Control By The Few

I have a question: Do you think a capitalist democracy provides for the welfare of all the people?

The answer is: No.

It is a myth that a capitalist democracy has brought economic prosperity to the people of any country including the U.S. Any improvement in the welfare of the working class was fought against bitterly by the capitalists. The struggle made by the labor movement from the 1930's on to improve their standard of living is what made life bearable. It was no gift from the corporate capitalists. Organized labor leading often times violent class struggles brought improved living standards to the workers. The violence was perpetrated and paid for by the corporations through the use of goons and strikebreakers. And, of course, the main stream media always blamed labor for the violence.

Yes, there are those who prosper under corporate capitalism, for example, the upper 10% and the upper 1% who prosper shamelessly as we have seen. Obviously the plutocracy protects those at the top and ignores those at the bottom. At the same time that obscene fortunes amass at the top, millions of Americans are living below the poverty line and middle class family income in the last 20 years has decreased. Millions have lost their health care, their pensions and their homes.

Democracy and capitalism are actually in constant conflict. We really can't have both. When democracy really works, the people benefit. They are more prosperous and their standard of living goes up. Entitlements and social welfare are an accepted part of the economy. The corporations, on the other hand, prefer poverty for the masses. Why? Because the poor are powerless and are not a threat. Corporation profit increases enormously when the poor work for less. As a result, poverty is increasing world wide while the wealth of billionaires is increasing exponentially. So to prevent Democracy from working at its best, the main street media sabotages it with misinformation, ballyhoo and amusement.

The corporate capitalists utilize another wrinkle to protect and increase their profit. They transfer their production to the sweat shops of South East Asia where the poverty stricken population have no option but to work the for very low wages set by the contractors who are hired by the corporations. The corporations are thus freed from paying high wages and benefits and so again maximize their profit.

As we have seen corporate capitalism has a chronic problem of over production and under employment occurring periodically. A high percentage of unemployed and underemployed reduces the ability of the populace to buy the goods and services produced. At the same time there is a vast accumulation of capital looking for a place to invest. Since there weren't any, the power brokers made something up. They poured it into sub-prime mortgages, highly leveraged derivatives, hedge funds and whatever. In 2008 it all came crashing down and that's where we are today.

Now the U.S. Corporate Capitalists own Congress and “greed is good”. The Republicans show no interest in the unemployed but show intense interest in protecting tax cuts for the rich.

The “Karl Rove” of the 19th century was a man named Mark Hanna. He used his political and financial skills to buy the office of President for William McKinley, an essential non-entity. Hanna is remembered for the following statement:

“There are two things that are important in politics, the first is money and I can't remember what the second is”.

References:

Michael Parenti. Znet
Wikipedia

Government Is The Problem

How about this picture? We are at a Tea Party rally in the South. Sarah Palin is the speaker. The audience is made up of elderly whites only. A large number of the gathering are breathing oxygen from a tank while sitting in motorized wheel chairs (scooters). All paid for by Medicare. And guess what? The seniors are ranting against government spending, while Palin intones the Ronald Reagan mantra: “Government is not the solution, government is the problem.”

This is a moment to remember. You are witnessing the opening salvo of the ding-a-ling revolution. The problem is they are all full of horse-pucky. They are around the bend, suffering from paranoia. But these are the crazies that the right wing Republicans are using to limit Obama's power and eventually get him out of office. It is becoming more and more obvious that it isn't “socialism” or “welfare” that bugs these people. Rather it is the fact that a black man was elected to the highest office in the land. That is what these “redneck crackers” can't handle. "How in the world did a “black Moslem” from Kenya become President of my country?" It is not your country. It is our country. So what do these yahoos want? "They want their country back."  But, nobody took it.  Instead, they are giving it away to the right wing Republican power brokers.

So it is not the socialists who are stealing their country. It is the super-capitalists. They support lower taxes for the rich and no government programs for the poor. If the Tea Party Wingnuts think they are going to get their country back in the polling booth, they are sadly mistaken. They don't recognize that the country is controlled by a deeply embedded plutocracy that prevents political change of any consequence. The Tea Party fantasy is that it is a third party but it has no chance of surviving. It will be run over and wrecked by the entrenched 2-party system. It will be swept away by the Republican party first and then the remainder by the Democrats until there is nothing left.

