite of the Wall Street investment crowd, who have run most
American companies, and indeed the whole US economy, into a ditch.
These supposedly smart folks with their fancy MBAs and PhDs and law
degrees have outsourced jobs, pillaged the environment, destroyed
communities, piled on debt, failed to modernize and invest in R&D,
laid off highly skilled workers in favor of lower paid, less skilled
workers, poisoned and injured their own workforces, made stupid
acquisitions motivated by a desire to aggrandize more power or more
market share, rather than to achieve real synergies, and have pilfered
corporate resources to boost their own undeserved obscene levels of
compensation.

How, on reflection, could a worker-run company—and I mean a real worker-run
company where the board is in the hands of the workers, and the workers
chose and hire and fire the managers—do any worse than what we’ve seen
over the last decade?

There is an irony here. Corporate lobbyists have been battling
against the Employee Free Choice Act, a labor law reform bill in
Congress which would eliminate the need for workers to go through a
supervised secret-ballot election in order to win representation of a
union at their workplace, substituting the requirement that organizers
simply obtain signed cards calling for a union from a majority of the
workers at a workplace. The corporate argument against this reform is
that it violates the “sanctity” of “one person, one vote”.

And yet, here we have not only a much larger number of people—the
27,000 unionized workers at Chrysler—but also the holders of a much
greater number of shares than everyone else combined, getting only a
tiny fraction of the vote. That glaring inequity doesn’t seem to bother
the corporate elite and their elected servants in Washington one bit.
And it’s actually even worse than it looks on its face. Chrysler’s
unionized workers don’t even have a direct vote to control their own
shares, which are actually controlled by a trust fund headed by a group
of “independent” trustees not chosen by the workers. (“Independent”
means “not controlled by the workers.”)

Chances are, if Chrysler were really placed in the hands of its
workers, it would be a great success. Workers, after all, need to think
long term. Their key motivation is to have a company that will provide
them with jobs and wages until retirement, and with a decent, secure
retirement pension for the rest of their lives. That is exactly the
kind of motivation that we should have in our companies, and in our
corporate management suites.

It is not what we have right now.

As a long-time business journalist, I can tell you that you would
have to search long and hard to find a management in American business
that is thinking even five years ahead. One or two years would be more
common, and plenty are focused on the short end of that span.

A genuinely worker-run Chrysler would not be putting golden
parachutes in the contracts it offers to new top managers, nor would it
be giving them annual performance bonuses. It would not be paying those
managers 50-200 times what an assembly-line worker makes. It would not
be making gas-guzzling SUVs and high-end sports cars. Instead of trying
for quick sales of high-priced vehicles aimed at boosting earnings for
the next quarter, it would be designing and making cars that Americans
need, and that would propel the company’s sales and earnings for
decades to come.

Actually, we’ve been here before. When Chrysler almost went belly
up the last time, back in the economic crisis of 1979, it was rescued
with a $1.5-billion government loan. At that time, the workers, then
three times more numerous, also took pay cuts and benefit cuts, and in
return were given a seat on the corporate board, held by then UAW
President Douglas Fraser (who died last year at 91), but no real say in
management. Fraser’s appointment—the first ever of a union executive or
representative to a corporate board—was seen as a shocking development,
but he was never more than a token. The company’s management, headed by
Lee Iacocca, proceeded to ignore the 1973 gas crisis and its early
warning about the need for energy-efficient cars, which were in any
event fueling the import surge of cars from Japan and elsewhere, and
went off in the direction of short-term gain, building vans and trucks,
and paving the way for Chrysler’s next crisis in the 1990s, when it
ended up being taken over for a song by the private equity group
Cerberus, then by Germany’s Daimler, finally ending with the current
near-death experience.

Odds are, had Chrysler been worker-run back in 1979, the company would be in a wholly different place today.

