Anger at the bailouts of Wall Street exploded in 2008, and has never gone away- especially when none of the Wall Street executives who committed financial fraud went to jail, few were even fired, and both profits and bonuses skyrocketed in the years following them being bailed out by taxpayers, many of whom were simultaneously losing their jobs and/or homes because of Wall Street. Americans understood that this was big corporate power run amuck, that the rules were rigged in favor of those with wealth and political power.
As bad as the big mega-banks on Wall Street were, though, they aren’t the only companies who are abusing their power. We see it happen all the time, with new examples of egregious abuse of power coming to light practically every week. Here are two of the latest examples that stink to high heaven:
- The 2nd biggest federal government contractor, Boeing, paid no federal taxes last year. Military contractors like Boeing are hugely profitable, as they not only get massive federal contracts with guaranteed profits but are allowed virtually free rein to have cost over-runs and to be late in delivering the products with no penalty. The US Public Interest Research Group estimates that this kind of contractor abuse costs the government more than100 billion a year, and generously pads the profits of companies like Boeing. Meanwhile, Boeing’s workers are being abused as well, as the company is moving work to low wage, non-union states like South Carolina, and forcing the workers at their unionized plants in places like Seattle to take huge cuts in compensation. So they are getting generous federal contracts where they don’t have to deliver at the price or time they said they would, squeezing the hell out of their workers, and now they aren’t paying any taxes? They are making their money off federal largesse, and then exploiting every loophole they can to avoid paying tax dollars.This is rotten, hypocritical corporate behavior as bad as the Too Big To Fail bankers.
- Then there is the world’s largest cable company. Fresh from their takeover of NBC Universal, Comcast is now seeking to buy Time Warner Cable, the nation’s 2nd biggest cable company. This would give Comcast about 30% of the TV market and 38% of this country’s high speed internet users. Comcast would, among many other things, have virtual monopolies over cable service in the nation’s 4 biggest media markets (NYC, LA, Chicago, Philly), as well as the nation’s Capitol. Should one media company really have this much power? The fact that the Anti-Trust division of DOJ allowed the NBC merger was an outrage. Allowing this merger, especially after the last one, would be downright obscene. As Katrina Vanden Heuvel points out “The United States already suffers from worse Internet service, speed, and affordability than other developed countries.” Why? Because of monopoly market power.
Besides arrogance and a complete lack of shame or moral standing, what do the Too Big To Fail banks, Boeing, and Comcast all have in common? They are too big for our own good. Corporations that gargantuan have too much market power to serve their customers well: when you have no other choice but a monopoly provider, you are simply screwed. And they have too much political power as well. The only reason these companies can get away with that they do is the enormous political power they wield over elected officials and regulators.
When Adam Smith wrote about free markets in 1776, monopoly power and monstrously sized corporate conglomerates was not what he had in mind. He believed in the power of market competition, and there is no market competition when these big corporations do insider deals to rig the game in their favor, or when they get big enough to simply eliminate their competitors in market after market. When, in the same era as Adam Smith wrote, America’s founding fathers created a Constitution that they hoped would create a system of checks and balances and distributed power, they weren’t just doing that with the government in mind: they didn’t want any one faction or region or industry or company to have so much power that it overwhelmed everyone else and enslaved us all. But with multi-national companies this big and this powerful, that is exactly the danger.
That is what the modern mega-corporation is doing. They are killing off or buying off their competitors, and they are buying off the government officials who should be stopping them from abusing the rest of us as well. It is no surprise these corporate behemoths lose touch with simple decency: power corrupts, and absolute power corrupts absolutely. These big corporations are becoming dangerously close to having absolute power in too many markets and situations. That is why we see these plutocrats becoming so arrogant, why we see them lamenting how awful anyone who criticizes them is, why we see them going to secretive parties with each other and laughing about how they get to screw the rest of us. Listen to some of these billionaires whine about people who raise questions about the basic fairness of a system where the top 1% are reaping most of the rewards in society:
“The problem is that the world and this country should not talk about envy of the one percent; it should talk about emulating the one percent. The one percent work harder. The one percent are much bigger factors in all forms of our society.”
Sam Zell, CEO of Equity Group Investments
"The uproar over bonuses 'was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that -- sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.'"
Bob Benmosche, CEO of AIG
“It’s a war. It’s like when Hitler invaded Poland in 1939.”
Stephen Schwarzman, CEO of Blackstone Group
“New York is for everybody; it’s for the poor, it’s for the middle-class, it’s for the wealthy. We can’t punish any one group and chase them away. We -- I mean, Hitler punished the Jews. We can’t have punishing the ‘2% group’ right now.”
John A. Catsimatidis, President , Chairman & CEO of Gristedes Foods
Then there’s the special case of one very special man named Tom Perkins, a founding partner of one of the biggest investment firms on Wall Street. Perkins compared the plight of the one percent to the Nazis’ persecution of the Jews, saying “I would call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich.’” He then doubled down on the comparison, saying “when you start to use hatred against a minority, it can get out of control.” Perkins, who apparently never learned to keep his mouth shut, said that “You don’t get to vote unless you pay a dollar of taxes. But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you get a million votes. How’s that?”
How’s that? Really messed up. The sense of grievance in these billionaire corporate executives, who pay less in taxes than in any industrialized in the country, and have more power and privilege than any tiny group of people in American history, is truly astonishing. Having made a career in the world of politics, I have seen a great deal of arrogance in my day, but the arrogance of these corporate execs is far beyond anything I have ever witnessed.
Let me close on a policy note: what these overwhelmingly powerful corporate giants are trying to do now is to codify their worldwide power in a sweeping new way. Progressives who have looked at what the US government is pushing in the Trans-Pacific Partnership are stunned: the proposals coming from the US Trade Representative (himself a former bonus winning exec at Citi) look as if they were written by and for these big corporate honchos. As activists have been pointing out: given citizenship rights by the Citizens United decision, multi-national corporations are now seeking to have the full rights and sovereignty of nations created through the TPP. I will write more about this treaty later this week, but the language being pushed in this treaty goes far beyond the reduction of tariffs: it makes countries subject to corporate demands and lawsuits on a completely new level than they ever have been before. The TPP would be the ultimate example of corporate power run amuck, codifying and far exceeding the most egregious example of corporate abuses talked about above.
It is time for the rest of us to stand up to these corporations and say “Hell, No, we aren’t letting you continue to take a wrecking ball to our lives and our democracy.” If we don’t stand up soon, ot will be harder and harder to do so as these companies gain more and more power over our lives.