We should keep in mind, however, that the Tea Party people are conservative Republicans who supported for 8 years the Bush doctrine of lower taxes for the rich and no regulation. So in effect, they have contributed by their vote to the economic crisis and the national debt. They rant about government spending now, but never a word while Bush was in office. There was a surplus before Bush came on the scene and he turned it completely around with lower taxes and a 3 trillion dollar war that was launched with lies.

Paul Krugman, the economist and NY times columnist, has pointed out that the Tea Party is not a grass roots movement, but rather is AstroTurf (a fake grass roots movement) and the events are manufactured by a right wing Republican, former Congressman, Richard Armey.  Financial support comes from the billionaire Koch Brothers and Koch Industries through the organization, Americans For Prosperity. The AFP is an ultra right wing political organization started by David Koch in support of very little government and hair-brained free market policies. The Koch Bros are worth a 100 billion dollars and have given 100 million to the Tea Party organization. They own numerous oil refineries, 4000 miles of pipe lines, Georgia- Pacific Lumber, Stainmaster Carpet, Dixie Cup, and Brawny Towel. The Kochs are hard line libertarians who fight government. They use the anger of the Tea Partiers for their own purpose, by training “rednecks” to fight against regulation, energy reform, environmental reform and finally to wage all out war against Obama.

FYI - the Koch Bros are known to support zany causes, to mass produce bad ideas, and are just a little daft. Their father, Fred, was a founding member of the John Birch Society. Some of you will remember those crazies. I think you get the picture.


References:

Frank, Thomas. What's The Matter With Kansas.
Green, David. Common Dreams.
Mayer, Jane. The New Yorker.
Taibbi, Matt. Rolling Stone.
Wikipedia

Right Wing Fantasies

All right, here's a question for you.

What makes Americans so gullible and simple-minded?

Well, they are gullible because they believe what politicians tell them. And they are simple-minded because when angered and frustrated, they foolishly go after the wrong cause. They do not perceive that economic issues are where the problem lies. A spiritual crisis caused by reputed “moral decadence” may exist in the minds of some misguided individuals but the real crisis is the right wing itch to wreck social security, social welfare and eliminate the national debt. When the level of hatred towards government becomes intense enough, where do these simple-minded souls turn?

Since they believe that poverty is an absence of spirituality, they go to the protestant sects, e.g. Assemblies of God and Pentecostal churches for help. Since they believe we are dealing with a crisis of the soul and not economics, we need to become “virtuous” and build the “Kingdom of God”. For them, low wages, hunger and security in old age are not significant.

In Washington D.C. there is a Christian group known as the “Family”. The senior Senator from Kansas stays with them when he is in town. Although the Senator himself is not a member of Opus Dei, he converted to Catholicism through an Opus Dei priest. Opus Dei is an ultra right wing sect that was active during the Franco regime in Spain and still is widespread in Catholic circles both in and out of the U.S. The "Family" actually studies the organizational outline of Hitler's ideology. They invite right wing legislators, capitalists and dictators from around the world to join in their discussions.

It is ironic that the poorest followers of these extremist sects have the gall to paint a brush-like mustache on an Obama image and label him Hitler for supporting welfare legislation, while the wealthiest super-capitalists are secretly studying Hitler's grand plan.

Now those legislative power brokers involved in these “brain sick” activities are 100% pro-business. They support deregulation, no government and the destruction of the welfare state. The Christian zealots believe that they are bringing America back to God but at the same time support pro-business legislation that increases the profits of the plutocracy. They believe that we are having an affliction of the "crisis of the soul" not an economic crisis. The power brokers use them to obscure the self interest of the very people who need help the most. The free market system is "sacred" especially if it produces policies where "Profit precedes God".

