May 10, 2006
I'd like to begin my commentary on David Sirota's important new book Hostile Takeover with my strong endorsement of his fine work. Everyone should read it to learn what's really going on around us that affects us all in the most important ways I know and which most people at best only vaguely understand on many if not most of the major issues. Those who read it will learn in stunning and graphic detail how large corporations in league with government at all levels serving their interests and not ours are destroying the democratic pillars of our society. The result now evident when we know the facts David presents is a great irreversible harm to the great majority unless we can collectively act in time to reverse the destructive path and economically downward trajectory we're now on - all planned and implemented by our elected officials in service to their generous corporate benefactors. In his important book, David lucidly explains the problem in detail and gives us an action plan to fight back.
When I first heard about David's new book, I was very eager to read it. I had to be as earlier I wrote and got published a long article by the same title. David's approach and mine covered some of the same ground but differed as well including the subtitles we chose. My approach was to concentrate on the economic consequences of corporate size and dominance to ordinary people. David did the same, but as was clear from his subtitle, he did it by documenting in powerful detail "how big money and corruption" control the political process for their own gain. He also goes further to show how we can fight back to regain the essential rights we've lost. I covered some of that myself in an earlier article I wrote called Democracy in America - It's Spelled C-O-R-R-U-P-T-I-O-N. It's posted on my blog site - sjlendman.blogspot.com. In his book, David gives more than just an account of how our government was bought. He presents the evidence in "handbook" form, exposing the lies and myths politicians and corporations tell us, and gives us an action plan to fight back and win.
David and I both know that corporations exist for one purpose only - to make a profit. I explained in my writing that corporate law mandates that publicly owned corporations serve only the interests of their shareholders and do it by working to maximize the value of their equity holdings by increasing sales and profits. They have to do this and don't have a choice. Should they do otherwise, the companies would likely face legal consequences and their top executives dismissal. But David explains that in a democratic society, government is supposed to serve the people and act as a counterweight to unrestrained corporate power which left on its own could destroy society. At times in the past, our elected government actually passed laws and did that, if imperfectly. But that was then, and this is now - a brave new world order. It's one with giant corporations literally running amuck in charge of everything: writing the laws, making the rules, deciding who governs and how and who serves on our courts. They even have to sign off on it before the nation goes to war. Those wars have nothing to do with national security threats (we've had none since WW II), making the world safe for democracy or deposing tyrants. I've explained this in other writing also on my blog site including exposing the sham of the so-called "war on terror" which is nothing more than a bogus scare tactic to get the public to go along with bad policy. That policy includes waging war, although they're only fought as a last resort when less extreme methods don't work.
Why resort to war? They're fought to control markets, vital resources like oil and cheap labor to help those same corporations make more profits. In that kind of world, there's nothing to stop them from operating as legalized private tyrannies (with their own armies we pay for through taxes) exploiting us (and the planet) for their gain and doing it as another author explained in his book called The Best Democracy Money Can Buy. Those who can pay can play, and those who can't have no say and don't get their way. Money not only talks, it rules the world.
It all means that the political game is rigged by and for corporate America to enrich them and do it at our expense. And they're aided and abetted by the big government they bought and paid for to do their bidding - a kind of incestuous relationship for mutual gain. It's a democracy all right, but only for the privileged few and no one else. Voters at one time may have thought they had a say when they went to the polls, and to some degree they did. But today, about half of them understand they're powerless and don't even bother showing up. Why do it when they know that on election day the real game is big business and big government playing "let's make a deal" - "you scratch my back, and I'll scratch yours." But to play, you better have lots of "scratch." It's an arena where only powerful interests have a say and well paid lobbyists (aka influence-peddling "bagmen") "grease the wheels" of big government to make it work for big business in a "snatch and grab" all you can enterprise that leaves the public largely out in the cold. It's the same story at the federal, state and local levels although the higher up in the bureaucracy it takes place, the bigger the stakes are.
The pubic to some degree knows what's going on and how it's interests have been ignored. At times it's stood by, watched, likely felt overwhelmed and helpless and done little to fight back. But maybe because the pain of bad policy has begun to bite deeply in recent years, David feels that's changing and people are beginning "to demand answers about why our government is selling us out." That's why he wrote the book - to give everyone left out of the political process a way to fight an unfair system and win back the rights and benefits they've lost. He explains the book's intent is to do more than just tell the story of how our government was bought like a commodity available to the highest bidder. It does that and then goes on in "guidebook" fashion to give us the tools we need to fix the system so it works for us.
