Corporations are beneficial forms of business. They provide almost equal investment opportunities for everyone—although without equal decision information—and they sometimes even create "economies of scale" by delivering useful products most efficiently at low, competitive prices. By leveraging capital, they are able to build products otherwise unimaginable, like Adobe software, Boeing aircraft, Apple Computers, and then others like BP, Goldman Sachs investments, AIG insurance, Merrill Lynch investments, or Enron energy.
They are giant businesses. Without regulatory limits, they wield monstrous power. In the U.S., as in Mexico and in other countries, they have become stronger than the government; their money can overrule environmental laws, influence and even control our public officials and judiciary. They prey on our most treasured democratic institutions and values. The patrician owners, leaders of corporations, have their own self-interests and agendas, and they rarely set a priority to improve the greater good of society.
On the other hand, government's job is to balance the competitive markets so that they comply with the needs of society in general such as clean environment, health, or whatever the majority of citizens set as social goals. Today this balancing is not working. And it's a problem we need to fix in our current system of government.
The stewards of industry always spread a certain ideology to protect their interests. Consider the privately owned Koch Industries, valued in the billions, the Koch brothers own patented processes, mostly by inheritance, to convert oil into gasoline; you can guess why they lobby against any awareness of global warming. (1)
The captains of industry believe in magic. They have become the tribal high priests of our culture, while our enfeebled democracy fails to set boundaries and rules to develop our society in general. One of the most glaring ideas that corporate elitists hold close to their hearts is that a "free market"—one that is uninhibited by government policy—always corrects itself to the most efficient conditions. This notion about a "free market" arose from something Adam Smith said way back in the 18th century in terms of "the invisible hand" that guides markets to correct themselves as they satisfy the needs of individuals.
Meanwhile, the neoliberal corporatists ignore that they are neither concerned nor equipped to solve larger economic and social problems. The more contemporary, post-WWII economists, like John M. Keynes, emphasized that government must play a crucial role in markets in order to point industries toward the optimal levels of wealth, the greatest good of society, and away from abuses of power. American has miserably butchered its social development, while nurturing rampant consumerism for individuals and predatory corporatism. Right-wing activists, like the middle-class Tea Baggers, are woefully misguided and unwittingly only abusing themselves.
Corporate managers are generally not wise, altruistic saints looking for the best possible benefits for society at large. No. Their job is to keep their firms competitive and increase profits and stock values by any means. Today, one of the popular methods includes "investing" obscene sums of money in lobbying to slacken labor laws, taxes, and the bridles of government regulations. And as individuals, corporate managers do not possess the will or the power to make rational decisions for an entire society's best interests. They work for their own self-interests to own more preferred shares and to promote their careers, salaries, and bonuses. As they sip martinis at their exclusive country clubs, they joke about the stupidity of middle-class Tea Baggers.
Today's military and economic crises reflect many others in U.S. history. In the 1920s bankers and investors raised speculation into a feeding frenzy of greed leading to a Wall Street bubble, burst, and Great Depression in the 1930s. Likewise, the delusional bubble years of Reagan/Bush led to the same false gods of free-wheeling corporations taking power over the balancing controls of government oversight.
Reagan's empty speeches about "no government is best government" are still praised as great oratory by the wealthy, who benefit from it. The empty discourse continues even after all the hypermedia has crashed down around the ankles of the middle-class workers, who now pay for the excesses of the wealthy and their sycophant policy makers. America's history of bubble-and-bust business cycles allows no one to plead ignorance. No one can act surprised, least of all the well-heeled financial wizards responsible for the premeditated busts for profits.
American politics repeatedly shows the world that brain-dead incompetence is tolerated, the more its consequences are colossal and costly to working-class families.
The dazzling myth in today's America is that the U.S. government is empowered to direct the economy for the benefit of all people since the government is--theoretically--for and by the people.
