"These executives are the highly representative product of a capitalist system that has reinterpreted the original neo-liberal doctrine so as to remove any and all of its moral connotations. Thus has the official doxology imposed the idea that the market is a pure mechanism for the optimal allocation of resources, a strictly neutral procedure from a moral perspective. Thanks to this intellectual hoax, faithless and lawless speculators along with finance's whiz kids have amassed fortunes without anyone questioning their decency. That out-and-out swindlers were able to so easily blend into the background shows the degree to which moral ruin has overrun the system."
Capitalists Against Capitalism
From the French publication: Les Echos - 24 March 2009
Who's Too Big to Fail?
Why was there such public and congressional consternation expressed, over Wall Street's admitted intention to continue with its longstanding driving philosophy of huge bonuses? I for one never for a moment entertained the thought that they'd give of the 'goose that laid golden egg.' After all, why should they?
If they were going to change they would only do so in the face of firm federal standards, that were the outcome of well documented definitions of 'unjustified risk taking.' However, a recent editorial in the conservative Wall Street Journal clearly indicates that such an event is not likely to happen anytime soon.
Regulators today won't define 'systemic risk,' unlike 25 years ago.
The Wall Street Journal - SEPTEMBER 13, 2009
With Congress back in session and the anniversary of the Lehman Brothers failure upon us, the Obama Administration is resuming its quest for greatly expanded authority to bail out American businesses. Under the Treasury reform blueprint, any financial company, whether a regulated bank or not, could be rescued or seized by the Federal Deposit Insurance Corporation if regulators believe it poses a systemic risk.
If recent history is any guide, when the feds stage their next intervention, they will not define "systemic risk" and they will refuse to release the data underlying their decision. To this day, taxpayers can only guess at the specific reasons behind the ad hoc rescues that began with Bear Stearns in March of 2008. Now Team Obama seeks to codify the bailout policies of the last 18 months.
Bailouts are Déjà Vu
Many people who were born after 1954, are not aware that a bailout of a large company was undertaken by the federal government once before. The company in question was General Dynamics, a leading producer of defense systems for the United States and its allies. The company was incorporated in 1925 as Electric Boat.
In 1963 the corporation was in dire economic straits, when the government awarded the giant company a contract to build the replacement aircraft for its aging B-52 bomber fleet.
U.S. Defense Department invited several American defense contractors to bid for the production of a new aircraft, the F-111, to replace the B-52 bombers. And General Dynamics entered the competition in partnership with the Grumman Corporation, against a design submitted by Boeing.
Disregarding the appraisal of many who regarded the Boeing F-111 as the better built and the more capable plane, the General Dynamics/Grumman version was consistently declared superior by Pentagon officials and industry experts.
An investigation of impropriety in the selection process was interrupted when President John F. Kennedy was assassinated in November 1963, and was not concluded until 1972.
General Dynamics continued to develop its version of the F-111 at its Convair facility in Fort Worth, Texas. The Air Force and Navy amended their design specifications and requested the addition of so many devices that the prototype could barely fly.
With its utility as a replacement for the B-52 greatly diminished, the aircraft's role was reassessed, and the project was eventually identified by congressional critics as an example of gross mismanagement, organizational incompetence, and financial irresponsibility.
The F-111 project consumed an inordinate amount of the defense budget and delayed by six years the introduction of Grumman's similar - and in many ways superior - F-14 Tomcat.
By the end of this time, however, General Dynamics had managed to recover financially. Assisted by the wasteful infusion of taxpayer dollars - on an aircraft they obviously were not qualified to build in the first place. And with the help of their many friends in the Department of Defense, the deed had been done.
At the time, there was no major fanfare over this maneuver by Congress and the Department of Defense, because this was not a series of banks. This was just one company with divisions employing close to one hundred thousand people, which was deeded - too big to fail.
The Mega Corporation
Can anyone tell us when in time did the Mega Corporation came into existence as a living entity with - a built-in right to exist? Better yet, when did the treasury or Congress begin crafting specific laws for its general welfare and survival? And most of all, when was it written into law that the American taxpayer must prop it up when and if it begins to fail? If you don't know the answer to these questions, not to worry, - neither does anyone else.
In order for gross incompetence, corruption and non ethical behavior to exist and grow to a level of absurdity, there must be somewhere for it to fester - unnoticed. This need dictates size rather than mere vicinity to a food source. But bare no doubt, the food source is the - American taxpayer, and the vicinity in question is the - United States Congress.
What is even more disastrous for the country is the gradual evolution of - Mega Corporation thinking. And a perfect example of that is the financial disaster that finally overtook General Motors. On June 1, 2009 General Motors Corporation, once the world's second largest automobile manufacturer and a global sales leader for 77 consecutive calendar years (1931 to 2007) - filed for bankruptcy.
