Thursday, 28 July 2011

Wealth and Democracy

"As the twenty-first century gets underway, the imbalance of wealth and democracy in the United States is unsustainable, at least by traditional yardsticks.  Market theology and unelected leadership have been displacing politics and elections.  Either democracy must be renewed, with politics brought back to life, or wealth is likely to cement a new and less democratic regime -- plutocracy by some other name."

This passage concludes Kevin Phillips' book Wealth and Democracy. Although it was written in 2002 -- a decade has passed and Bush has given way to Obama -- these observations are equally (and painfully) valid today.  Indeed, as many have argued, the situation is now much worse.  

As he documents in his book, immense personal wealth in the hands of the few has fatally corrupted the democratic process in America.

And, to be clear, this is more than a domestic US problem -- it matters to some of us living elsewhere in the world.  But, before we consider the international externalities, first a brief snapshot of how wealth is distributed in the United States, and a look at how the wealthiest few will ensure that their dominance finally becomes institutionalized.

Follow the Money  

Look for the source of wealth for the very richest Americans, and you will find the name of a large and successful corporation.  This is obvious enough -- yes, corporations are the source of rich peoples' wealth.  Got it.  So what.

The "so what" is that the elite have used their immense wealth and power, gained through their corporate entities, to game the system to ensure they continue to get an ever-increasing share.  It is the corporation that delivers the great wealth used by the elite to purchase the political process, which in turn furthers the interests of the corporation -- an infinite loop, leading to the plutocracy (or worse) of which Phillips so presciently warns.

The richest 1% 

America is awash in cash -- at least at the very top.  

The largest corporations report record-breaking profits, and their presiding CEOs receive record-breaking bonuses.  CEO compensation, including stock options and other benefits, has risen to as much as 500 times that of the average worker.  In the period from 1980 to 2006 the richest 1% of Americans tripled their after-tax percentage of the nation’s total income, while the bottom 90% saw their share drop more than 20%.  Between 2002 and 2006 an incredible three quarters of all the economy’s growth was captured by the top 1%.  And a 2009 report showed that the explosion of wealth for the 400 richest Americans brought their total combined wealth to $1.57 trillion, which is more than the combined net worth of 50% of the entire US population -- to emphasize the point, just 400 Americans have more wealth than 155 million (!) of their countrymen, combined!  

A growing literature shows in ever-starker terms that the rich are doing very well, indeed -- and that same literature shows they are doing so at the expense of the "other half". 

The struggling majority  

The pain is acute for a growing majority of Americans:
 - America has the highest poverty rate in the industrialized world.  Over 50 million Americans rely on food stamps, and as many as 50% of US children will do so at some point.  In 2009, one out of five US households didn’t have enough money to buy food and, in households with children, this number rose to 24%, as the hunger rate among US citizens has now reached an all-time high.
 - The Republican furor over Obamacare conveniently ignores the fact that Big Pharma, Insurance and the medical operators are flourishing at the expense of the general population.  Of the 1.4 million bankruptcies reported in 2009, medical bankruptcies were responsible for more than 60% of them, and over 75% of these were filed by people who have healthcare insurance.  Although America has the most expensive healthcare system in the world, and even though its citizens pay twice as much as any other country, the quality of care ranks only 37th in the world.
 - Since the economic crisis began, Americans have lost more than $5 trillion from their pensions and savings, and $13 trillion in the value of their homes.  Older workers have lost an average of 25% of their 401Ks, and personal debt has risen from 65% of income in 1980, to 125% today.  Over five million families have already lost their homes, and it is expected that by 2014 a total of 13 million will have lost theirs -- as it is, 25% of current mortgages are underwater.  Statistics show that there are over 3 million homeless Americans and, of that group, the fastest growing segment is single parents with children.
 - But prison is, at least, one place where more Americans are finding a home.  With an inmate population of 2.3 million people, the US warehouses more people than any other nation in the world.  The incarceration rate of 700 per 100,000 citizens far exceeds that of China (at 110 per 100,000), France (at 80 per 100,000) and Saudi Arabia (at 45 per 100,000).  And the prison industry represents a thriving -- and increasingly, corporatized -- growth sector.  A report titled Incarceration Nation revealed that “a new prison opens every week somewhere in America."
 - The US government understates the national unemployment rate, and has done so for many years.  The most recently publicized number for June -- 9.3% -- is highly deceptive.  Known as the U3 rate, it excludes those who have given up, the so-called "discouraged workers", as well as those part-time workers seeking full-time employment.  By this reckoning, the real unemployment rate -- known as U6 -- is over 20% for June.  But the government must hide the real numbers, since it has sanctioned the rush to off-shore American jobs by multi-national corporations, and the "hollowing-out" of American industry.  As Phillips wrote "some managements hoped to no longer process or manufacture anything in the United States, but merely to import and distribute goods, much like the ill-fated Enron transformation from producing company to financial trader."
 - And, most recently, the Pew Research Center reports that the median wealth of white households is 20 times that of black households, and 18 times that for Hispanic households.  This newly released information from the 2009 census also revealed that between 2005 and 2009 the inflation-adjusted median wealth in white households fell by 16%, compared to a 53% drop for Hispanic households, and a 66% drop for black households.