Hostile Takeover Counts and Documents the Ways the Political Process Has Become Corrupted
David then divides the rest of his book into explaining the enterprise of government as a wholly-owned business subsidiary in 10 separate chapters. In each one, he explains how our so-called elected officials have corrupted their high office to allow their corporate benefactors to exploit us for their benefit. The evidence in each chapter shows no matter how you slice and dice the political system, it always comes out the same way - they win and we lose: more and more until it's down to the nub, and we've lost it all unless we can fight back to recoup and save ourselves before it's too late. David thinks we can do it. First he explains what we've lost, and then he lays out an action plan to win it back. And throughout the book, David gives copious and powerful anecdotal corroboration to make his case for the abuses being committed against us that need redress.
As I explained above, I've also written about these abuses and understand how our corrupted system works. I'm a bit less sanguine than David on the public's insight into the problem or its readiness to act - yet. But David and I are on the same page, and for me he's preaching to the choir. I believe most others, however, don't know or understand enough about how they're being abused, let alone what to do about it. This book is for them and is essential reading. I endorse and recommend it strongly. And I'll go a step further and call it a survival manual and a call to arms. I believe things are even more dire than David explains. I think it essential that the public en masse must begin to act in its own interest and defense and do it soon and effectively. Unless it does, what little remains of our tattered republic and democracy in name only will be lost entirely, and it will be too late to regain it.
Chapter One: Our Tax System - Call It Robin Hood in Reverse
Also call it the great tax scam. David quotes the now indicted and disgraced former Republican House Majority Leader Tom Delay saying on the eve of the Iraq war in 2003 that "Nothing is more important in the face of a war than cutting taxes." I wonder what he was inhaling just before he said that or how stuffed his pockets were with corporate cash. It's hard deciding whether absurd or outrageous better characterizes such an outrageous statement. When Lyndon Johnson was president and needed revenues for his illegal war in Vietnam, he had to raise taxes and still couldn't get enough to pay for it without running up debt and adding to inflation which sent the economy into decline in the 1970s.
David then explains that in today's world as seen through the eyes of Republican ideologues and most Democrats willing to go along with them, cutting taxes has become a religion with no regard for the common sense notion that the revenues only gotten through taxes pay for all the essential services we rely on like schools, infrastructure and everything else. So it only makes sense that when government takes in less revenue, it has less available to provide us with the things we need, expect and rely on in a modern society.
But that's hardly the end of the story. Under the Bush administration, not only have there been large tax cuts, but the ones enacted have caused the "tax structure (to be) flipped on its head." Call it the great transformation of a once-progressive system inverted to take from the poor and middle class and give to the rich. It's a process that began during the Reagan years. But under George Bush it's exploded to become greed writ large and has now even been replicated at the state level. The most well-off who don't need it have benefitted hugely according to the nonpartisan Citizens for Tax Justice. They report that by 2010 after the Bush tax cuts have been fully implemented as they now stand, the top 15% of income earners will have gotten two-thirds of the benefits with the top 1% getting a $600 billion dollar bonanza. On the other end, the bottom 60% will have gotten an illusory less than 18% of the benefits.
That's so because to help offset this handout to the rich, the Bush administration imposed user fees on various services amounting to billions of dollars that affect low and middle income people the most. Also, federal grants to states have been cut and new obligations imposed on them without the proper funding to cover their cost creating what's called "unfunded (or underfunded) mandates." To comply, states have had to raise taxes and fees which again fall disproportionately on lower income people. For these same people, the result has been "now you see 'em, now you don't" tax cuts that amount to a net tax increase and effective loss and lower standard of living for the great majority of the public.
And to make things even worse, Corporate America has made out like thieves from big tax cuts in various forms and their ability, especially under this administration, to exploit legal loopholes and take advantage of lax tax law enforcement. So although the official corporate tax rate is supposed to be 35%, most corporations never pay close to that amount. According to the Government Accountability Office (GAO), 94% of major corporations pay less than 5% of their income in taxes, and corporate tax payments are the lowest they've been in 60 years. In addition, many of the wealthiest companies often pay no tax at all and some of them actually get large rebates. They're added to the already large subsidies most large companies get, otherwise known as corporate welfare or socialism for big corporations and the rich and "free market capitalism" for the rest of us. That's also apparently called "the American way."
The bottom line of Bush administration fiscal policy has been huge budget deficits caused by these unfair tax cuts plus big spending increases (off the books) to fund two ongoing illegal wars plus the new Office of Homeland Security that alone costs $40 billion a year that we know about. So far these policies have fueled overall economic growth and big corporate profits as it did in the 60s and early 70s. But at some point the bills come due and must be paid, although apparently there's no plan to do it. This is a recipe for economic trouble or worse down the road. The lesson is always the same that the price for good times (however gotten or for whose benefit) that were too good or for reckless (or fiscally irresponsible) behavior that was too reckless has always been the same: the day comes when you "gotta pay the piper." Herb Stein, Richard Nixon's chief economic advisor, said the same thing in his memorable dictum that "Things that can't go on forever won't." It's called a day of reckoning but those least able to cope when it comes (which it will) will be the same ones cheated by this administration's tax policies.