The trouble is that what is deceptively called “worker-ownership”
here in America, with the exception of some very small companies and
co-operatives, is in reality just a carefully circumscribed rip-off
scheme, in which workers surrender their assets and swallow pay raises,
and maybe get a token representative on the board, but end up being
systematically excluded from any significant role in managing “their”
company, which is actually run by a board composed of the agents of
banks, institutional investors and other owners.

The only difference this time around is that the governments of the
US and Canada will now have majority control of Chrysler’s board.
Perhaps the board members appointed by those two public investors will
act more in the interests of the workers at Chrysler, and in the
long-term interest of both Chrysler and of the two countries, the US
and Canada. But given that President Obama has put this nation’s
economic management in the hands of the very people who helped bring
the US economy to its knees, and that Canada is currently being run by
a conservative prime minister, the odds of this happening seem pretty
slight.
_____________________
DAVE LINDORFF is a Philadelphia-based journalist (and is webmaster
of a worker-owned and run blog called ThisCantBeHappening.net). His
latest book is “The Case for Impeachment” (St. Martin’s Press, 2006).
His work is available at www.thiscantbehappening.net

Organize! Many Employers are Just Using the Recession to Stick it to Workers

dlindorff — Wed, 18 Feb 2009 16:54:17 -0500

By Dave Lindorff

Whatever the truth is about where this economy is heading, one
thing is clear: employers are taking every opportunity to slash
employment and, if they are unionized, to hammer unions for pay cuts,
even when there is no justification for these actions.

Take Safeway Inc., a large national supermarket chain. The company,
which had $44 billion in sales in 2007, and which, based upon third
quarter figures for 2008 was well on the way to show record sales for
2008, appears to be using the economic downturn as a justification for
laying off employees and making remaining employees work harder.

I can only give anecdotal information on this, but the Genuardi’s
Family Market store (a Safeway subsidiary) where I live, in Upper
Dublin, PA, an upper middle-class suburb north of Philadelphia,
according to its employees, has been laying off cashiers, and slashing
its night work force—the people who restock the shelves and unload the
delivery trucks when the store is closed. The management is doing this
not because sales have slumped. They haven’t. People may not be buying
new cars, but they are still buying food, and in fact, if they are
cutting back on eating out, as restaurant chains are reporting, they
are probably actually buying more groceries, not less. Management is making these cuts simply because they can get away with it.

The layoffs, in the face of continued heavy business, means that
cashiers are working harder. It means that the night staff, cut by
half, is working twice as hard. But with jobs getting scarce, what is
their option? If they don’t like the speed-up, where are they going to
go in the current environment? Meanwhile, if service gets worse,
customers will accept the decline because they’ll blame it on the
economy, not noticing that there is really no justification for
employee cutbacks at the supermarket.

Temple University, which is a major public higher education institution
in Philadelphia, is reportedly telling all departments to make
substantial cuts in their budgets . This will inevitably lead to
layoffs of faculty and support staff critical to the education mission.
And yet, what is the justification for such draconian measures? The
governor initially announced plans to cut the state's contribution to
the university’s annual budget for next year by a few million dollars,
but the new Economic Recovery Act stimulus package includes huge grants
to the states, including Pennsylvania, more than compensating for those
cuts. Furthermore, state-funded universities across the country,
including Temple, are reporting increased applications and
enrollments, as students whose parents cannot afford to send them to
private colleges, send them instead to public institutions, and as
workers who lose their jobs decide that the economic downturn is a good
time to go to college and get an education. That means more tuition revenues
coming in. Moreover, student aid, including Pell Grants for
lower-income students, have been substantially increased in the
stimulus package, meaning more money for public colleges.
Money might be marginally tighter at places like Temple (while, as with
most public institutions, the university’s endowment is not a
significant contributor to the operating budget, small as it is it is
certainly significantly reduced because of the market collapse), but
it’s certainly not down by enough to put universities in crisis. It may
not even be down at all.

