“Endemic in the Corporate world is greed and avarice.” You state emphatically.
“Why, do you believe that?” I ask.
“Because corporations are mandated by law to place earning a profit for their shareholders above all else.” You reply.
“You would be wrong about that, there is no mandate, legal clause, nor statute of law that requires a corporation to maximize shareholder return at any cost.” I respond. “Sorry, but there is no such law!”
“The belief that shareholders come first is not codified by statute. Rather, it was introduced by a handful of free-market academics in the 1970s and then picked up by business leaders and the media until it became an oft-repeated mantra in the corporate world.”100
Globalization and increased competition are the two excuses most often stated for why corporate CEOs embarked on a slash and burn policy of reducing employees domestically, shipping operations overseas, and generally pursuing a selfish policy of caring more about raising stock values, along with their own salaries, than what was good for their nation of origin. Yet they still invested heavily in buying political clout to insure lowered taxes.
This strategy is not unique to IBM but is almost ubiquitous across most of the corporate landscape. All in direct contrast to a statement made by Margaret Blair, a professor at Vanderbilt Law School. “We don’t build companies to serve Wall Street, we build corporations to provide goods and services to a society and jobs for people.” 100
In a speech by Teddy Roosevelt that is just as poignant today as it must have been when he gave it one hundred and six years ago about the role of Government as a guiding power limiting the detrimental effects of corporatist wealth. He would form the Progressive Party two years later in 1912 after a split in the Republican Party due to a disagreement between President William Howard Taft and himself.
August 31, 1910
The only force powerful enough to control Corporate greed is Government. Theodore Roosevelt made a mighty speech about this very issue in a dissertation he read at the dedication of the John Brown Memorial Park in Osawatomie, Kansas. In attendance were many Civil War veterans. He quoted Abraham Lincoln and then proceeded to talk about the struggle of his age. I can’t help but see the relevance to the very same struggles that our Nation faces today. His words could very well have been those of Bernie Sanders. I guess we haven’t come all that far in 106 years afterall.
“In every wise struggle for human betterment one of the main objects, and often the only object, has been to achieve in large measure equality of opportunity. In the struggle for this great end, nations rise from barbarism to civilization, and through it people press forward from one stage of enlightenment to the next. One of the chief factors in progress is the destruction of special privilege. The essence of any struggle for healthy liberty has always been, and must always be, to take from some one man or class of men the right to enjoy power, or wealth, or position, or immunity, which has not been earned by service to his or their fellows. That is what you fought for in the Civil War, and that is what we strive for now.
At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth. That is nothing new. All I ask in civil life is what you fought for in the Civil War. I ask that civil life be carried on according to the spirit in which the army was carried on. You never get perfect justice, but the effort in handling the army was to bring to the front the men who could do the job. Nobody grudged promotion to Grant, or Sherman, or Thomas, or Sheridan, because they earned it. The only complaint was when a man got promotion which he did not earn.
Now, this means that our government, national and state, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics. That is one of our tasks to-day.” 128
Roosevelt went on to say that wealthy men and special interests deserve justice and equal protection under the Law to ensure the rights of all men.
“For every special interest is entitled to justice, but not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation.
The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have called into being.
There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done.” 128
TR continues on topics relevant to his day, i.e. establishing commissions, tariffs, and legislation to promote his vision.
“The duty of Congress is to provide a method by which the interest of the whole people shall be all that receives consideration.”
“The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise. We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows.” 128
On inherited fortunes.
“The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective — a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.” 128
He speaks briefly about conservation, a subject near and dear to his heart.
“Moreover, I believe that the natural resources must be used for the benefit of all our people, and not monopolized for the benefit of the few, and here again is another case in which I am accused of taking a revolutionary attitude.” 128
Roosevelt speech continued on about agriculture with a special word to Farmers.
“And now a special word to the farmer. I want to see him make the farm as fine a farm as it can be made; and let him remember to see that the improvement goes on indoors as well as out; let him remember that the farmer’s wife should have her share of thought and attention just as much as the farmer himself.” 128
In words that are as applicable today as they were one hundred years ago.