Because of the length of my review and eagerness to cover as much of the book as possible, I won't list David's solutions that he enumerates at the end of each chapter. I'll just say, he's on the mark and that a government working for the people and not the privileged few and corporate giants would carefully consider them all and implement most or all of them. Sadly, today and under this administration there's little chance of that happening unless we force them to.
Chapter Two: Wages - Rising for the Well-Off but Stagnation or Worse for the Rest of Us
The minimum wage in this country is $5.15 an hour, hasn't been raised since 1997, and is now at the lowest point it's been since 1949. The people earning it and no more might get along fine if they have no dependents, don't mind not eating much, enjoy camping out year round, love old tattered clothes, never get sick and are able to educate themselves. For the rest of us, that income level is well below the officially stated poverty line that no one can live on but which is artificially kept low for political reasons. That situation is a metaphor for the average working person in the US who, adjusted for inflation, now earns less than 30 years ago even with modest annual increases. David points out the widening gap between low wage earners and the affluent. In my article I had slightly different data than David and will share it with readers. In 2004, I wrote the average CEO earned 431 times the income of the average working person. That was up from 85 times in 1990 and 42 times in 1980 at the beginning of the Reagan years and the Republicans rise to dominance. David and I also used a different figure on what the average CEO now earns annually. He noted $9 million a year and my number was $14.4 million (mine likely included bonuses and/or stock option benefits not in David's figure) in 2001 and rising - plus huge supplemental benefits from SERPS (Supplemental Executive Retirement Plans) that effectively increased their income by half again and all the other special perks corporate executives get but the average working stiff never does. Some companies even pay the income tax for their top executives. I described all this in one section as the US being the unthinkable and unmentionable - a rigid class society and one becoming more extreme all the time.
But along with stagnating wages, essential social services are being cut, especially since Bush took office in 2001. That too is part of the plan to transfer wealth to the rich from the rest of us. It's created a crisis in some areas like vital health insurance needed at all times but crucial to have in the face of the rising cost of health care services and less of them being provided for the needy (and to those of us like myself on Medicare) by a government intent on fighting wars, helping the rich get even richer and destroying the social safety net including the pillars of Social Security, Medicare and Medicaid.
So-called "free trade agreements" like NAFTA and CAFTA have just made it worse. These and the alphabet soup of other trade agreements were sold to the public in the countries adopting them as a way to grow their economies and increase jobs. The result years after implementation has been hundreds of thousands of jobs lost and the realization that these plans were never intended for that purpose in the first place. They were and still are plans for the US and dominant Global North nations to be able to craft a set of binding trade rules overriding the sovereignty of all member states to benefit giant corporations at the expense of working people in those countries. It's worked like a charm, and the terrible carnage it's caused is proof positive. Instead of creating jobs in the US and other Global North countries as promised, jobs have been outsourced or exported to low wage countries including many thousands of higher-paying manufacturing and high tech ones. Even a low-wage country like Mexico has suffered as jobs once sent there have since been lost to even lower-wage paying countries like China, Bangladesh and Haiti. And Mexico's small farmers have been devastated by US heavily subsidized agribusiness that's driven many thousands of them out of business and has done the same thing in India and elsewhere.
The result in the US is services, like jobs at Walmart and McDonalds, now account for nearly 80% of all business while manufacturing has declined to about 14% and total manufacturing employment is half the percentage of total employment it was 40 years ago and falling. Our low unemployment rate the Labor Department reports monthly only disguises the damage done. In the view of some economists, if the rate today was calculated the same way it was during The Great Depression when it rose to a peak of 25% of the working population, the true current figure would be about 12% instead of the most recently reported 4.7%. The current calculation method includes part-time workers who work as little as one hour during the monthly reporting period. It also excludes discouraged workers who wish to work but who've stopped looking because they can't find jobs.
As he does in all his chapters, David goes on to note and explain the myths and lies the public is told to hide a bad and deteriorating situation concluding again with a set of sensible solutions unlikely to be adopted unless the public fights for them.
Chapter Three: Jobs - The Good Ones Are Vanishing and the Poor Ones Don't Pay Enough or Provide Needed Benefits
In this chapter David goes into more detail on what he discussed in the previous one under wages. He provides lots of ammunition to show how much trouble we're really in. One example was from University of California researchers who estimated in 2004 that "up to 14 million American jobs are at risk to outsourcing." An even more stark assessment came from Gartner Research that predicted as many as "30% of high-tech jobs could be shipped overseas by 2015." If they're right, does that mean that formerly high-paid software engineers will now be ringing up the few purchases most people will be able to afford at the Walmarts of the world. Not a pretty picture nor one most readers of David's book or this review would wish to look forward to - unless they love the idea of living in a nation heading for third-world status and run by a government aiding and abetting the downward trajectory.