It might be understandable that state and local governments would
be considering layoffs, or reduced pay and hours for public employees,
given the slump in tax revenues from property taxes, sales taxes and
income taxes. It is certainly necessary for the auto industry, which
has seen sales plummet, to lay off workers. Luxury stores like Circuit
City are going bust. But not all employers are hurting alike. Health
care industries are still booming. Public colleges are doing fine.
Supermarkets are doing well. Energy companies are okay.

Criticism of the nationwide wave of layoffs by companies and
employers that really don’t need to beggar their workers or push them
out onto the street came from an unusual quarter recently, when Steve
Korman, chief executive of a privately held Philadelphia-area company
called Korman Communities, blasted corporate executives for laying off
workers when they don’t really need to. Korman had gotten upset when he
saw Pfizer Inc.’s CEO Jeff Kinder say, on a television business
program, that he planned to lay off 8000 workers in anticipation of a
merger with Wyeth, another drug company. The layoffs were not being
made because Pfizer was losing money or in trouble financially, but
rather to improve profits. Korman, who owns stock in Pfizer, got angry
and spent $16,000 to run ads in the Philadelphia Inquirer and the New York Times, saying:

"I have listened to the executives of many companies say that
they are eliminating thousands of jobs to 'improve the bottom line,' I
own stock in many of these companies and would prefer that the company
make a smaller profit and [that] the stock fall, in the short term,
rather than affect the lives of our neighbors and their families as
jobs are lost.
"Please join me in reminding all CEOs that we are
not just dealing with numbers and profit, but with real people and real
families who need to keep their jobs."

Korman sent individual letters saying much the same thing to 16
companies in which he is an investor, including Federal Express,
Google, Cisco Systems, Caterpillar, General Electric, ExxonMobil,
Kraft, Nokia, Intel, Johnson&Johnson, Apple, EMC, Chevron, DuPont,
Coca-Cola, Oracle and Dow.

If this phenomenon is bad enough that it has upset a prominent capitalist like Korman, it is clearly a major problem.

The irony is that as all these companies slash their workforces,
and force remaining workers to work harder, and as public institutions
like Temple University and other colleges cut their faculties and
increase class sizes for remaining teaching staff, they are undermining
any stimulus that taxpayers are subsidizing in the massive stimulus
bill, and thus making the recession worse, not to mention wasting the
huge deficit-spending measure itself.

Nobody would argue with a company’s laying off of workers when
sales collapse and there is no money coming in, but in many cases this
is not what has been happening.

One reason there is a tidal wave of layoffs even at viable
businesses and institutions across the country is simply the lack of or
weakness of labor unions. With workers at most employers unorganized
(unions represent only some 8 percent of private employees), it is easy
for managers to engender an attitude of fear and passivity among
employees, which makes it easier to pick them off, and to make those on
the job work ever harder. Furthermore, without labor contracts, there
is little workers can do to resist speedups that can seriously threaten
their health, safety and well-being.

Only a new militancy and sense of solidarity among American
workers, and a revitalization of the nearly moribund labor movement,
can rescue this situation, which will only get worse as the economy
continues to sink.

Demand that Congress pass, and President Obama sign, the
Employee Free Choice Act, which would restore some fairness in the
contest between management and labor by allowing workers to establish
unions in their place or work by simply obtaining signed cards from a
majority of the employees, instead of having to go through a Labor
Relations Board-run election, which can be delayed by management for
years, giving companies time to fire and scare off union backers and
activists. To sign a petition to Congress, click here
____________________
DAVE LINDORFF is a Philadelphia-based journalist.. His latest book
is “The Case for Impeachment” (St. Martin’s Press, 2006 and now
available in paperback edition). His work is available at www.thiscantbehappening.net

Whatever Happened to Antitrust?

dlindorff — Tue, 17 Feb 2009 15:12:38 -0500

By Dave Lindorff

Now here’s a word you’re not hearing in America these days: anti-trust.