“No man can be a good citizen unless he has a wage more than sufficient to cover the bare cost of living, and hours of labor short enough so after his day’s work is done he will have time and energy to bear his share in the management of the community, to help in carrying the general load. We keep countless men from being good citizens by the conditions of life by which we surround them. We need comprehensive workmen’s compensation acts, both State and national laws to regulate child labor and work for women, and, especially, we need in our common schools not merely education in book-learning, but also practical training for daily life and work.” 128
Roosevelt stated repeatedly in this Kansas speech what he felt was the duty of the Federal Government. The term he used was “National Government” that earned this speech its title, “New Nationalism Speech”
“The National Government belongs to the whole American people, and where the whole American people are interested, that interest can be guarded effectively only by the National Government. The betterment which we seek must be accomplished, I believe, mainly through the National Government.”128
In summation, Roosevelt spoke about the quality of man, his character.
“In the last analysis, the most important elements in any man’s career must be the sum of those qualities which, in the aggregate, we speak of as character. If he has not got it, then no law that the wit of man can devise, no administration of the law by the boldest and strongest executive, will avail to help him. We must have the right kind of character — character that makes a man, first of all, a good man in the home, a good father, and a good husband — that makes a man a good neighbor. You must have that, and, then, in addition, you must have the kind of law and the kind of administration of the law which will give to those qualities in the private citizen the best possible chance for development. The prime problem of our nation is to get the right type of good citizenship, and, to get it, we must have progress, and our public men must be genuinely progressive.”128
Regardless of the good intentions of President Roosevelt, the damage of unbridled avarice continued to plague the business world. “Economists Michael Jensen and William Meckling published a paper saying that shareholders were “principals” who hired executives and board members as “agents.” In other words, when you are an executive or corporate director, you work for the shareholders.” 100
Intimating that CEOs and upper management were mere employees of the shareholders of the corporations that they ran. The moral landscape continued to shift with the rise of executive pay tied to share prices ushering in an era of income disparity not seen since Nineteen Twenty-nine.
“The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.” 100, 101
Economists whose job it is to rationalize all of this information have only been able to say that for some inexplicable reason greed and avarice have become acceptable regarding CEO and Manager remuneration. Greed evidently is Good.
Given that US Business leaders, Managers, and Stockholders along with both Houses of Congress and apparently The Supreme Court all subscribe to the creed that “Greed is Good” a mantra that has gotten them to a very comfortable spot in the one percent group of our Nation’s earning hierarchy, why would anyone believe that the Business Community would or could do a better job at managing the Public Water supply than the public themselves?
Take Nestle Corporation’s refusal to cease exploiting California water supply despite a devastating drought for an example.
According to a 13 October 2015 article in the LA Times by Geoffrey Mohan, “Nestle has five bottled water plants in California and uses about 705 million gallons of water each year. The company, owner of the Arrowhead bottled water brand, has drawn millions of gallons from the west fork of Strawberry Creek under a permit it apparently acquired in 2002. At a time when residents have been asked to cut back water use during the record-setting drought, the diversion for commercial bottling to consumers once again has put Nestle in the cross hairs of the state’s water squabbles. The company faces scrutiny over its water withdrawal activities elsewhere in the state.” 103
All done using an expired permit, will their be criminal charges? Not if you are a corporate person. At least criminal charges can be filed against an actual real live human person when their actions are so vile that they place profit or political gain above the health and safety of a whole city’s population, like the residents of Flint MI.
“Three people — two officials with the state Department of Environmental Quality and a water official from Flint — are facing criminal charges as a result of an investigation into the lead-contaminated water case in Flint.” 104
Certainly Civil Authorities can and do make terrible errors in judgement; however there is a recourse, even the probability of justice. At least in the Flint MI case two officials with the state Department of Environmental Quality and a water official from Flint face felony charges including misconduct, neglect of duty and conspiracy to tamper with evidence. They have also been charged with violating Michigan’s Safe Drinking Water Act.
If history has demonstrated anything it is that where corporations are at fault, little if anything beyond monetary amercement is the norm regarding punishment. Had the Water supply in Flint been Privatized there would be little more than a fine levied on a corporate entity, there would be no incarceration for the Chief Executive Officer. We need to look no further than the credit and housing bubble collapse of 2008 to know with certainty that Principles, CEOs, and Managers do not go to prison.