David also goes on to explain that our government ignores the plight of good jobs being lost and, in fact, effectively endorses the loss through the large subsidies it makes available to the companies doing the exporting. In addition, the safety net of unemployment insurance has been gutted through budget cuts so fewer of the unemployed now receive benefits they need which are available for a shorter period of time. Besides that, the budget for job training to help the unemployed has been severely cut over the past 25 years. Currently 84% of what was available back then no longer is. David documents it all with powerful and graphic anecdotal examples of the terrible damage done and a government that allows it to happen showing it no longer cares about ordinary working people.
Chapter Four: Debt - It's High, Rising, and Becoming a Great Burden for Ordinary Working People
Many of us may know something about how the Bush administration turned a budget surplus into huge deficits with little if any relief in sight for years to come. They also should know a good bit more about mounting private debt, especially if they're one of the many millions burdened with their own debt obligations and have a hard time figuring out how to repay them while simultaneously adding more.
The problem stems from a society weaned on the notion that we should buy now and pay later regardless of whether our debts from borrowing must be serviced which means paying high interest carrying charges. That's especially true in the case of the main way consumers run up debt - on their credit cards where David explained that the predatory credit card industry makes out like mega-thieves pocketing $24 billion in 2004 from late usury-level penalty fees alone which made up the bulk of their $30 billion in profits. Like all other major industries, this one has friends in high places, and it freely "scratches their back" with lots of "scratch" to get legislation favorable to its interests - namely, letting them get away with grand theft. The result, as David reports, is the tragedy of US consumers being $2 trillion in debt with the average household carrying and servicing through monthly interest payments an unpaid credit card balance of about $7,500. That's debt hell for these afflicted consumers, but profit heaven for the credit card bandits. I personally know how these companies work and always have. As a result, I pay my monthly bills in full and have never paid the few credit card companies whose cards I carry one cent in interest since getting my first credit card about 40 years ago. I'm also sensible and restrained in my spending so my monthly balance is never onerous. My advice to others on how to beat these thieves who thrive on your excesses is do as I do, and they'll never know what hit them until it does.
Making matters far worse for the public, already plagued by stagnating wages and good jobs exported to cheap labor countries, is the new bankruptcy legislation. It gutted consumer protection making it much harder to get that protection when it's most needed. The new law gives the predatory credit card companies license to steal even more than they're now doing by making it much harder for ordinary people to seek the bankruptcy protection they used to have. The law was passed through lies and deceit about consumer abuse of the system that needed correcting. In fact, Harvard University researchers found that 90% of personal bankruptcies result from illness, unaffordable medical bills for people without insurance to cover them, job loss, death in the family or divorce - hardly conniving people trying to rip off the credit card companies or lending agencies.
David then once again goes on to explain in detail the lies and myths about who benefits and who loses under the new law, the economic conditions for most people making them more vulnerable when trouble strikes, and much more including his sensible solutions to the problems now created.
Chapter Five: Pensions - Workers Actually Could Count on Them Once - But That Was Then, and This Is Now
A major part of the American dream is that after a lifetime of work we can look forward to a comfortable retirement and secure future. Long ago, things turned out that way for most ordinary working people who had good, high-paying jobs with essential benefits, like those in manufacturing now lost. They also had strong union protection which won them the rights they were able to enjoy while still working and after they retired. No longer in today's hostile world where our government officials in league with big corporations are rewriting sacred rules allowing these companies the ability to evade their obligations to workers once thought to be inviolable.
So even though these companies once agreed in union negotiations to legally binding contract obligations regarding worker benefits to be paid to retirees, they're now seeking legal protection through the courts to back out of them. The courts today are stacked with corporate-friendly judges, but even when companies have no justification for redress, they're able to drag out legal cases for years through appeals so that even if they end up losing, many retirees will have died off waiting and the companies will save millions even after legal expenses which aren't cheap.
Besides fraudulent corporate lawsuits to welsh on their obligations, companies are ingenious in coming up with new ways to cheat their employees. The AP reported one such way in 2002 which was the quiet conversion of the retirement plans of eight million workers to so-called "cash balance" schemes by hundreds of companies. As David explained, these new plans were and are nothing more than a con to let these companies back out of their guarantee to give their workers a lifetime monthly pension and instead offer them one lump-sum payment. The companies getting away with this scam are able to save many millions of dollars because that payment amounts to far less than the original promised benefits which is why they devised this scheme in the first place.
