Tuesday, March 13, 2007

This week in Corporate Power

Halliburton Co., notorious among the left wing as a no-bid oil and defense contractor (read: War Profiteer) and former employer of Dick Cheney, made headlines this week by announcing that they, like Michael Jackson, will be relocating to Dubai. While this has caused a large outcry in Congress (everything about the move seems suspicious) spurring accusations of future expatriate tax dodging, legal wrangling, and even the conspiracy theory that Halliburton has inside information that President Bush will soon begin a war with Iran (it's illegal for American companies to work inside Iran, so Halliburton can't profit off a possible reconstruction like they are in Iraq if they're an American company.)

Whatever the reason, and parts of the move do make good corporate business sense, it sparked a debate this week across many forms of media regarding corporations and corporate power. We all recall last year's exporting of U.S. Port security to a Dubai based company, as well as the expansion of "Free Trade" to Central America with the signing of the CAFTA agreement. CAFTA, coupled with a 90's "Free Trade" obsession that brought us both NAFTA and the WTO, has lead us into an unprecedented era of global corporate power. As trade barriers, protections, and tariffs are continually bulldozed to make way for a sort of global Oligarchy (their are currently about 800 billionaires in the world, while more than 3 billion people live on less than $2 a day.) This all begs the question, do economies exist to serve society, or does society exist to serve economies?

For those who don't know, tariffs are something we've had in the United States since our very founding. The basic idea is to level the playing field and keep major industry, agriculture, and production strong in a country. If it costs a business $1 to buy a bag of sugar in America, and a penny to buy it from Costa Rica, you can buy it from wherever you want, but the Costa Rican bag would be taxed ninety nine cents, evening out the playing field. Because of tariffs, America was a global production machine for it's entire history, that is, until Ronald Reagan came into office.

Reagan did away with rules requiring companies to adhere to U.S. trade protections, which began an economic race to the bottom which still lasts today. During Reagan's presidency America lost some-odd 6 million manufacturing jobs to China and India, 3 million jobs under Clinton, and that flood still continues. After eight years of Reagan, four of Bush Sr., Eight of Clinton/NAFTA, and another eight of George W. and his corporatist philosophy, the United States produces almost none of it's own cars, clothing, electronics, computers, steel, hell, even our food is tied up in imports. If we ever run into a military entanglement with China, we'd be on the short end of the stick since China manufactures almost all of our military weaponry.

This decade of "Free Trade" is the reason that the American middle class is vanishing. Those millions of jobs lost were mostly middle class jobs, and also mostly union jobs. The American dream is a house, a car, and a comfortable family life. Before Reagan and neoliberal "Free Trade" a single paycheck family could get by because of good wages and trade protections, now Americans work longer hours than ever for far less pay. What's become evident over the past decade is the neoliberal/neoconservative policy of Corporate "free trade" and deconstruction of tariffs is producing a global Elite (800 billionaires) and a global poverty/working class (everyone else.) Even the rhetoric of pushing "Free Trade" to help small and local business has been worn out, since it's painfully evident that multinational corporations, and only multinational corporations, are benefiting.

Back to the question of economies serving societies: once upon a time, corporations (as well as media outlets, hospitals and HMOs) were required by law to "serve the public good." This need to serve the public good was chipped away during the 20th century when antitrust laws ceased to be enforced. This allowed power and money to become concentrated in the hands of smaller and smaller groups, and as the century went on, states began to compete with each other to house corporate headquarters, each state lessening their own articles of incorporation to make potential tax bases more attractive. (On a side note, Congressman Bernie Sanders has show interest in legislation to stop this practice of states undercutting each other by denying said states funds for such things as highway projects and transit bonds.) This shift away from the public good, and toward corporate good, all began with a controversial Supreme Court decision from 1886, where the Court ruled that corporations do not share the rights of citizens. However, the summary of the decision, written by a court clerk who was also a former railroad CEO, contradicted the decision by the justices. This contradiction went unnoticed, but has been citied many, many times in the Supreme Court in the upholding of "corporate personhood" when in actuality, the decision stated exactly the opposite.

This week, as President Bush tours Latin America, pushing for more "Free Trade," we should take the opportunity to ask just what our threshold for corporate profit and trade protection is. If China and Japan stopped buying our debt, or if global oil markets began trading in Euros or Yen instead of dollars, our economy would crash because of the trade hole we've dug ourselves this past twenty years. We manufacture nothing, and have little control over our food supplies and other corporate controlled aspects of American economic life. Prices for absolutely everything would soar, and we'd quickly learn first hand about the living conditions we've imposed on the so-called third world for so long. Picture a second Great Depression, just without the industrial engine for economic recovery.

Thursday, March 01, 2007

How I Learned To Start Worrying And Loathe Supply Side Economics

Let's talk about debt.

Recent statistics tell us that since George W. Bush came into office and squandered the treasury surplus that the "pay as you go" Clinton years left, every child in America from here on out will be born with essentially $30,000 in debt. Those of us who have student loans, credit bills, and/or health care problems are no strangers to manageable debt, but a new report this week from the Congressional Auditor from the Office of Government Accountability throws even more fuel onto George W's insane fiscal fire.

Closing the fiscal gap over will cost us 26 Trillion Dollars over the next 75 years, or roughly $300,000 per full-time worker for the next six decades. That's me. That's my friends, my sister, my cousins. Thank you President Bush. Thank you Republican Party. What's $300,000 over the course of my life, really, if it means Ronald Reagan gets his face on a coin?

A combination of future costs from entitlement programs (Social Security, Medicare, Medicaid) combined with Bush's tax cuts for the wealthy; deficit spending; tax breaks for corporations; slashing of the estate tax; borrowing from China, Japan, and Saudi Arabia to keep the Treasury afloat; decrease of real wages combined with the largest gap between the rich and poor since the Depression; our ridiculous trade deficits from the WTO and NAFTA; and Bush's multi-billion dollar mistake in Iraq.

All of these factors combine to leave my generation with a bleak financial outlook for the future. If China topped buying out debt, our economy would sink. The same goes for India, Japan, and Saudi Arabia. The Republican Party believes that in the long run, the free market will work itself out, but on a global level there is no real free market, just a planet-wide race to the bottom for wages and living conditions. Even Adam Smith, who praised the free market and capitalism as a great good, wrote extensively for the need of governments to regulate it, lest it subsume itself. As it did in the 1930's. As it's threatening to do again. We left the 90's with a budget surplus, but thanks to tax cuts, unfunded entitlements, and corporate deregulation since Bush took office, the rich are richer than ever, and everyone else is trying to skate by. We tried this in the early 80's, and in his second term Reagan had to pass maybe the largest tax hike in U.S. history to keep the country afloat.

There are currently sixteen million Americans living in poverty, plus more than 700,000 Americans homeless. These are the facts.

I believe in the free market. I believe in regulation. I believe that everyone should pay their fair share. I believe in making money. I don't believe in making money on the backs of a huge class of working poor. When Japan moves auto plants to Canada for no other reason than they have single payer health care (one-third of the price of a car made in America is figured in from our outrageously costly and ineffective free market health care system) something is wrong. When we buy over $234 billion a year more from China than they do from us, when our manufacturing base is so fractured and sold off, I worry. About my future. Our future. We talk every day about the human costs of the war in Iraq. We fret about elections that are years off. We rush to the radio for breaking news about Anna Nicole Smith. I worry about my kids someday. We saw what can happen this week when slight market adjustment in China dropped the Dow Jones 400 points, and nearly sank the dollar. This is the tip of the iceberg.