“Yes, plenty of people have been prosecuted for mortgage fraud and other financial crimes since the financial crisis: The Justice Department has charged over 4,000 people with mortgage fraud alone, according to a spokesman. And the department has filed 46,000 white-collar crime cases since 2009.
Yet almost all of these are low-level employees with little or no name recognition. Hardly any top executives at the financial firms paying multimillion- and billion-dollar-plus fines for engaging in criminal behavior have been charged or convicted. (One exception is Lee B. Farkas, former chairman of the mortgage firm Taylor, Bean & Whitaker, who is serving a 30-year prison term.)” 105
In a rush to embrace austerity programs during this current era of cost cutting and so called fiscal responsibility, some municipalities look toward privatizing public water systems, the private water industry would like nothing better, it would be good for their business but a mistake for the consumer. Corporations will place their shareholder’s ROI (Return on Investment) and executive salaries first, above the wellbeing of the public, it is just in their natures to do so.
It is expensive to maintain infrastructure and no one enjoys paying their taxes to do so, especially businesses. This is the primary reason why the United States has allowed the condition of our Roads, Bridges, and vital infrastructures to slowly deteriorate over time to a point where the cost of revitalizing these important structures will take significant resources. The question is why have we allowed this to occur, it begs further investigation to fully comprehend the reason why the American Public endorsed, followed, and pursued a policy of lowered taxes above the public good.
Economist, Presidents, and the Fed or how we got here from there
I find myself in midst of attempting to comprehend the causality of our current abhorrence to raising taxes, both on the middle-class, the uber-wealthy, and corporations. It is a daunting task.
I have decided to take a historical approach because I find trying to comprehend the mathematics of economics akin to an amphigory; it is all a gallimaufry to me. At least with history you get who said what to whom, when they said it, and possibly why. Although, the ’who said what’ is far less important, it would seem, than what Political Party was in power at any given time because economic theory appears to go in and out of favor with each election cycle, in fact often within each administration. Unfortunately, all the articles that I have read tend to follow this rotating scenario:
“Yom tov, head of the Federal Reserve and a dedicated proponent of Urundian stabilization, has indicated his intention to follow a monetary policy intended “to promote maximum employment, production, and purchasing power” and provide for greater coordination between fiscal and monetary policies.” The ultimate goal being the total destruction of Labor Unions, ensure corporate supremacy, and a return to serfdom for the general public.”
Then with the next article, there is a concerted effort to refudiate the opinions and theories of the previous Fed chairperson’s guru of coinage with text of this nature.
“Switching from an earlier monetarist policy, Federal Reserve chair Melony Snicketts began a policy of tighter monetary policies such as lower money supply growth to break the inflationary psychology and squeeze inflationary expectations out of the economic system. Basing his theories on the wildly popular Bad Fish curve.”
Putting humor aside, because there is little that is amusing when it comes to fiscal matters unless you are fabulously wealthy and beyond the need of caring where your next meal or rent check will come from. Let us proceed and see if we can find the causality for the American abhorrence for paying our fair share of taxes to maintain the infrastructure so vital to us all.
After WWII, our victorious government decided to tinker with how our economic policies worked in an effort to avoid the devastatingly high unemployment situation of the nineteen thirties, evidently not trusting entirely in the Glass-Steagall Act. To that end, the Congress of the United States enacted the Employment Act of 1946. Among other things, the act declared it a responsibility of the federal government, specifically the Federal Reserve’s current dual mandate to “maintain long run growth of the monetary and credit aggregates…so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. This was motivated in large part to a belief in Keynesian stabilization policy theory, based on the “Phillips curve.” 107 An economic assumption that represented a longer-term trade-off between unemployment, which was very damaging to economic well-being, and inflation, thought of as more of an inconvenience. This was an attractive assumption for policymakers hoping that the dictates of the Employment Act could be forcefully pursued.
Although several economists warned against using the Phillips curve, they went unheeded and as we all now know, pursuing a balance between inflation and full employment turned out to be a false bargain, requiring ever-higher inflation to maintain. 108
During the final year of the Second World War the Industrial Nations of the Allied Powers met at Bretton Woods, NH USA to establish a global monetary system that they hoped would bring greater economic stability and peace by promoting global trade. That accord is known as the Bretton Woods System.