The leadership of these extremist cults deplore American culture for its vulgarity and lack of "family values" but scramble it up with corporate capitalism and it winds up on the right wing Republican platform.

So what does the extremist Republican platform in its tangled reasoning offer to the voter? In order to counter the "immoral decadence" of our society, the platform opposes gun control, homosexuality and abortion. Since evolution, according to the right wingers, is not a fact but rather a theory, it will not be permitted in the school system curriculum. Creationism is the preferred fantasy. The platform also calls for no government interference in health care, for privatization of social security and tax cuts for the rich.

So as Einstein once said, “Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe”.


References:

Hedges, Chris. Truth Dig.
Thomas, Frank. What's The Matter with Kansas?
Wikipedia

Occupation By Any Other Name

Hey, fellow Americans, you are finally going to get something you voted for!

Really, like what?

Well, your President is pulling out of Iraq.

But wait a minute , something doesn't sound right. 90,000 combat troops are leaving by the end of August. What happened to the other 50,000? Well, bad news, they are staying. You see we have hundreds of military bases scattered throughout Iraq a portion of which will be either closed or manned by those troops remaining to provide security and training for the Iraq Army. We also have the largest embassy in the world in Iraq. It's actually the size of Vatican City (80 football fields). The people working there require security. So our Secretary of State, Hillary Clinton, has requested the State Department to provide a maximum of 7000 special operation forces hired through private contractors similar to Blackwater for “diplomatic security”. In short we are downsizing the occupation and calling it something else like “diplomatic security”. And a number of these bases will become “enduring posts”. (a euphemism for forever and ever). Recently 20 year contracts to run Iraqi oil fields were given to a number of private companies . Obviously the U.S. has no intention of really leaving. We are, therefore, privatizing the occupation by hiring armed mercenaries to replace the troops that are returning home. The mercenaries are paid well for dying while a majority of U.S. troops are finally relieved of the stress of combat.

So was it all worth it ? The short answer is no. Iraq remains a disaster. The situation is still unstable. The puppet leaders cannot form a government. Potable water is limited as is electricity. Oil production is still below what Saddam produced. Millions of people have migrated to Syria and Jordan. The American Empire made the situation in Iraq worse.

The mercenary special operation troops will continue to chase down “terrorists” paid for out of the deficit budget and the military black budget.

And what is happening in Afghanistan? According to some observers there are two wars going on there. One is the war reported by the main street media. The other is the special operation war that are night time raids and go unreported. This is the one where civilians get killed if they get in the way of the target. There is a lot of public talk by the military about “ reducing civilian casualties” but these night time raids which we lie about are responsible for many civilian deaths. The Afghan forces avenge these deaths at a rate of 6 to 1, according to recent reliable reports.

So let's keep in mind as it does bear repeating: “ Politicians are like talking dogs in a circus, interesting, but no sane person believes what they say.”


References:

Common Dreams, Guardian UK.
Democracy Now, Jeremy Scahill.
Alan Furst.

A Few Little Mistakes

The arrogant Tony Haywood, the CEO of British Petroleum, announced to the world after a major spill that was dumping approximately 100,000 barrels of oil into the Gulf of Mexico that the environmental impact would be very small and that the spill was tiny compared to the size of the ocean. And, oh yes, he would like to see this over with because “I would like my life back. The lives of thousands along the coast had already lost their livelihood and sure as hell would like their lives back.

Since the spill, mental health problems, namely, depression, anxiety and anger have soared as well as spousal abuse and alcoholism among fisherman on the coast. Lately there has been an increase in suicidal thoughts and some actual suicides, very similar to the crisis situation caused by the Exxon Valdez tragedy. Mental health clinics have been established along the coast for counselors and therapists to assist those workers who are in crisis.

The company reports in 2010 1st quarter profits of 61 million dollars daily and it has spent 33.8 billion dollars to explore for new oil and gas deposits during the past 3 years. However, spending on research for safety, accident prevention and spill response has been paltry. To top it off, BP has the worst safety record of all the oil companies. They just don't give a damn about the public or the workers. According to Hayward , “Our primary purpose in life is to create value for our stockholders.” And by the way , keep the dividends coming.