Even the Bush administration tried getting into this act by rolling out what David rightly calls "the granddaddy of all pension rip-off schemes : privatizing Social Security." I've called it the grandest of grand thefts if they're ever able to pull it off. It hardly matters to this administration that this magnificent plan has been "the most successful government initiative" ever in our history and which has lifted many millions of working people out of poverty and made it possible for them to have a decent retirement that otherwise wouldn't have been possible. What the Bush administration proposed doing was to turn this program over to the sharks on Wall Street and let them run it and be able to skim off a bonanza in big fees from retirees who would be their victims and end up with less than they now receive. A University of Chicago economist did the math and estimated that Wall Street would earn between $400 billion and $1 trillion in broker and administrative fees under the Bush mega-ripoff scheme. Thankfully the public balked strongly enough, and for now at least, the administration has backed off. But you can bet they're likely plotting their next move to resurrect what will be their dream scheme if they ever do pull it off. And when they launch their next attempt, it's almost certain they'll again try using the canard that the system is in danger of going bankrupt and only privitizing it can fix it. So far the public hasn't bought this deceit and hopefully won't the next time they try selling it. But David makes it very clear that the future security of millions of working people is in jeopardy through pension and Social Security "reform" (meaning scamming the public to steal our future for corporate gain) unless we the people are vigilant and take steps to fight back. David shows us how.
Chapter Six: Health Care - Present Plans or Lack of Them Are Hazardous to Our Health
Although the government may ignore and deny it, it's beyond dispute this country has a major and unforgivable health care crisis that continues to get worse. Presently 46 million or more people here have no insurance coverage at all, millions more have far too little, and David dramatically points out that 82 million Americans had no health insurance for some period of time between 2003 and 2004. This is happening in a country that spends almost 2.5 times the median average for the industrialized world, and yet the World Health Organization (WHO) ranked the US 37th in the world in "overall health performance" and 54th in the fairness of health care. Moreover, every developed country in the world except the US and South Africa provide free health care for all its citizens paid for though taxes.
David dramatically points out that we may have the best doctors and most advanced medical facilities in the world, but what good is it if they're unavailable to a vast number of the people living here because they can't afford to use them. David goes on to detail much more, explaining that despite the inadequacy of our health care system, the providers of it are some of the most profitable companies in the country - such as the HMOs, the other big insurers and the big drug companies. He also explains that a key reason why we spend so much and get back so little overall is that 15 cents of every dollar we spend on health insurance is skimmed off for "administrative expense." That's just code language for private industry very high profits. Compare that to our government run programs like Medicare which only spends 4 cents of every dollar on these expenses. I'm on Medicare and am very pleased with it except that recipients are being forced to pay an increasingly greater amount for it. The idea is to enable the government to welsh on its obligation to us to divert even more funds to its corporate allies - our loss for their continuing gain.
At the end of WW II, Harry Truman unsuccessfully tried to get Congress to pass a universal health care government run program. He never had a chance to get it through the Congress as the dominant health care industry companies and the legislators shot down his proposal and every new one that came along later to extend universal coverage to everyone. It's not because of the cost, although we were told that's the reason. It's because government owes its allegiance to its big corporate benefactors that won't do anything to deny themselves the right to control the health care delivery process and be able to charge whatever prices they wish for their products and services. They certainly have taken full advantage of that, and the result is the dismal state of our health care system and the high industry profits resulting from it.
As in his other chapters, David does a fine job exposing the lies and myths the public is told to justify a bad system. And he ends the chapter again by offering the kind of common sense solutions a responsible government serving the people would have jumped on and enacted long ago. It's now up to the public to rise up and demand they do it.
Chapter Seven: Prescription Drugs - The Best Advice Is to Stay Well and Not Need Them - Their Cost May Make You Sicker
Here are some of the facts David reports on what I like to call Big Pharma. This industry is one of the most profitable in the country making about 18 cents profit on every dollar of sales; it's aided by government using our tax dollars to fund about one third of all research on new drugs the industry gets at no charge; the industry spends about twice as much on advertising, promotion and administrative costs as they do on R & D to develop new drugs; the prices charged for prescription drugs in the US are inordinately high compared to the rest of the world and are rising at about four times the rate of inflation; these rising costs plus those for most all health services are rising so fast, companies are forcing their employees to pay a greater share of them or are reducing overall health care benefits; and the industry has one of the most powerful and effective trade associations representing their interests (PhRMA - that I spelled a different way above to refer to the companies and not the association) seeing to it that elected officials are well lubricated with campaign contributions and more personal benefits to assure that any legislation hostile to their interests never sees the light of day.
The bottom line is a Congress acting like a "wholly owned subsidiary" of the drug industry and consumers paying dearly for it. And just like other industries covered in the book, the drug giants try to justify their consumer-unfriendly policies with deceit and lies like claiming charging lower prices would mean less innovation and fewer new drugs. They also never mention that easier regulations have allowed them to come to market more quickly with new drugs that later turned out to be unsafe and in some cases resulted in deaths. One drug giant's Vioxx is a stark case in point and one in which the company is now involved in large class-action litigation on behalf of 10,000 consumer plaintiffs plus a second class-action suit on behalf of insurers and HMOs.