“In an effort to free international trade and fund postwar reconstruction, the member states agreed to fix their exchange rates by tying their currencies to the U.S. dollar. American politicians, meanwhile, assured the rest of the world that its currency was dependable by linking the U.S. dollar to gold; $1 equaled 35 oz. of bullion. Nations also agreed to buy and sell U.S. dollars to keep their currencies within 1% of the fixed rate. And thus the golden age of the U.S. dollar began.” 109
However as with all things man made the Bretton Woods System ultimately succumbed to the vicissitudes and vagaries of time and the machinations of humanity. The Vietnam War, like all US wars 109, caused an enormous drain on the US economy but none so damaging as the Vietnam War.
“The Vietnam War, like the previous wars analyzed, had a lasting fiscal legacy due to the increased levels of government expenditure which was financed by increases in taxation from 1968 to 1970. The blowout in budget deficits was driven by both military and non-military outlays in combination with an expansionary monetary policy that led to rapidly rising inflation in the mid-1970s.” 110, 111
Inflation, rationalized by a negative balance of payments, growing public debt incurred by the Vietnam War, and monetary inflation by the Federal Reserve, caused the dollar to become increasingly overvalued in the 1960s, forcing a termination of the Bretton Woods System, and providing the public with new words for its lexicon with such memorable economic terms as “Stagflation” “Nixon Shock”, and something termed “Demand-pull”.
“Demand-pull Inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as “too much money chasing too few goods”.” 112
The term “Nixon Shock” refers to Executive Order – EO 11615 made by then President Nixon after meetings with Federal Reserve chairman Arthur Burns, incoming Treasury Secretary John Connally, and then Undersecretary for International Monetary Affairs and future Fed Chairman Paul Volcker at Camp David. These men met to discuss the ramifications of taking the US off the Gold standard, essentially making the US Dollar a fiat currency (legal tender, but not backed by a physical commodity, such as Gold.) 113
“In economics, stagflation, a portmanteau of stagnation and inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.”
Stagflation – Noun – an inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity.
In an attempt to understand the thinking of these men let us look at some of the documentation from that period that was so critical in the eventual mindset of the American electorate.
“From the beginning of his term in office Nixon had problems with the economy. He had little tolerance for international finance, evidenced by this quote.”
“Nixon had minimal patience for the details of international finance. When an aide informed him of monetary problems in Rome, Nixon snapped, “I don’t give a s— about the lira.” What he did care about was the domestic economy, especially the politically sensitive unemployment number.” 113
So what did Mr. Nixon do, he stopped taking advice from his newly appointed Chairman of the Federal Reserve Bank, Arthur Burns and began taking advice from his Labor Secretary, George Shultz. Shultz voiced the theories of his friend Milton Friedman who fervently believed that money supply was the Fed’s key tool, that is to say if the Federal Reserve printed more dollars, then money would be worth less and goods and services would cost more, in short — in·fla·tion – inˈflāSH(ə)n/ – noun – 1. the action of inflating something or the condition of being inflated. “the inflation of a balloon” 2. ECONOMICS – a general increase in prices and fall in the purchasing value of money. “policies aimed at controlling inflation”.
“By December 1969, inflation had topped 6 percent—its highest level since the Korean War. Inflation had disturbing international implications because, in the system known as Bretton Woods, that had prevailed since the end of World War II, the U.S. was committed to backing every dollar overseas with gold. Thus, foreign countries had the right to exchange their greenbacks at the rate of $35 per ounce. The other currencies were fixed to the dollar, and the dollar—the sun in the monetary sky—was pegged to gold.” 113
The story of how the gold window was shut is a fascinating tale of political ego’s running amok and profound hubris of both elected officials and their advisors that is unfortunately beyond the scope of this book; however one last quote is in order.
“The Nixon Shock was a central cause of the Great Inflation. It also spelled the end of the fixed relationships that had governed the financial universe. Previously, people took out mortgages for set periods and at fixed rates. They had virtually no options for saving money other than in banks, and the interest rates that banks could pay were capped. Floating currencies unleashed a new world of risk and instability. For the first time, investors could bet on the direction of interest rates or the Swiss franc. New financial instruments, new speculative tools, proliferated. The world gravitated from the certainties of Bretton Woods to the dizzying market cycles we’ve lived with since.” 113
Richard Milhouse Nixon left the White House in disgrace, the world economy in a shambles, and inflation steadily rising in the US. His successor, Gerald Ford faced growing international challenges from a volatile Middle East that added to the economic woes of the American Public. His solution was to ask the people to turn down their thermostats, lower their food bills, and generally tighten their belts. Is it any wonder that he was a one term President despite being largely regarded and a decent human being.