Giving the devil his due, Tony Hayward admits that he might lose his job because “we made a few little mistakes early on.”  One mistake that should be mentioned was an automatic shut off valve that was not installed. All the other companies claim that they never fail to make that installation. BP is known for cutting corners to benefit the bottom line and, oh yes, to keep the shareholders happy.

The problem is there is no easy extraction of oil anymore. That is why the oil companies are drilling in deep water. And it is not safe. Just recently in Australia there was an oil rig explosion that spewed millions of gallons for ten weeks. A relatively short time span because they were drilling only at a 250 foot depth. BP was drilling at 5000 feet. The oil companies, of course, won't admit it but they just don't know how to stop a blowout in deep water or how to clean up a massive spill. There are federal regulations but BP violates the regs and pays the fines. The fines are in the millions but it is “chump change” to a company that reports a daily profit of 61 million dollars

As a former unenlightened Republican VP once said, “We're all capable of mistakes but I do not care to enlighten you on the mistakes we may or may not have made.”


References:

Wikipedia
Google

The Failings Of Liberalism

Let's take another look at “family values”, how it got started and its link to the demise of the liberal reform movement. You probably don't remember the easily forgettable and barely adequate Republican Vice- President who served with Bush Sr. in 1989. His name was Dan Quayle, a hopeless dipstick. If anyone cares, I am preserving a few of his inane quotations for posterity: “ The future will be better tomorrow.” “We don't want to go back to tomorrow, we want to go forward.” “ I have made good judgments in the past. I have made good judgments in the future.” “ Republicans understand the importance of bondage between mother and child.” There are many more just as cockeyed.

I am remembering him today because he was the one who introduced the BS called “family values”into Republican politics. He cited the TV program “Murphy Brown” featuring Candice Bergen as a single professional woman who derided the importance of fathers and bore a child alone. Quayle attacked the show as an example of the “poverty of values” and the rejection of the “nuclear family” characteristic of American culture.

Over the years the concept became an important part of the conservative political platform, namely the endorsement by the U.S. Government of Christian values and Biblical truth. The Christian Right picked up the ball and are still running with it. The liberals, on the other hand, have been totally unable to counter effectively this right wing ploy. But there is a reason.

It all started in the 1970's when the Democratic Leadership Council (DLC), the organization which eventually became associated with Bill Clinton and Al Gore, decided to increase the flow of money by switching their concentration from the poorer blue collar union worker to the more affluent white collar professional particularly those who were liberal on “social issues”, for example pro-choice, universal health care, living wage, family planning and many more.

The next step then was to seek the support of corporations for their campaign contributions. Financial support from this source far exceeded what was possible from trade unions. It was the former Senator, Bob Dole, who once said that poor people do not contribute to political campaigns. So the Democratic party became more friendly to business interests confident that the “working class voters” had no other place to go. After all, the Democrats were slightly better on economic issues than the Republicans. So the DLC drops the “class warfare” language and becomes similar to the Republican representatives of the upper middle class. Thus the two parties become more tweedledee and tweedledumber than ever. I believe we are witnessing today not a dimes worth of difference between the two parties. Can you think of a stupider strategy?

Liberalism is no longer relevant to the traditional base of the party. So what the liberals have always stood for, namely, economic security and social welfare has been relinquished at a time when the country is in critical need.

To quote the dork, Dan Quayle, “I believe we are on an irreversible trend toward more freedom and democracy - but that could change.”

References:

Frank, Thomas. What's The Matter With Kansas. 2004.
Wikipedia
Google

The Demise of Liberalism

It is often intriguing to consider just how these "comatose bozos" get into public office, whether it is the state legislature or the U.S. Congress. It would not be likely if a significant number of voters were not voting against their own self-interest. Now how does this happen? For example, remember the uninformed and confused individual who went into a Unitarian Church and shot up the place tragically killing and wounding several unfortunate people. He selected that church because he learned probably from Fox News that is where Liberals congregated. And it was the Liberals who were wrecking the country. He was totally oblivious to the fact that it was the Liberals who were supporting legislation that would be beneficial to him, not the right wing Republicans. But it is the right wing Republicans that have convinced working people that Liberals are destroying the "American Way of Life" because they do not believe in “family values.” It's a kind of culture war of rich versus the culture of the poor. Religious conservatives use the family value ploy to promote Christian morality and actually want government to endorse that morality.