"They argued perhaps naively, that in a democracy, the people were sovereign and government was, by definition on their side. The sovereign people were entitled to use governmental power and resources to redress the inequalities created by the economy of capitalism." (2)
FDR's New Deal supported this conviction and "a wide range of regulatory agencies were created, the Social Security program and a minimum wage law were established, unions were legitimated along with the rights to bargain collectively." (3)
Since the 1950s, the U.S. government has become weaker than corporate power. Its democratic processes no longer serve the interests of its citizens. During the 80s, Reaganomics (a.k.a. neoliberal economic policy) weakened and dismantled most of FDR's New Deal, "socialist" policies, which resulted in less equality. From the time of Reaganomics to the present, government policies distributed 200 times more wealth to the top 1 percent of the population, back to the robber barons—a return to the Gilded Age—while the middle class' income barely increased, if at all.(4)
During the 90s, Clinton continued this neoliberal trend. While looking to gain support from the Wall Street investment banks like Goldman Sachs, he hired Robert Rubin for help, which resulted in Rubinomics—the overturn of the regulatory Glass Steagall Act, thus enabling free-wheeling banking to run off the tracks by 2008. Banks like Goldman Sachs only used this major catastrophe first to fleece the middle class and then to take its tax-paid bail-out as the spoils of a corporate coup d'état.
"Rubin has been held in awe by the American political elite for nearly 20 years despite having f**ked up virtually every project he ever got his hands on. He went from running GoldmanSachs (1990-1992) to the Clinton White House (1993-1999) to Citigroup (1999-2009), leaving behind a trail of historic gaffes that somehow boosted his stature every step of the way." (5)
Recent crises show us how both Republicans and Democrats sing the same hymns in order to garner financial and political support from corporate lords. Does America now have a single party like, say, China or Cuba? If not, at least the differences are now little more than staged soap-opera dramas to maintain the American myth that voters have a choice—one between the neoliberal or the neoliberal policies—and that America is still a functional democracy, home of the free and the brave.
"Why has capitalism become so triumphant and democracy so enfeebled? Are the two trends connected? What, if anything, can be done to strengthen democracy?" (6)
The U.S. government is weak. It cannot control its own military-industrial complex, which has grown its own power base by lobbying, despite what citizens might vote to stop the endless wars and colonial occupations, most recently in Iraq and Afghanistan. As Andrew Bracevich points out in his book, Washington Rules, the American empire has become an unbearable burden, almost impossible to shake off our shoulders.
"The global military presence is ostensibly essential to the defense of American freedom even in places where the actual threat to American freedom is oblique or imaginary. Americans take all this for granted and so are blind to its significance. Like corruption or hypocrisy, this national security consensus has long since become part of the wallpaper of national life, attracting attention only when some especially maladroit escapade comes to light. So, too, with the Washington rules: It's only when something especially egregious occurs—most commonly a botched war—that members of the public take notice, and even then only briefly."(7)
Business leaders almost all sing from the same hymn book of fixed-ideas. Since before the Gilded Age, they have always used their power to lobby against government regulations, except for the few who dare heresy, only to risk their careers. "But Shiller's views conflicted with conventional thinking in a more profound way."(8)
The "smart" economists sing in harmony in order to keep their cushy jobs, they advocate economic policies beneficial for corporate agendas. No. This is not a conspiracy, it's just business as we know it in America.
The ideology has become a religion in America. Many public officials, economists, and industrialists have joined "the Family"—an elitist social prayer group—which cleverly brought God into their ruthless business ideology, where any means justifies their profits. In their world of elitist religion, the idea of the "invisible hand" is not government intervention, but it is God's providence, God's invisible hand guiding His chosen leaders, and to hell with Christ's middle-class morality; theirs is a new world order of "Christ plus nothing." For them, Christ is a God-chosen leader just as Attila the Hun, Genghis Khan, or Hitler.
"James A. Farrell or Henry Ford, commanding Pinkertons and the police; in Seattle, it was Dave Beck, Teamster, who owned the law, "Beck was living evidence that God's invisible hand blessed the ruthless as much as or more than those whom he considered the deserving." (9)
The wheels have fallen off American democracy. The vast majority of corporations, like religions, are not organized in any profit-sharing, democratic process. Quite the contrary, corporations "manage personnel" much more strictly than churches "shepherd their flock," and neither organization asks their participants to vote on issues.