The country is being dragged down by monstrous businesses, all of
which, we’re told, are just “too big to fail.” As a consequence of
this, the nation’s taxpayers, and their progeny born and yet unborn,
are having trillions of dollars sucked away to prop up these giant
rotting corporate corpses.

Zombie banks, zombie automakers, zombie insurance companies, all bigger than nation states, and all on life-support.

There is a simple answer to this problem. Bust them up.

Looking at the nation’s largest banks—Bank of America, Citicorp, JP
Morgan Chase, Wells Fargo and others—it’s clear that some parts of them
are functional. They have, for example, massive deposits. They also
have massive debts, many of these toxic and pretty much worthless.
Instead of bailing these failed institutions out, which is not going to
work anyhow, and which only delays and makes more costly the final day
of reckoning, the answer is to have the government carve out the
profitable banking parts of these financial institutions, and set them
up as free-standing banks, and then let the rest of the carcass of each
bank go down the tubes, taking gullible shareholders and bondholders
with them.

Then the remaining banks left from this process should be broken up by anti-trust actions into regional or even state entities.

There is simply no need for national banks. Such institutions are a
disaster for smaller companies and individuals, since they are only
really interested in lending to big national or multinational
companies. I remember years ago, back in the early 1980s, when bank
consolidation was just getting underway, how Citibank began adding fees
to its checking services simply because it wanted to drive away small
customers. It was an indication of what was coming. Screw the little
guy.

It doesn’t matter to large companies if there are no national banks.
When they want a big loan, they simply arrange for a syndicate of
smaller regional banks to put a package together. That is the way
things used to be done, and it can be done again.

Insurance companies too should be broken up. It is ridiculous to
have companies the size of AIG or Aetna or Prudential, any of whose
failures can threaten the global economy. Again, there is simply no
rationale for the existence of such mega-corporations. Insurance
companies have ways of sharing risk through reinsurers, so that smaller
companies are no more vulnerable to disaster than larger firms. They
may, in fact, be less vulnerable, since their managers will be closer
to their customers and probably more careful about what they insure and
what they invest in.

Finally, let’s look at what used to be called “Detroit.” In its
heyday, there were many more car companies than simply three. There
were American Motors, Hudson, Packard, and Studebaker, there was Mack
Trucks. Then we had a wave of consolidation and bankruptcy. In the end,
several companies—Ford, GM and Chrysler—won the day, but not because
they had better products. Rather, they were bigger, and had bigger
marketing budgets and more extensive dealership networks. Unable to
compete, good companies went bust.

As the number of car companies dwindled, so did the need to
innovate. With Chrysler just a shadow of its former self, there are
really only two domestic carmakers today, and they have spent much more
time and money using their political clout to block efforts in Congress
to force them to make better, more efficient and more socially
responsible products, than they have devoted to actually competing in
the marketplace. They have become “too big to fail.”

So now we’re being asked to bail them out to the tune of tens of
billions, and ultimately probably hundreds of billions of dollars.

Okay, I’m willing to agree that it is a good idea for the US to
have a domestic car industry, but there is no reason why it should
consist or two or three giant companies.

Let’s break these companies up into smaller enterprises, each
making one nameplate, and let them compete. With smaller, nimbler car
companies, we would see quality electric cars at affordable prices in
no time, and gas mileage would soar.

While we’re at it, let’s not stop there. The Federal Trade
Commission and the Justice Department should conduct a broad study of
the US economy, looking at every industry, with an eye to busting up
every company that is deemed “too big to fail” because of the impact
such a failure could have on the broader economy.

“Too big to fail” should mean “too big to exist.” It’s not just
that giant companies put the economy at risk. Their size makes them way
too powerful economically and politically, too. (Just look at how
Microsoft, a company that has a mediocre product line, has been able to
succeed in killing off its competition not by making a better
mousetrap, but by simply crushing or buying up those firms that do make
better ones.) Politically, breaking up mega companies prevents such
monopolistic behavior. It also creates more diversity of interest
within each industry, thus providing openings for other political
groups—like trade unions, environmentalists, etc.-- to play companies
off against each other on particular issues.