The Republican argument is that American moral values are being destroyed by the Liberals who represent the Eastern intellectual elite. In this way they distract working people from the economic issues that directly affect them. The problem is that there is no longer a strong, aggressive labor movement to keep workers focused on the real issues. The Republican scam artists have a free rein. This is how a state like Kansas with many poor workers votes Republican every election. (Red State) And the Liberals have been totally unable to counter “the corporate assault on workers.” There is no organized protest and no effective peace movement. The Liberal movement is moribund.

The last place to look for moral leadership is in political parties. Politics is a dirty business. As Molly Ivins said, “if you want moral leadership, try the clergy. That's their job.” RIP, Molly.


References:

Frank, Thomas, The Wrecking Crew.
Frank, Thomas, What's The Matter With Kansas.
Ivins, Molly.

The Madness Of War

In 1946 Hermann Goering at the Nuremberg Trials outlined the quintessential method to get support for a war that the people of a country do not want. Since the leaders make the policy, the people get dragged along by lying to them. They are told that they are being attacked and the antiwar protestors are accused of a lack of patriotism thereby “ exposing the country to greater danger.” So you see how easy it is for any government whether it is a democracy or a dictatorship to take the country to war. Why do I say that? Because just about every U.S. President since World War II has used similar tactics to get us into a “hopeless, unnecessary and costly war”, e.g. Korea, Vietnam, Dominican Republic, Panama, Grenada, First Gulf War, Iraq and Afghanistan.

By now most informed people know that Vietnam was a prime example of how lying got us into a war. Ben Bradlee , formerly Senior Editor of the Washington Post 20 years later admitted that the Vietnam conflict was a lie from beginning to end. Daniel Ellsberg of the Pentagon Papers fame admitted that when he first took the job of special assistant to the Pentagon official in charge of Vietnam, he marveled at his boss's ability to lie poker faced to the press. Ellsberg would watch and listen for an hour to “whoppers” handed out to the press. And the press soaked up the lies not having a clue as to how flagrant and consistent they were. The press in turn passed on this misinformation joyfully to the public. This was part of the build-up to war.

Ellsberg again reported in 2004 during the Iraq War that again we had been lied to and were now in an endless and destructive war comparable to Vietnam. Officials who understood what was happening refused to speak out and just repeated the lies.

Let's consider now the invasion of Panama led by Pres. Bush Sr. There was a great deal of fog consisting of lies, inaccuracies and misinformation created by the U.S. Government and spread by the press. For years General Noriega, the dictator of Panama, was involved with CIA knowledge and acceptance in drug trafficking as long as the revenues received were used to buy arms and then transshipped to the U.S. backed contras who were fighting the Sandanista government in Nicaragua. Once Noriega changed his mind and stopped supporting the contras, he then became that evil man who bought and sold drugs. He was then presented to the American public as a bad guy that we must eliminate. So in order to do that we needed to first invade Panama. The reasons given were to protect American citizens, to preserve democracy , to preserve the Canal and to capture Noriega. Well, as usual there were no American citizens in danger, there was no democracy in Panama and the Canal was not in any danger. Because of the bombardments that followed the invasion 25000 poor people were made homeless and 1000 civilians died. In the end Noriega was captured. And we left the country in chaos. Furthermore, to use Noriega's drug trafficking as a weapon against him when we were directly involved in it is the worst kind of political hypocrisy. And the mainstream press just lapped it up.