Does the Catholic Church ask its members to vote on abortion, gay marriage or preemptive war? Pat Robertson asks his congregates for donations, but does he ask his congregation permission to buy a personal jet? Does the CEO of XE ask his employees what mercenary contracts to take on? And yet these are the primary types of organizations to which a large number of Americans voluntarily, and perhaps unwittingly, adhere as if they prefer living as automatons with prescribed moral and behavioral codes that provide simply a veneer of ethical professionalism. Middle-class working families seldom find the time to consider how our democracy hobbles along while industrialists devour any economic equality. Castaneda describes how inequity cripples democracy in Mexico. It directly applies to the U.S.:
"Economic mistakes, political abuses, and the dramatic increase of inequality in what was already one of the world's most unjust societies might not have been entirely avoided through democratic rule and authentic accountability, but they were absolutely inevitable in the absence of representative democracy." (10)
Corporate advertising creates a society with freedom to consume. Many business theorists, like the blundering and famous Milton Friedman, found this "free market" ideology to be highly appealing material for bestselling books. Friedman promoted the fetish of a market enabling consumers a "freedom of choice." This became especially attractive for most captains of industry looking to increase profits by any means, advertising and popularizing unbridled commerce.
At the same time, despite or because of this ideology of "consumer freedom," an eerie conformity—Babbittry—in how people think develops as we Americans behave as consumers more in line with marketing research rather than as citizens with individual critical thinking. Consumerism destroys communities where each individual competes to outdo the other. The alienation leaves people lonely and craving for some source of fulfillment. Drugs, alcohol, shopping or religion become the options in a mass market without any other culture than to work and to consume.
This surreal society, made up of androids, driven by purchase power, reveals itself now more than ever as some corporations in many industries crash after devouring their own food chain.
Many of the Wall Street bankers are terrorists. Al Qaeda's financial investors made millions by "going short" on stock purchases in U.S. airlines before 9/11, because they knew that, after the attack, the value of the shares would plummet. Following the example of the Islamic terrorists, our own investment bankers "went short," investing in the failure of the very same bad mortgage and credit card loans they sold to working families. Many Goldman Sachs employees probably attend mass or synagogue at least once a week, people drinking from our mainstream founts of moral courage and spiritual strength. Nevertheless, they contrive clever methods to fleece the consumers of America's spectacular, neon-lit disposable society—the middle-class workers jostling to buy stuff, living for celebrity bling, driving guzzling SUVs manufactured by an industrial dinosaur.
"The upper classes in this country raped this country. You f**ked people. You built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Nobody ever said "This is wrong'." (11)
The American aristocracy sets the rules, not the democratic system. A cabal of elitist economic advisors, like Rubin mentioned above, usually set policies of immense public consequences and more often than not, we--the general citizenry are hardly given a voice in the decision process or, if we do as in the 2008 elections for Obama, our voices were ignored as the campaign promises slipped on the occupation of Afghanistan or the futile 2009 surge in Iraq, and on the promise to raise the minimum wage, or on the mediocre healthcare reform, or the closure of Guantanamo.
In the recent financial catastrophe on Wall Street, policy makers made status quo assumptions, a blind faith in their ideology, and yet, despite their colossal blunders, they still remain in public office with their erroneous policies about free markets, torture, preemptive invasions, endless war, and wire tapping.
"Indeed, major actors such as Ben Bernanke and Timothy Geithner [Robin's pals] still are in leadership positions, with their past conduct receiving remarkably little criticism despite their having helped design the policies that precipitated the meltdown." (12)
Money trumps reality. Policy makers, like the ones named above, work in government or in think tanks or universities, which are often heavily influenced by the corporations that sponsor their jobs and research. This corporate influence has increased over the decades as corporations pay tax deductible "donations" to organizations and thus find a strong voice in how research findings are presented or not. Consider U.C. Berkeley's findings on how "new microbes" are eating up the oil spilled in the Gulf of Mexico and then look at BP's $500 million donations to the same research center. Consider the millions of dollars BP spent on lobbying to both Republicans and to Democrats, and then consider how the White House now fails to pressure BP to pay a high premium for the damages. Consider also how the Supreme Court recently overturned Citizens United v. Federal Election Commission, enabling corporations unlimited and direct campaigning for political candidates.
"Corporations have 35,000 lobbyists in Washington and thousands more in state capitals that dole out corporate money to shape and write legislation. They use their political action committees to solicit employees and shareholders for donations to fund pliable candidates. The financial sector, for example, spent more than $5 billion on political campaigns, influence peddling and lobbying during the past decade, which resulted in sweeping deregulation, the gouging of consumers, our global financial meltdown and the subsequent looting of the U.S. Treasury." (13)
In his book, Democracy Incorporated, Wolin describes how these important institutions from think tanks, universities, and news media as well as the government were taken over or suppressed, and brought into a central control to create a total center of power, a totalitarian state, like Nazi Germany, Fascist Italy, or Stalinist Russia, which monopolized the power in order to restructure society.