While we're at it, let's also break up the huge companies that dominate three crucial sectors of the economy, to the detriment of the public good: energy, the media and the military. Does anyone doubt that the phenomenal rise in energy prices we have been experiencing is related directly to the mergers that have occurred over the last decade in the energy industry? Or that America's endless wars, and its military budget--now equal in size to that of all other military budgets in the world combined--are a direct result of the dominance of several giant military companies--GE, Westinghouse, Boeing, Northrop-Grumman and Raytheon? Finally, if it weren't for all those media mergers, we wouldn't have newspapers closing down all over the place, and we wouldn't have the homogenized, sanitized network news we're stuck with now, either.

The tools are already at hand to tear all these anti-democratic,
anti-social and uneconomic corporate monstrosities apart. So let’s fire
up the legal chainsaws and start cutting them down to size. Instead of
bailout, we need to start hearing the word anti-trust in Washington.
____________
DAVE LINDORFF is a Philadelphia-based journalist. His latest book
is "The Case for Impeachment" (St. Martin's Press, 2006 and now
available in paperback). His work is available at www.thiscantbehappening.net

Free Online Book on Impending Financial Crisis

davidswanson — Fri, 16 Nov 2007 07:38:45 -0500

Labor and Paycheck Fairness

ricks_research — Sat, 08 Sep 2007 12:29:35 -0400

In these times of severe economic stress upon the middle class and the poor classes of our country, while the richest are becoming wildly richer, I beg of you to please support campaigns and legislation to correct the unfairness and to improve the distribution of economic wealth to those that properly deserve it.
It is the workers of America that need your help, and need it now.
We have suffered greatly for many years, it is time to turn this around in favor of the working people of America instead of the wealthy. It is time for the wealthy to payback what they owe the rest of us.

In recognition of Labor Day, here's a list of some of the current legislation in Congress affecting workers and businesses:
* H.R. 2, the Fair Minimum Wage Act of 2007. This act was passed by both the House and the Senate. It incrementally raises the federal minimum wage from $5.15 to $7.25 per hour, with the final stage taking place in July 2009.
* S.367, the Decent Working Conditions and Fair Competition Act. This act prohibits the "import, export, and sale of goods made with sweatshop labor"
* S.766, the Paycheck Fairness Act, "to provide more effective remedies of victims of discrimination in the payment of wages on the basis of sex"
* H.R. 2442, the Rural America Job Assistance and Creation Act, "To provide job creation and assistance"
* H.R. 2132, the Small Business Health Plans Act of 2007
* H.R. 1012, the Small Business Growth Act of 2007
* cap and regulate exorbitant CEO and other executive pay

Wall street needs to be cleaned up, and knocked back down into their place relative to the workers of America. The workers vastly outnumber the Wall street slick willys, why do we let them steal our wealth and power? It is time to stand up, and yell back at these narcisistic blow hards, and take back what is rightfully ours!!!

This is a small start, but it needs much more improvement.
Please help us, we are counting on you all!

What say you all?

One death is a tragedy; a million is a statistic.

Chris Elliott — Thu, 22 Mar 2007 22:00:51 -0400

"One death is a tragedy; a million is a statistic."

Joseph Stalin's infamous words.

This certainly seems to reflect corporate media's attitude to the ongoing slaughter in Iraq.

It is the 4th anniversary of Operation Iraqi Liberation (O.I.L) - the invasion was later renamed for PR reasons - and despite the US military's reluctance to 'do body counts' a number of other organizations are aware of the level of carnage. Rather than being described as an 'insurgency' it should more accurately be described as a 'holocaust'.