Since lies continuously repeated get us into war and keep us at war , perhaps we should look carefully at what wars do to us as a people, both soldiers and civilians. Modern medicine has made it possible for severely wounded front line troops to survive. The ratio of wounded to dead has improved sharply. For example, in World War I and World War II the ratio was approximately 2 wounded to 1 death. The Vietnam War saw a slight increase to approximately 3 wounded to one fatality. However, in Iraq and Afghanistan the ratio jumped to 7 to 1 by far the largest in our history. But there is a downside. Many of these survivors have suffered horrific injuries that require long term care in Veteran facilities and years of family assistance.

One of the most common injuries of the Iraq War is brain trauma caused by blast waves and diagnosed as “traumatic brain injury” or TBI. This is significant because in previous wars deaths from this type of explosion was 75%. Now we can save the majority . However, unfortunately these injuries depending on the severity can inflict permanent damage that requires continuing care. Other horrific injuries are multiple amputations, burns, blindness and permanent spinal injuries.

Probably the longest lasting non- physical injury is mental health disability caused by combat stress. Many combat veterans report continuing psychological problems throughout their life. Continuing health problems and the use of drugs and alcohol are common due to prolonged depression. Post- Traumatic Stress Disorder (PTSD) is widespread among front line veterans. Suicide among Iraq and Afghanistan veterans is the highest in 16 years. Many of these soldiers committed suicide while still serving in those countries.

These mental and physical disabilities experienced by veterans can be overwhelming to both the soldier and his family. Many of them are unable to work and mental illness can cause physical illness as well. Chronic pain is a problem for those with physical disabilities and require daily pain medication. Also many require assistance in daily living activities.

The death, destruction and astronomical cost of war demand that we find alternatives.We cannot allow the War Dept to hide the number of casualties from the general public in order to prevent mass protests against the war. In addition hiding suicides and desertions , for example, is deliberate concealment to “protect” the public from the pain of the conflict.

As one observer commented: “ Political leaders want live babies so they can raise them to be dead soldiers.”



References:

George Carlin
Hedges, Chris. What Every Person Should Know About War. 2003
Hedges, Chris. War Is A Force That Gives Us Meaning. 2002
Solomon, Norman. War Made Easy.2005
Stiglitz & Bilmes. The Trillion Dollar War. 2008

PDF for 2005 - 2009

For those who would like copies of my postings there is a link in the download section for a PDF file containing all the posting on El Gato from 2005 - 2009.

The End Is Near

What we are facing today in the U.S. is on the one hand a plutocracy where the wealthy few control the government and on the other hand a circus freak show composed of idiots , hopeless dipsticks and just plain liars. Our vote counts for nothing. We voted to end the the wars, to provide jobs for the jobless, to end housing foreclosures, to provide health care for everyone, to control Wall St. gambling and what happened? Nothing. The corporations have injected so much payola into the Congress that the politicians are fearful of voting for any laws that would benefit the middle class and the poor. Further, they refuse to enact any legislation that will regulate the highly leveraged speculation of the enormously wealthy and powerful financial corporations of Wall St. No regulation means banks will continue to rob us over and over. Since the legislators that supposedly represent us are unable to act, we are no longer a democracy but we are headed instead toward “totalitarian capitalism”. Hang on to your hat. The Empire is ended. We are about to descend into chaos. We will be poorer while the system disintegrates.

Now let's look at some of the characters in the freak show. They are the Tea Party Protestors, Russ Limbaugh, Sarah Palin, Newt Gingrich, Fox News, and Glenn Beck. These people are the right wing representatives of the Republican Party who belligerently combat government regulation and are linked to the thievery of Wall Street and the larceny of the “for profit” health care organizations. The Tea Party Protestors are composed of stupid, ignorant no-nothings. Russ Limbaugh said he will leave the country if a Federal health plan was passed. So where was he going? He picked Costa Rica, where apparently unbeknownst to him there is a national health plan that covers everyone. Maybe he did his homework because now he says he is not leaving. Too bad.

Sarah Palin admitted that as a child, she and her family would cross the border into Canada to use their health plan free of charge. Not too long ago, she advised Canadians to drop their National Health Plan. Is she “cuckoo” or just a hypocrite? Maybe both. We are all familiar with the sanctimonious Newt Gingrich and the people on Fox News are pathological liars who deliberately deceive rather than inform. Glenn Beck is obviously mentally ill.