Wolin considers how a new form of totalitarianism can arise in a superpower, which loses its sense of limits and morphs into an empire out of touch with reality. It's a country where civil rights, due-process of law, and habeas corpus are revoked and imprisonment and torture are sanctioned. It's a place where a vice president can publically boast of supporting this torture and "new world order." Government intelligence agencies produce fictional reports, as happened in W's administration, in order to please the president, who, in turn, pleases corporations, like Big Oil, by attempting to occupy the world's second largest oil reserve. In order to obtain more financial sponsorship, politicians, news media, universities, and think tanks provide corporations with the news and information they want the public to hear.
"Inverted totalitarianism, in contrast, while exploiting the authority and resources of the state, gains its dynamic by combining with other forms of power, such as evangelical religions, and most notably by encouraging a symbiotic relationship between traditional government and the system of "private' governance represented by the modern business corporation. The result is not a system of codetermination by equal partners who retain their distinctive identities but rather a system that represents the political coming-of-age of corporate power." (14)
Take the North Atlantic Free Trade Agreement. NAFTA was signed by George Bush, Sr. in 1992 and put into effect in 1994 by Bill Clinton, making it a bipartisan agreement. It encapsulates many of the false assumptions that the prominent, and, unfortunately, influential policy makers of the last fifty years—from Volker to Greenspan and on to Bernanke—have blindly advocated while advising stately politicians.
Policy makers created NAFTA based on erroneous ideology. The "free trade" part of NAFTA reflects the old hymn that free markets do godly miracles when left to their own entrepreneurial devices. Years later, Canada might boast as a winner relatively speaking, if there was one. Although U.S. businesses justified the agreement as a means to become more competitive by reducing labor costs, even though America lost millions of middle-class jobs, devalued wages, and increased inequality. Meanwhile, other industrialized countries like Japan keep their own citizens employed by innovating and by responding to market demands, instead of the short-term profits gained momentarily by short-term labor cuts for which American management is infamous. Consider the innovative electric car, the Nissan Leaf, compared to the now extinct Tyrannosaurus Rex, GM's Hummer.
Mexico lost the most from NAFTA. Mexico's American-trained economists expected that the agreement would boost manufacturing and economic growth by setting up the maquiladoras. Many peasants moved from their farms to the U.S. factories in border towns and worked with hardly any labor laws to protect their interests only to see that the U.S. firms decided to outsource their work to countries where wages were even lower at the time in India and China. Consequently, many Mexican peasants lost their jobs and they could not return to their peasant farmlands because the U.S. farms began exporting to Mexico large quantities of agricultural products at even lower, subsidized prices.
Castenada describes the affects of NAFTA and how Mexico already resembles an "inverted totalitarian" state:
"And this would happen, they warned, not in a nation magically propelled toward the First World by irresponsible headlines or high-level trade agreements, but in a country as firmly anchored as ever in the Third World, a country consisting of several segregated nations, plagued by injustice and inequality, authoritarianism and corruption, poverty and marginalization. The Chiapas uprising became a symbol of that crisis—which was not, however, confined to Chiapas." (15)
NAFTA motivates peasants to cross the border. The next job opportunity for most any blue collar Mexican worker is to cross the border for jobs paying less than minimum wage or to stay in Mexico to take a job in the only rising industry—the drug cartels that manufacture and traffic illegal drugs. The drug cartels operate much like any large corporation, except that their products are illegal, which attracts entrepreneurs only slightly more ruthless than the leaders at such businesses as XE, Halliburton, BP, or Goldman Sachs.
From Castenada's description, in Mexico, there are few regulations for the large corporations. It is a dream paradise model for many of the American neoliberal elitists. If they visited Mexico they would find that the government even provides guarantees for many monopolies such as Carlos Slim, who became one of the richest men in the world by acquiring almost all—94 percent—of the telephone companies in Mexico. With proper "arrangements" made with the public officials, many billionaire monopolists thrive in Mexican industries. One company owns 70 percent of the tortillas/cornmeal market, another controls Telmex telecommunications, there is the now state-owned Pemex oil, and only two corporations hold 80 percent of all pharmaceuticals, and on and on. Better yet, for the wealthy, even religion holds a monopoly by the Catholic Church keeps the Great Unwashed gullible and submissive to the providence of God's will. Those in power stay in power and garner larger and larger pieces of the pie.