The drug industry will also profit handsomely from the new Medicare legislation that is so bad it could only be passed in the middle of the night and then only after enough lawmakers who first voted against it were coerced or bribed to change their mind - a testimony to this industry's influence. Under the plan, Medicare's bulk purchasing power was neutered so the drug companies could charge full, undiscounted prices for their products. The hidden details of this prescription plan for seniors are bad enough to make it worthless for many on Medicare like myself. But the plan is a likely bonanza for the industry and may net them hundreds of billions of dollars including about an extra $139 billion because the government can't negotiate lower prices.
David goes on to list other abuses the drug industry is allowed to get away with by our government that should be working for us but isn't. I'll mention just one more which is an attempt by the industry to prevent consumers from buying their drugs from other countries like Canada on the false pretext they're unsafe - even though they're the same drugs. So much for honesty and fairness. Once again David shows us how we can fight back and win.
Chapter 8: Energy - Try to Think of Another Industry with Closer Ties to Those Now in the Administration
The Bush administration is run by a cadre of high level officials formerly involved with energy companies before they came to government including the president and vice-president. Now try to think of another industry that will be better treated by those in government than this one. There is none, although there are lots of others who get their full share and aren't complaining.
There are good reasons why energy prices are high today, and we either don't hear about them or enough about them. The main reason is we're a profligate nation with 5% of the world's population that consumes 26% of the world's daily oil production and about 23% of total natural gas production. The reason we're so wasteful is the industry wants it that way and the government, in full support of the energy giants, encourages consumption and discourages conservation. The reason is obvious. Our bad habits are good for business.
David's book didn't have some industry figures I now have to show how good business really is in a time of sky-high oil prices. I'll do it by citing the operating results of the oil giant I most like to pick on because they make it so easy for me to do it - Exxon-Mobil. In 2005, this company showed it's currently the largest corporation in the world. In its annual report to shareholders and Wall Street investors, it reported the highest annual profit ever earned by a publicly traded company. It was a breathtaking $36 billion on sales revenue of $371 billion. But that's not the end of the story. The good times just keep rolling for this oil giant as it recently reported its operating results for its 2006 first quarter, and they're better than ever: profits were up 7% from last year to 8.4 billion (their highest ever for a first quarter) and sales were up as well by 8.4% to $89 billion. Now to put all that in perspective, based on its 2005 sales volume, Exxon-Mobil is so large that if this company were a country it would rank in size ahead of nearly 75% of all countries in the world. They can thank the Bush administration for a lot of their success. Guess who their top executives will be voting for in November and the top officials of the other energy giants as well.
High energy prices (and specifically oil prices) are also the result of at least two other factors which David discusses. One is the effect on competition by massive consolidation in the industry, especially among refiners. He noted the Federal Trade Commission (FTC) approved 413 mergers during the Clinton years and another 520 in the first three years of the Bush administration. Fewer companies mean less competition, and that's led to higher prices. David also reported that Consumers Union in 2004 found that higher prices were mostly from higher charges at refineries. And those increases were the result of lax federal regulation which allowed refiners to create artificial bottlenecks in supply driving up the cost of gasoline at the pump. There's a nasty word for this never used. It's called price fixing, and our government watchdogs are allowing it with their winks and nods to their oil giant friends. The consuming public is forced to pay the price and is lied to by the government and industry trying to justify it.
To top it all off, it's well known, especially by those who try to deceive us, that energy supplies are finite. With that in mind, you'd think the government would be encouraging or even mandating the industry to make a determined effort to find alternative sources to replace our dwindling resources that won't last forever. And you'd also think laws would be passed requiring conversation especially by raising fuel efficiency standards for vehicles and enacting other measures to lower energy consumption. But if you thought that, you'd be wrong. Although the need is urgent, doing these sensible things are bad for business. And as we see repeated industry after industry, our government will even pursue reckless policies to support their corporate friends and funders, and in the process ignore the needs of the public. Nothing will ever change until we demand it, and that's what David is trying to convince us to do.
Chapter 9: Unions - They Once Were Strong and Won Great Benefits for Their Members - No Longer
David observes, and I strongly concur, that there's no clearer expression of corporate America's hostile takeover of government than how elected officials treat ordinary working people. Above all, that means their right to organize and be represented by strong unions that will fight for their rights. Large corporations especially hate unions and always have. But a golden age of worker rights emerged during The Great Depression in the 1930s when economic conditions became so dire the Roosevelt administration and enlightened business leaders knew they had to make big enough concessions, like it or not, to avert a possible worker's revolution similar to what happened in Russia in 1917. The key legislation enacted for workers was the passage of the Wagner Act that established the National Labor Relations Board (NLR that guaranteed labor the right to bargain collectively on equal terms with management.