GM manufactured cars and trucks in 34 countries and employed 244,500 people around the world - so how could this happen? Well the immediate question we should all ask is - why didn't anyone see the 'train wreck' that was coming? The answer to both questions is simply - no one in charge believed it could happen - and that imbedded belief became overriding corporate policy! In fact, like the Titanic sinking - such a financial calamity was thought to be virtually - impossible!
The Super CEO
How much should an individual be monetarily compensated to run a corporation profitably? If we listen to Wall Street and Neo-Conservatives, that amount should be based on - whatever the market will bear - with no limits.
Now answer this trick question: How much should an individual be paid to run a company into the ground? If we heed the actions of America's corporate world the answer would be - they should be paid the same.
Every man and woman on the street would tell you that such an outlook is not only implausible, but outright insane. Yet most of us went along with it because - we have as Americans have been conditioned to accept such a philosophy. This philosophy is equivalent to the medieval - Divine Right of Kings.
However, the situation becomes more obtuse as we realize that inclusive with this corporate mind set, is the secondary acceptance that - when individuals make huge errors in the administration of huge businesses, we are obligated to keep them in their positions at huge compensation because - only they have the talent to solve the problems - they made. Does that really make any sense to anyone out there?
In the early days of production of the Ford Model - T, it was inquired of Ford by a newsman as to how many colors he would offer to the buyer. Ford's answer: They can have any color they want - as long as it's black."
It has always been the dream and motivating desire of corporate America to 'dictate' to its buying public, rather than placing their chances upon advertisement. However, what was left out of the equation was even the remote possibility of - foreign competition. After all, at the end of World War ll, hadn't we virtually blown up every foreign possibility of competition? Or did we do them a big favor that allowed them to - start from scratch?
With a lower labor cost and no capitulated union contracts strangling them, foreign firms, led by the Japanese, came on strong. And what was their victory cry - give the customer what he or she wants. Note, no overcompensated CEO's were involved.
Where Was the Vision?
Despite the evidence before us of all of the errors of 'thinking - too big to fail, we allowed the Bush administration and the Dick Cheney crowd to continue the policy beyond the borders of America. The excerpt from the following article is clear evidence that American leadership appears to harbor - an - 'economic death wish.'
Tomdispatch.com - July 2, 2009
Along with postcards of cowboys riding jackalopes and giant berries on flatcars, there's a brand new entry in the American gigantism sweepstakes: an embassy complex to be built in Islamabad, Pakistan, for -- if you assume the normal cost overruns on such projects -- what's likely to be close to a billion dollars. If that doesn't make the U.S. number one in the imperial hubris footrace for all eternity, what will? The question is: with its projected "large military and intelligence contingent," and its "surge" of diplomats, will that embassy also issue the largest visas on the planet?
Here's the strange thing: The embassy story was broken at the end of May by the superb journalists at McClatchy News (in this case, Warren P. Stroebel and Saeed Shah). As part of what Shah, in the Christian Science Monitor, estimates as a staggering "$2-billion-plus price tag on a revamped diplomatic presence for the United States in Afghanistan and Pakistan," they reported that an appropriation of $736 million for embassy construction had quietly made its way through both houses of Congress without a peep from anyone. This news, however, seemed to plunge off a steep cliff into a deep well of silence. Indicative as the Obama administration's decision to build such an imperial monstrosity may be of a longer-term commitment to a wider war in the Af-Pak (as in Afghanistan-Pakistan) theater of operations, it evidently proved of no interest to anyone here.
Despite the fact that major news operations have been bolstering their staffs in Pakistan, there has been no further reporting on the appropriation, the plans for the embassy, or what it all might mean. As far as I can tell, nowhere in the United States did a mainstream editorial page decry, challenge, or even discuss the development.
Society Security Debacle
Is Social Security too big to fail? Yes, but not because of its administrative size, but its function. We know that it is not a 'profit making' system, but that's to it's benefit. And the only reason it is running into the red is that our politicians have used it as a vote getting piggy bank for far too long. According to the General Accounting Office (GEO), the federal government 'owes' the Social Security System over $3 trillion dollars.
How can we possibly expect the rest of the world to follow our leadership, when we cannot solve the basic elements of taking care of our own people? We are the only developed nation that does not have a Universal Health Care System. And are we not the ones who have a major political party advocating the abandonment of the System - considered by the rest of the developed world to be one of the best ever thought out? The big question is not why we can't, but the inbred resistance we have cultured over the years - not to do it. Many in America regard such a program as what was once referred to as - 'creeping Socialism.'
Most of all, the Right Wing resistance to Social Security (as well as Social Medical Insurance and Social Pharmaceutical Aid) is rooted in the fact that to make such a system work - well, it becomes necessary to view the Capitalistic Profit System in a harsh light. One cannot have the four locked in the same room, where the food is divided in half, with half going to the Profit System. In other words, Profit has to learn to live on - less.
And the Beat Goes On....
In simple terms, the Roman Empire went under because only a few clear thinking heads could see what was going to happen - but no one listened to them.
Coming Next to the American Crisis Arena - The United States Postal Service - its going folks! |