“Ford, who was sworn in as president on Aug. 9, 1974, after the resignation of Richard Nixon, faced inflation that was already surging at a 10.9 percent annual rate in that month. It was thrust into overdrive by the OPEC oil embargo of 1974 and the elimination of wage/price controls instituted in the Nixon administration.”114
Ford’s signature effort to battle inflation is recorded in this speech he gave over the air to the American Public.
““Here is what we must do, what each and every one of you can do: To help increase food and lower prices, grow more and waste less; to help save scarce fuel in the energy crisis, drive less, heat less.
“Every housewife knows almost exactly how much she spent for food last week. If you cannot spare a penny from your food budget – and I know there are many -surely you can cut the food that you waste by 5 percent.”
Buttons with the initials ‘WIN’ were distributed, and people were encouraged to wear them to help raise the public’s awareness of the effort.” 114
Finally a Democrat was elected, a squeaky clean but most unfortunate one in one pivotal regard. Carter was a Washington outsider and a man who did what he felt was right despite the political fallout. He made some very powerful enemies, especially in his own Party by refusing to sign what he termed “Pork Barrel Bills”. His record is notable even by today’s liberal standards and his record on environmental initiatives is equally impressive. Unfortunately events beyond his control conspired to make him another one term President. 115
President Carter appointed Volker to be Chairperson of the Federal Reserve Board.
“Following an August 1979 cabinet shakeup in which Carter asked for the resignations of several cabinet members, Carter appointed G. William Miller as Secretary of the Treasury, naming Paul Volcker as Chairman of the Federal Reserve Board. Volcker pursued a tight monetary policy to bring down inflation, which he considered his mandate. Volcker (and Carter) succeeded, but only by first going through an unpleasant phase during which the economy slowed and unemployment rose. Inflation did not return to low single-digit levels until 1982, during a second, more severe recession; President Reagan re-appointed Volcker to the post in 1983.” 115
“Carter knew that Volcker would raise rates sharply probably causing a recession but told his counselors who advised against the appointment to let him worry about the politics.” 116
Carter’s bête noire came in the form of an “Islamic Revolution” on November 4, 1979. That disturbance occurred a world away in the volatile middle east when the repressive government of Mohammad Reza Pahlavi the Shah of Iran was toppled along with the taking of the US Embassy and sixty-six American hostages, 117 seen by the new leaders as the source of much of their oppression.
The next tinkerer in our economic system was the great communicator, Ronnie Rayguns. Conservatives worship him to this day; although, why I can only guess. There is so much myth that surrounds the man that he seems to have been possessed of more joss than good sense. He simultaneously championed conservatism while defeating America’s traditional nemesis, that bear, Soviet Communism. Or did he merely get lucky, his timing flawless, to be President during a time when Russian Imperialism in Afghanistan wrought the same economic turmoil to the Soviet economy as Vietnam did to the US’s. He was able to convince a lot of people of the veracity of his less than stellar performing economic policies, the Rape and Pillage, Trickle-down theory of Supply-Side economics. Based upon the Laffer Curve, that dictated large tax cuts for the wealthy coupled with draconian cuts on social services; however, it never took into the consideration that there were multiple Laffer curves depending on on where and to whom you talked. This philosophy spawned a movement known for its almost suicidal abhorrence of big government, the Tea Party. 118
The next administration to take a roll at the economic dice was the first President Bush, the one with two middle initials H.W. He was also destined to become a one term President just like James “Jimmy” Carter, and for a similar reason. Both men were upstanding Americans who served their Country with distinction and who possessed an internal moral compass seldom witnessed in politics.