New estimates at the number of Iraqis killed in the conflict over the last 4 years place the death toll at a little over 1 million lives. With 3.7 million refugees and incalculable numbers of wounded, traumatized, tortured, imprisoned, raped, or contaminated with depleted Uranium. This must be some strange new version of the word 'liberation' that I was not previously aware of.

Add to this another half million infant deaths during the 10 years of ~~medieval siege~~ sanctions that Madeleine Albright assured us 'were worth it'.

If a hundred Americans or Britons were killed in a explosion it would be a media sensation for weeks. Russia announced a day of mourning after over a hundred people were killed in a mine explosion last week. In Iraq they dont have this luxury since every single day is a national day of mourning.

Yet to the corporate media these daily massacres are just statistics that may occasionally get a mention but are otherwise less newsworthy than the daily crossword puzzle. Instead they bombard us with celebrity drug scandals, runaway teenagers, confessions of stick-thin supermodels, or more sickening by far, they lambast other nations for their 'poor human rights records' and 'press censorship'. They condemn democratic countries like Iran for being undemocratic while ignoring the fact the US is spending billions on ~~bribes~~ Aid to some of the nastiest undemocratic regimes in the world (Pakistan, Egypt, Colombia to name but 3 of a long list) not to mention close military ties with Israel and Saudi Arabia whose human rights records must surely rank close to the worst of all.

The English language fails us sometimes, there should be a far bigger word than 'hypocricy'.

Privatization, Human Sacrifice And The Architects Of War

bobhiggins — Mon, 12 Mar 2007 22:42:12 -0400

Appeasing The Gods Of The Shareholders

There was a time when, as a matter of policy, America went to war only as a response to an attack by an aggressor. In 1962 John Kennedy had every reason to make war with Cuba and Russia when Kruschev talked Fidel into parking several dozen Soviet nuclear missiles ten minutes from Washington and 90 miles from spring break.

Most of the Joint Chiefs, especially Curtis Lemay,(General Bat Guano?) along with a sizable faction of Kennedy's closest advisers urged the President to invade. Lemay wanted to send his B52s, (presumably not to drop leaflets) while others preferred a massive land invasion, perhaps to restore the Cosa Nostra to control of Cuban Casinos, the way God intended.

There is an apocryphal story told that Marine Commandant David Shoup (under whom I served at the time) presented the assemblage of top level civilian and military advisers with an easel containing a map of Cuba, over which he had placed an acetate overlay of a tiny Pacific atoll named Tarawa. Tarawa, which the Marines had invaded early in WW2 was shown graphically as a small speck against the background of Castro's Mediterranean worker's paradise.

He then proceeded to inform the gathering that the insignificant speck had not been at all pacific, having cost the lives of over 1000 Marines and the wounding of 2200 others, creating a great storm of protest at home over what was seen as a needless squandering of lives to gain a tiny piece of real estate. Tarawa, he is reported to have explained, was defended by 4500 Japanese while Castro would field 150,000, and perhaps as many more.

The zeal for a land invasion was somewhat diminished by General Shoup's presentation. Cooler heads prevailed, the young president proceeded to threaten Kruschev with massive nuclear retaliation, Niki packed up his nukes and went home, diplomacy or a good bluff, worked, the republic was saved, 250,000 young troops did not have to wade ashore and spill their guts on Fidel's beautiful but hostile beaches and I pull shore leave in San Juan and discovered how to drink Cuba Libras past the point of absurdity.

Those were still the good old days in the world of war making, when Presidents, Congress, large segments of the press and a sizable portion of the body politic banded together with the men and women who were to be slaughtered, made whatever sacrifices necessary to get through the horrible, bloody task and achieve victory.

Businesses as well, were asked to make sacrifices, to retool from the making the products of peacetime, the creation of tractors or Packards or hula hoops to building tanks, rifles and ships, and asked to bid competitively for the right to participate in the glorious business of waging war.