Things began to change in the post WW II era beginning with the 1947 passage of the Taft-Hartley Act that was the first major shot across the bow by corporate America to curb the power of organized labor. But things really picked up steam adversely during the Reagan years when that administration showed its contempt for working people. It began in 1981 with the firing of 11,000 striking air traffic controllers, jailing its PATCO leaders, fining the union leaders millions of dollars and finally "busting" the union. The Reagan administration also used federal tax dollars to finance strike-breaking, worked to reduce worker health and safety protections and campaigned to change federal statutes guaranteeing worker rights to organize and bargain collectively.
From Ronald Reagan to George W. Bush, things have gotten progressively worse as the social contract the government once had with the people has been systematically dismantled. It's been done program by program, year after year with the ultimate goal of the Bush administration and all politicians beholden to business to make all ordinary working people "self-sufficient" with little or no safety net for protection and the power of union representation effectively neutered. We see the result in how union membership has declined through the years. Whereas in 1958 about one third of the work force belonged to unions, today it's under 13%. That shameful figure is the lowest in the industrialized world to the detriment of all ordinary working people here.
Corporate America in league with government has shamelessly campaigned against unions in an effort to demonize them to discourage workers from understanding how membership benefits them. The rhetoric used is hostile, deceitful and contrary to the facts which David lists: average union workers earn about one-third more in total compensation than nonunion members; 89% of union members have employer-paid health care benefits compared to 67% of nonunion members; employers pay a greater share of union member health care premiums than they do for nonunion members; over two-thirds of union members have short-term disability insurance compared to about one-third of nonunion workers; and, union members receive about 26% more vacation time and 14% more total paid leave (vacations and holidays) than nonunion members. Also, strong unions benefit nonunion workers according to the nonpartisan Economic Policy Institute. They reported union influence resulted in an 8.8% wage increase for the average nonunion high school graduate. And another key fact came out of the influential Council on Foreign Relations. They reported that the decline in union membership "is correlated with the early and sharp widening of the US wage gap" between the well-off and ordinary working people.
Again David goes on to list and debunk the many myths and lies government and business try to use to attack and destroy organized labor. Without it or in weakened form, big corporations especially can exploit their work force, hold down wages and benefits and increase their profits. So far their plan is working like a charm as noted earlier in the section under wages. Ordinary working people today earn less than 30 years ago when adjusted for inflation, and the gap between rich and poor has widened to obscene levels and it's getting worse. It's unlikely this trend will be reversed unless a way is found to revive the union movement so that working people again have a strong voice fighting for their rights. Again, David offers solid solutions.
Chapter Ten: Legal Rights - This Means the Right of Ordinary People to Have Their Day in Court and Be Treated Fairly Because the Law Assures It - It's Called the Right of "Due Process" Guaranteed Under the Fourteenth Amendment of the Constitution
Fair treatment under the law in a democratic society serving us all is the way things should be, but they're not, Fourteenth Amendment notwithstanding. That's because corporate America in collusion with their government benefactors have stacked the legal deck to prevent it. So instead of equity and justice we have "tort reform." That's code language meaning limiting the legal rights of ordinary individuals including their ability to file lawsuits against corrupt companies and be able to get fair redress for the harm caused them.
David shows how government has pandered to corporate wishes. In 1995, Congress passed a bill limiting shareholders' rights to sue company officials and get proper restitution when they cooked the books or violated the law in other ways. Then in 2005, Congress enacted legislation limiting our right to file class-action lawsuits. And the same thing is happening at the state level, so that power and influence is stripping ordinary people of their legal right of protection against corporate abuse that seems to become greater as corporations grow larger and get cozier with elected officials. The 2005 federal legislation requires most class-action suits to be filed only in federal courts which are more heavily stacked with business-friendly justices than the state ones. Also, many state laws are tougher and federal courts are so overburdened many cases never get heard and those that do must wait far longer to be placed on the court docket. When justice is delayed under this kind of an unfair system, it's denied.
Once again David shows how big corporations and their government lackeys have gamed the system and rigged the legal rules so they win and ordinary people suffer for it and are denied justice. One more time David shows us how to fight back and win.
The Sum of It All for Ordinary People
David sums up his thoughts in a final chapter asking when "will this downward spiral ever end?" He then goes on to tell us the good news and the bad. As if we didn't know it, he stresses the bad news is both major political parties are complicit with their corporate allies and willingly aid them in their hostile takeover. So any time we're able to throw the bums out, we're just likely to get new bums. David adds more bad news explaining "the media" largely ignore what's going on. I'd go much further than David and say the "media" are the dominant corporate media, and they're in on the scam as they too benefit from it. The reporters and pundits they have on air or in print have little latitude beyond what their employers expect them to do. If they want to keep their jobs, they'll support corporate-friendly policies because they're good for business including the companies they work for.