Where Carter’s re-election hopes were dashed due to multiple causes, both attributable to a poor domestic economy and foreign turmoil, Bush I lost his bid for a second term due to the economy and lack of public confidence. 121
“The massive tax cuts he himself had termed “voodoo economics” in the 1980 Republican primary had stimulated the U.S. economy but failed to increase tax revenues, while the 1985 Gramm-Rudman Deficit Reduction Act triggered automatic spending cuts. Concern over the national debt was the chief substantive issue of the 1988 campaign, and Bush had vowed to reduce it without raising taxes. Inflation was tame and unemployment relatively low, yet the transition to a post-industrial economy and the influx of high-technology consumer products from Japan raised the specter of a decline in America’s economic and technological leadership.” 120
Next up at the Craps table was his holiness William “Bill” Clinton. This Democrat had the benefit of inheriting a stable economy just recovering from a recession that had dashed his predecessor’s re-election chances. What would Bill do with this manna from heaven?
“Prior to the 1992 presidential campaign, America had undergone twelve years of conservative policies implemented by Ronald Reagan and George Herbert Walker Bush. Clinton ran on the economic platform of balancing the budget, lowering inflation, lowering unemployment, and continuing the traditionally conservative policies of free trade. In 1992, Bill Clinton was elected President of the United States of America. During Clinton’s presidency (1993 to 2001), the economic policies he put into place for the U.S. were termed Clintonomics. Clinton inherited Alan Greenspan as Chairman of the Federal Reserve.” 123
There really was not that much to do, things were fairly quiet. If only Billy-boy had been able to keep his hands off things perhaps the world would have continued to turn quietly as it always had but that is not the way life works. In 1999 Clinton signed the Financial Services Modernization Act, which allowed banks, insurance companies and investment houses to merge and thus repealed the Glass-Steagall Act which had been in place since 1932. This of course set up the great Crash of 2008. 123
Was there a connection between Clinton’s signing of legislation, the Gramm–Leach–Bliley Act and his Impeachment Trial in Congress?.
“It, the Gramm–Leach–Bliley Act, repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the bipartisan passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies.” 124
Probably not because the bill was veto-proof in Congress. On November 4, the final bill resolving the differences was passed by the Senate 90–8, and by the House 362–57. The legislation was signed into law by President Bill Clinton on November 12, 1999.
“Freefall” by Joeseph Stglitz documents from inside the Clinton Administration, truly excellent read.
“ “Freefall” has three standout strengths. First, it is a powerful indictment of Wall Street, the United States financial sector and the Federal Reserve Board. Second, it offers a reluctant but persuasive elaboration of how the Obama administration decided to embrace the financial sector and the Fed, continuing and enlarging both the bailout and the too-big-to-fail philosophy that it inherited from George W. Bush. Finally, it is a blunt attack on Stiglitz’s own profession, for transforming “scientific discipline” into “free-market capitalism’s biggest cheerleader.” “ 125
“Many of Stiglitz’s pages carry the message “bipartisan indictment” in invisible ink. But despite acknowledging that “dealing with this crisis — and preventing future crises — is as much a matter of politics as it is economics,” he avoids more than occasional references to the profound politics involved.” 125
Most of us who were above the age of reason know exactly where we were on the morning of September 11, 2001. I was sitting in my shiny new office in Andover, MA working on some obscure piece of code for some no name client when I noticed a slowdown in Internet traffic on my Computer. I switched over to CNN.com and there it was a burning Twin Tower signaling the beginning or the end fo our way of life. America and the Western World would never be the same. Our naive, secure existence had just been purposefully crashed into by a group of terrorist from half a world away. And so began the era of the second Bush Presidency George W Bush, 2001-2008 and the tragedy that was to become the wars in Iraq and Afghanistan once again turing a positive economic budget surplus gained between the years 1998 and 2000, the last three years of Clinton’s presidency into a wrecked economy by 2008. 125
So much for the tinkering with the economy to achieve a better way of life for all; it can too easily be dashed by the actions of a few.
I have no doubt that Reagan, both Bushes, Clinton, Obama, Tea Party conservatives, and liberals all desire the same thing, a better life for all Americans; however, they all had and have a very different view of how to achieve that goal.