It worked well, victories were had, foes were vanquished, medals were awarded to the mothers of the dead, the prosthetics business flourished and everyone was happy.

Then came Vietnam.

No one attacked us in Vietnam, the Gulf of Tonkin was as phony as Saddam's WMDs

We became embroiled in a war with another sovereign nation in order to prevent the spread of an ideology with which we disagreed, in a region in which we saw resources and markets that we wished to exploit and to beat our major competitors to the loot that we perceived was laying in wait off the coast and beneath the earth of Indochina. Interestingly the cast of characters was similar to today's tragic frolic in Iraq, Humble Oil (now Exxon) was there, Brown and Root (before Kellogg) was there, General Dynamics, General Electric, Bell, Dow Chemical, all the big players came to the game. I think these guys get lifetime season tickets to these things.

We encountered fierce resistance from a people who had suffered long on the pulling end of history's colonial yoke. We were quickly mired embroiled in a civil war, quagmire they called it, between those who nominally supported us and the majority of Vietnamese (both North and South) who had equally as much love for us as they had for the Chinese and the French; with whom they had ample previous colonial experience. We spent ten frustrating years trying new strategies before the ferocious stubbornness of the enemy and the return to sanity of the American people and some of our leadership forced us to withdraw from the massive bloodletting.

We left the souls of nearly 60,000 of our sons and brothers and sisters in those fetid jungles. Another 300,000 of those still living may be seen from time to time in various VA hospitals. I have lunch twice a week with some of them, they seem distressed.

No one from Iraq attacked us in Manhattan either, nor in Virginia nor the wilds of Pennsylvania. No one from Iraq attacked us in our War on Terror. If memory serves 15 of the terrorists who attacked us were Saudis, two from the United Arab Emirates, one from Egypt, and one from Lebanon. They were working under the direction of a son of one of the most important families in Saudia Arabia, a follower of Wahabi Islam, whose name is still praised in many of that country's madrasahs and to whom influential Saudis still send cards, letters and financial support

But we invaded Iraq, declaring it to be a hotbed of international terror when the evidence against Paraguay or Lichtenstein was just as damning, as that against any number of other places that had nothing to do with the 9/11 horrors.

But Iraq was a centerpiece in the textbook which had been provided by the Project for the New American Century.

The neocons needed access to Iraqi oil, natural gas, pipeline routes from the Caspian, a litany of colonial wants needs and desires. At the minimum they had to prevent the Russians and the Chinese from exercising their influence on this vital area and it's riches and there was talk among the Iranians and others of moving to trade oil in Euros rather than dollars.

In the past, before the defense industry, Big Oil, the American Enterprise Institute and the Project for the New American Century invented the concept of preemptive war and presented it to the band of criminal sociopaths now posing as our government, war was seen as a serious and ugly business. A terrible thing involving death, destruction, anguish, pain and widespread human misery, something to be scrupulously avoided.

Now it was just business. There would be cruise missiles to sell, airplanes, helicopters, all the hardware and modern software of war. There would be bases to build, tents to pitch, meals to overcharge, there would be an enormous sales volume and concomitant profits, great steaming piles of tax payer provided cash to roll in. This would be the ultimate entrepreneurial experience, free enterprise on steroids and speed and unlimited greed.

Of course there would be casualties, but in all great human endeavors there are costs, sacrifices to be borne by someone else's children or grandchildren. Besides, the losses were manageable, with our power to bring shock and awe, to bring a level of violence and destruction unknown in human history, a talent that had come to define us as a people in the eyes of the world, victory would be swiftly achieved, we would be welcomed in the Iraqi streets with garlands of roses and anointed with fragrant oils.

At any event we had a volunteer military, they knew the risks. This was simply a matter of throwing the occasional virgin into the volcanic caldera for the appeasement of the gods and the good of the established order.

For the good of all the major players.

Bob Higgins
Worldwide Sawdust