But David also gives us some good news. Americans are smart he says. They know corporations and the rich have too much power, and government is there to serve them. We also have new avenues to connect with each other and become better informed. The growth of alternative media, the internet, weblogs (I have my own) and more are attracting growing numbers and over time may weaken the corporate media's stranglehold on us as our main source of information - which is no information at all. It's the party line designed and intended to "keep the rabble in line" so they can continue their wicked ways at our expense.
I must briefly add an update to David's reported good news on alternative media sources. It seems when things are getting too good for consumers, corporate America mounts an offensive to regain the offensive and grow their profits handsomely in the process. That's what the telephone and cable companies are now doing in Congress with their attempt to make the Web a gated community. They want to destroy net neutrality by gaining the right to charge their Web site customers based on the amount of their traffic. Their plan is to be able to offer a new tier of broadband service to companies using their networks to make them pay more for speedier access. There's lots more they want as well, if they can get it, that will benefit them but hurt consumers. There's now momentum building on Capitol Hill to head off this intrusion to rewrite the rules and hurt our internet freedoms. We won't know the outcome for a while, but the stakes for the public are very high and the adversary we face is very powerful and committed to beat us.
Overall on all the issues he discussed in his book, David admits we face a tough struggle and that "for every victory.....there are many more defeats." But he ends the book with his final prescription on how we can fight back, and I'll list the ones he's chosen:
1. Reject the idea that we can't bring about change. History shows we can if we're fully committed.
2. Get informed on what's going on and how it's harming us. It's not that hard if we try, but you won't get it on TV or in your morning paper.
3. Fight back at the grass roots. That's how Republicans began their rise to power back when Democrats controlled the White House for 20 years and the Congress for much longer. It starts at the local level and goes up from there. In my city of Chicago, it's called the city council and various boards that run the functions of government.
4. Don't get co-opted by the system. Instead, organize ordinary people for political action where you live. Remember how former Democrat and House Speaker Tip O'Neill characterized the system when he said "all politics is local." His grammar may have been bad, but his wisdom was sound.
5. Campaign and fight for public funding of elections. As long as private money rules, they win and we lose.
David ends on a very upbeat note, and I'll add my own after his from my article on the same subject. He cites our history of an active population that in the past fought back and won major victories - ending slavery, women's rights including to vote, the right to organize, civil rights and lots more. We've always fought injustice when it got bad enough and those affected wouldn't take it anymore. David concludes he's confident our outrage will grow enough to make us fight back again and lead us to a better future. And I'll end this section with a quote by famed Chicago community organizer Sol Linowitz who understood and preached that "the way to beat organized money is with organized people." He proved it.
My Own Summation of David's Important Book
I loved the book, especially because I wrote about the same subject using the same title as I stated at the outset. I also said up front and will repeat again that everyone should read David's book as a starting point to learning what's wrong that's harming us and getting worse and then learn how we can fight back and win.
That said, I have some suggestions for David in future editions of this book. I covered a few issues David didn't in my Hostile Takeover article, the earlier companion one to it I called Democracy in America - It's Spelled C-O-R-R-U-P-T-O-N and other writing. I'll list three important ones briefly and end.
l. Obscene levels of military spending that benefit the defense contractors and all other companies serving the military - industrial complex have hurt the public enormously. I wrote that the Center for Defense Information reported that since 1945 over $21 trillion dollars has been sucked out of the economy for military spending largely to benefit US corporations even though the country had no real enemies all through those years - and we were lied to all that time to make us believe we did. The public paid for this largesse through our taxes that should have been spent on essential social services we never got.
2. The state of public education in the country has been degraded by a combination of neglect and a deliberate effort to produce new generations of young people only fit for low-paying service jobs - because many of the good ones (especially in manufacturing and high-tech) are being exported to low-wage countries. George Bush's "no child left behind" education program is just another fraud to enrich corporations at the expense of school children.
3. The prison population in the country has grown to over 2.1 million with about 900 new inmates being added each week. It's now the largest in the world, even greater than China's with four times our population and a government that has no compunction about locking people up. I wrote a major article on this I called The US Gulag Prison System, and I was referring to the one at home. This is an outrage and should be a national scandal as is the state of what I call our criminal-injustice system. All of it is an outgrowth of a society benefitting wealth and power and doing it at the expense of ordinary people who naturally become more restive as their lives become more intolerable. So we've chosen to solve the problem by locking up as many of them as we can on any pretext instead of providing essential services and correcting corporate abuses which is how a government serving us would do it. This one (Republican or Democrat) doesn't and won't unless we make it do it.
I urge David to consider adding these topics to a future edition of his wonderful book. But I applaud him for his important contribution. It's his first book, and I certainly hope not his last.
Stephen Lendman lives in Chicago and can be reached at firstname.lastname@example.org . Also visit his blog address at sjlendman.blogspot.com.