“The conservative movement is in no position to accept or even acknowledge those implications, now that tax cutting has become the long pole in the Republican tent. Therein lays the element of tragedy. By turning a limited-government movement into an anti-tax movement, conservatism has effectively gone into business with the Big Government that it claims to oppose. It is not starving the beast. It is fueling the beast’s appetite. And the beast has a credit card.” 118
The push and pull of our two party political system has left us with a divided, partisan government. Fiscally responsible champions, who flirt with the destruction of the US Government as a means to achieve their ultimate goals, a perceived return to a utopian small government with lower taxes, high employment versus liberal socialists, who are more concerned with environmental peace, human justice than economic growth. They are inherently at odds with each other. Somehow the quest for prosperity, economic security along with social justice and environmental justice has morphed into a battle between proponents of small government, low corporate taxes, vilification of the poor, a distrust of immigrants against those who would like government to protect those persons and things that can not protect themselves.
What amazes and confounds me is the notion that Big Government is bad but somehow Big Global Business is not. How will any legislation get passed in a climate devoid of compromise? How will something that is so basic as a Fresh Water Supply Systems get the funds required to keep them in proper working order without adequate tax revenues? A country with a political climate that is unconducive to raising the funds necessary for the proper management of our fresh water supply will fall prey to large global corporations who will make promises that they have no intentions of keeping. It is far better for local governments at the Town, City, and State level to be responsible for raising the funds through taxes to ensure the proper management of water systems by and for themselves.
“But corporations often promise they can finance expensive infrastructure costs more easily than governments. In truth, the length of privatization contracts, while long, is often not long enough for corporations to reap gains from infrastructure investment. Therefore, without public accountability, corporations have little reason to invest in unprofitable infrastructure, regardless of the effect on the public. Instead, the local government is often left to foot the bill for infrastructure improvements while the corporation collects the profits from the more lucrative business of operation and management. The CEO of Veolia Environment, the world’s largest water privatizer, admitted this very premise of his business model when he said, “Many of the best performing contracts are those where a private operator assumes the operational and commercial risks, but not the major capital expenditures.” What he did not say is — despite promises to the contrary — corporations rely on governments to absorb these “capital expenditures,” (e.g. infrastructure costs). What took place in West Virginia is a clear example of communities sorely in need of infrastructure improvement being left out to dry by the hollow promises of infrastructure investment. West Virginia American Water, a division of American Water Works Company — the largest privatizer in the country, promised millions of dollars in support to several communities. Its CEO extolled the benefits of privatization for cash-strapped cities: “Now is the time to enable the private sector to provide resources to help financially distressed municipal systems update, maintain and operate their facilities in a true partnership.” But after proposing an exorbitant 13 percent rate hike, which was denied by the community, the corporation decided it would no longer work to extend service to those areas. It walked away from critical expansion and maintenance of infrastructure simply because it was not profitable.” 127
Theodore Roosevelt was correct when he quoted Abraham Lincoln, “I hold that while man exists it is his duty to improve not only his own condition, but to assist in ameliorating mankind.” 128
Speaking at a World Water Day Summit General James Jones said,
“The growing imbalance in global water supply and demand is evolving into the most toxic threat to world peace and international and U.S. national security.” 129
— Gen. James Jones
“The premiere strategic threat to global security, and our own, is not a particular country, ideology, or weapon,” Jones said on March 22 at a World Water Day summit in Washington, D.C., the same day that dozens of people were killed in Brussels by Islamic State suicide bombers. “It is human wants and needs – for the unsatisfied necessities for life-basics, including food, energy, water, and even dignity.” The former national security adviser to President Obama went on to say that, “The growing imbalance in global water supply and demand is evolving into the most toxic threat to world peace and international and U.S. national security.” 129
Nothing worthwhile in this life is free or easy, it is in the nature of humankind, especially in the affluent US, to expect that everyone has an equal opportunity to enjoy a healthy environment, clean fresh water, a robust economy with full employment. That this legacy would simply continue as it had since this nation’s founding without having to struggle or pay for it. Some assume that it is their right to have these things and have become disillusioned when their expectations are not met; however the reality of this world would suggest that is not the case. Not every human on the planet is gifted with the same talents, opportunities, or chances to attain their desires. To those whom much has been given, they should give back in kind to those who struggle with lesser gifts and greater difficulties, be it through direct action and selfless acts or by paying a larger portion of taxes so that all may partake in a decent life, because we are all in this together whether one likes it or not.
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