Nonetheless, 35,000,000 people or more are struck dumb by these buffoons and believe what they say. They are allied with the Christian Right, a wing of the Republican Party. Millions of jobless who have no hope are easy prey for the religious fanatics. The program of the Christian Right is an alliance with the wealthy power brokers to control the State and destroy democracy.

As Molly Ivins once said: “Just when you think there wasn't a dimes worth of difference between the two parties, the Republicans go and prove you're wrong.” Rest in Peace, Molly.


References:


Hedges, Chris. American Fascists. 2006
Ivins, Molly. Quotations
Prins, Nomi. It Takes A Pillage. 2009

Make It Cheap

It should be clear by now that free market globalization is in actuality “crony capitalism” whereby politicians hand over public wealth to private corporations in exchange for political support. This model is used in impoverished nations throughout the world to provide loans to desperate economies channeled through the International Monetary Fund (IMF) and the World trade Organization (WTO) which the U.S. controls. The foundation for the model is deregulation and privatization. It very soon becomes apparent that globalization is in fact simply unscrupulous corporatism.

The manufacturing corporation seeks to produce its product as cheaply as possible by using the labor of poverty stricken Third World countries. In order to achieve this goal, it was necessary to give up the ownership of their productive facilities and the employment of workers. Instead production was outsourced to contractors and sub-contractors at a less than livable wage in the poorest of countries. For example, if companies, such as Wal-Mart, Ralph Lauren, Liz Claiborne, K-Mart, Nike, and Reebok were contracting for labor in China where at one time 87 cents per hour was considered a living wage by the government, some U.S. Companies paid as little as 13 cents per hour. The mark- up on many of the products jumped from 100% to 400%.

The CEO's saw this as an opportunity to decrease their costs, increase their profits and above all develop a brand name that consumers would buy. Soon consumers no longer bought the product but rather they bought the brand which represented a life style. The life style was introduced through advertising, design and marketing. All the products manufactured carried the brand logo. You might be middle class but the brand logo gave you upper class pride of ownership. The logo was there for all to see, whether it was Levi, Gap, Tommy Hilfiger or Eddie Bauer.

When complaints came in about conditions in the sweat shops and less than a living wage for the workers, the corporation spokesman could say that they did not employ anyone. The contractor was responsible. He owned the factory and set the pay scales. The corporation tells the contractor how to design the product but to “make it cheap.”

All the costs of building factories, buying machinery and labor are transferred to the contractors and subs. The most profitable corporations are running from the costs of production. Factories re-
quire maintenance , employees cost in wages and benefits. By ridding itself of these expenses, corporate profit rises enormously. Money is then available to design and market brand logos.

As for the workers in the sweatshops,for example in Honduras in 2003 garment workers were paid 24 cents for each $50 branded sweat shirt. Most contractors pay the worker less than the required living expenses. Nevertheless, if the worker does not take a job with the contractor, his only other option is backbreaking labor, subsistence farming, prostitution, trash picking or starvation. Today because of the economic crises world wide, many of these marginal workers are being laid off as sales dwindle.

Obviously free trade agreements do not promote free trade at all but only protect multinational corporations from competition by local industries that may be unionized. Free trade agreements only reduce tariffs and barriers to entry to the benefit of the corporation.

It's axiomatic that the people at the top have always had a hard time seeing those at the bottom. As Molly Ivins said, “ they practically need a telescope.”


References:

Molly Ivins
Klein, Naomi. No Logo. 2009
Wikipedia

Volker Speaks

President Obama may have finally seen the light. He is considering a recommendation by former Federal Reserve Chairman, Paul Volker, to change the banking regulations to prevent commercial banks (the banks in which you and I deposit our money) from acting also as investment banks. This would in effect restore the Glass-Steagall law that FDR in 1933 put into place.