Meanwhile taxes on these monopolies and oligarchies are extremely low compared to income taxes on the dwindling middle class. Almost half the population—more than 102 million—lives in poverty. The rich continue to gain more wealth while the peasants sink deeper into poverty. (16)
NAFTA did serve at least one benefit for Mexico. With the free trade, it is easier to export drugs into the U.S., making it the most lucrative industry, second only to the rapidly depleting oil business. As the drug business increases in value, the Mexican government takes greater pieces of the profits in the form of bribes or "la plaza," in which the drug lords pay government officials not to intervene in the commerce, while legitimate corporations pay a tribute—called lobbyist contributions in the U.S.—to gain favors.
The drug industry overwhelms the Mexican government. Once the drug industry rose into the billions of dollars, the government became weaker, less able to control its own army because the drug lords now earn more money, and able to bribe public officials and law enforcement at all levels, they conduct their business as a true "free market," one without any civil authority, much less regulations, and the competition between the cartels rages to all-out civil war, where drug dealers use all types of violence imaginable--kidnapping, rape, murder, torture, beheadings—to gain market share over the competitors. Since January, 2007, 29,000 people have been killed in drug-related activity. (17) The growing drug violence boosts the U.S. weapons industry, which conducts business without much oversight.
When a country is unable to protect its own citizens' interests, it is a failed state. The Mexican government is too weak to corral the violence and lobbyist money—bribes—to influence public officials, and unable to protect the regular citizens; it is a failed state. Now officials in the Mexican army partner with certain cartels in order to obtain a substantial part of the profits. For the time being, the Mexican army provides favors for the Sinaloa cartel and against the Juarez cartel.
Like all countries, Mexico's history is unique. If it ever had a functional democracy, it was only during brief and unusual moments. Since it transitioned from a monarchy to a pseudo-democracy, it has always been an "inverted totalitarian state," where the elite reign over the lower classes, and where the public officials serve their fellow elites, the barons of industry. If the U.S. continues on its current trend toward a system in which the Democrats and Republicans serve the interests of corporations instead of the citizens, we, too, will reap all the benefits of pseudo-democracy as in Mexico, where lobbyist money speaks louder than votes.
Mexico operates with a truly free market. The government hardly intervenes except to help well-paying organizations. Its religious culture keeps the lower classes submissive and more interested in the next life than this one here and now. It's an ideal business environment for the American neoliberal elitists.
(1) Mayer, Jane, "Covert Operations," The New Yorker, August 30, 2010
(2) Wolin, Sheldon, Democracy Incorporated, Princeton University Press, 2010, Kindle edition. Preface.
(4) Wilkinson, Richard and Pickett, Kate, The Spirit Level, Bloomsbury Press, New York, 2010 and at The Center for Budget and Policy Priorities.
(5) Taibbi, Matt, "Obama's Big Sellout," Rolling Stone Magazine, Dec. 10, 2009.
(6) Reich, Robert, Supercaptialism, New York: Vintage, 2008, page 5.
(7) Bracevich, Andrew, Washington Rules,
(8) Smith, Ives, Econned, New York: PalgraveMcMillan, 2010, pg. 19.
(9) Sharlet, Jeff, The Family, New York: Harper Perennial, 2008, pg. 100.
(10)Castaneda, JorgeG.The Mexican Shock, New York: The New Press, 1995, pg. 34.
(11) Lewis, Michael, The Big Short, New York, W.W. Norton Co., 2010, pg. 197.
(12) Smith, Econned, Ibid., pg. 43.
(13) Hedges, Chris, Democracy in America Is a Useful Fiction, Truthdig (blog), January 25, 2010.
(14) Wolin, Democracy Incorporated, Kindle edition.
(15) Castaneda, The Mexican Shock, Ibid., pg. 80.
(16) Llana, Sara, "Calderon's Challenge: Confronting Monopolies," Christian Science Monitor, Jan. 23, 2007
(17) "Mexico under Siege," Los Angeles Times online