For 60 years it worked extremely well until 1999 when President Clinton signed into law a bill introduced by Senator Phil Gramm, the "Senator from Enron", that did away with the regulation. This allowed investment banks to merge with commercial banks and use the deposits (yours and mine) as collateral for wild speculation; to gamble in the Wall Street Casinos.

President Reagan, instead of reappointing Paul Volker as Federal reserve Chairman put Alan Greenspan in his place. Reagan and Greenspan saw eye to eye ideologically, i.e. the belief in the laissez-faire free market. Of course the supposed "free market" is free only for Wall Street to steal from Main Street. No regulation encourages banking banditos to commit fraud.

Once the banks are separated, the speculating institutions become responsible for their own losses and cannot rely on the Federal Government to bail them out. Instead, in the future, when a bank collapses, we won't have to try to save it but rather, we can liquidate it in an orderly manner or effect a merger with another bank. As Volker puts it, “euthanasia, not a rescue.”

Nomi Prins, a former Wall Street investment banker and financial expert makes the point that “everyone comes to Wall Street for the money.” With money comes power. “No one comes to Wall Street to help humanity”.

For some, greed may be good but greed also kills. It is killing our country. We need regulations to prevent the dissolution of our economy. We cannot allow continuing “unchecked greed” and the race for endless profits and power. The government should support commercial banking by injecting capital for loans to “ordinary Americans”. It should not support speculators who indulge in casino gambling on the back of middle class money and homes.

As George Carlin said, “It is no longer a game when you are winning.” It is deadly serious. And the monster could destroy us all.


References:

Carlin, George.
Ivins, Molly.
Prins, Nomi. It Takes A Pillage. 2009
Prins, Nomi. Other People's Money. 2004
Scheer, Robert. Truth Dig. 2010

Sound The Alarm

Remember the CEO that spent $16,000 on his own personal umbrella stand and he did it by stealing from his own company. This bone head had a neurotic need to accumulate stuff to the tune of $600 million. Cars, houses, travel, furnishings , it did not matter. After he had everything and he ran out of space, he bought another multimillion dollar house and stuffed it with more stuff. The umbrella stand was peanuts. The rest of us just use the bath tub, perfect for wet umbrellas. Right?

Dennis Kozlowski was CEO of Tyco International, a company that sold burglar alarm systems. How appropriate! Dennis and his Chief Financial Officer are now languishing in prison for fraud and theft.

It happens that the burglar alarm business is highly profitable because the taxpayer provides the profit. Now how is that? Well, when you buy the burglar alarm system, you have the option of paying for monitoring. That means when the alarm sounds, a call goes into the monitoring center. The technician then calls you and if he doesn't get the right answer he calls the police. So Tyco collects the monitoring fee, approximately $30 a month average per customer and they don't even call the police because that is outsourced to a monitoring center at a very low cost to Tyco. The profit on the monitoring fee is huge. But when the police check out an alarm, it costs the taxpayer at least $50.00; multiply that by 38 million alarms per year nationally and the total cost to the taxpayer is $1.9 billion. Tyco pockets the profit on the alarm system as well as most of the monitoring fee and doesn't even have to make a call. It is left to the local police department to check out the alarm. Moreover, 99% of the alarms are false and 60% of the false alarms are made by the customer themselves setting the alarm incorrectly or whatever. So we have a gigantic public subsidy to a private corporation that profits hugely from a system that in the end has no purpose.

Tyco's profit increased by a half billion dollars per year due to the free labor provided by the police. If Tyco had to pay this cost, their profit would drop considerably as would the price of their stock. Tyco executives, as a result, would receive less compensation and bonuses. And Kozlowski would have had considerably less money to steal and waste.

Furthermore, while the police were spending more time on false burglar alarms, they were spending less time on murders and other violent crimes. More killers walked away free while the police were checking out alarms for companies like Tyco. So the rich get obscenely richer and you and I get less protection and stuck with the bill.

One comic observer suggested a dead-end business would be a shoe shine stand at the beach. If Dennis ever gets out of prison, wouldn't that be a great career for him?


References:

George Carlin
David Kay Johnston. Free Lunch
Wikipedia