The disparity between rich and poor in America could hardly be more stark -- the ultra-wealthy with their enablers and courtiers, and the millions struggling in a system beyond their control and comprehension.  But, for the elite, the disparity can be widened, the limit has not yet been reached; this is a quest that demands the unassailable, unyielding and unrepentant devotion and belief of its corporatist adherents.  This is where Phillips' imbalance of wealth meets his democratic deficit, where market theology and unelected leadership vanquish participatory democracy.

The Gilded Age, then and now

It was Mark Twain in 1873 who coined the term, "Gilded Age".  And one of the first of his contemporaries to draw the line connecting excessive personal wealth with the power of the corporation and the flagrant corruption in politics was James B. Weaver, when he declared in 1880 that the nation's founders had imagined a system in which "the wealth of the country should diffuse itself among the people according to natural and beneficent laws.  They did not contemplate these corporations that are as real entities as are individuals."  

And so began the tensions between populist and corporatist forces in American politics that have raged, ebbed and flowed to the present day.

The populist messaging has remained remarkably consistent down through the years.  Theodore Roosevelt famously said, "There is absolutely nothing to be said for government by a plutocracy, for government by men very powerful in certain lines and gifted with a money touch, but with ideals which in their essence are merely those of so many glorified pawnbrokers."  Fast-forward to the near-present and in 1996 Senator Bill Bradley elaborates further, "Money not only determines who is elected, it determines who runs for office.  Congressmen will listen to the 900,000 who donate to their campaigns ahead of the 259,600,000 who don't."  And then, as Democratic presidential candidate in 2000, he described the corruption of the 1990s as "a story Americans have heard before.  Its the story of the late 19th century, the era of the spoils system and recurrent scandals, when politics became hostage to the money power of Wall Street financiers, railroads and industrialists, when each senator was virtually the property of whatever magnate had engineered his appointment."

Candidate McCain, in the Republican primaries of the same year, showed common cause when he too identified the monied influence in political life, "we know what the influence of this big money is on the legislative process and how its taken the government away from the American people and given it to the special interests...in 1907, Theodore Roosevelt, the great reformer, was able to get corporate contributions to American political campaigns outlawed, because the robber barons had taken over American politics."

The concentration of wealth, both then and now, was and is aided by the corruption of politics on the one hand and the general suasion of the of market idolatry and economic Darwinism on the other.  As Phillips notes, "No other nation has matched the United States for the overall centrality of private corporations (including banks) in its economic growth and political life." 

And today, the tensions between populist and corporatist forces have been played out, and corporatism is again (and perhaps finally) ascendent -- against all that was first imagined for America, markets have been turned into the vehicle for human governance.        

Unelected is Unaccountable  

The quiet gains and carefully implemented infrastructure of the right wing over the past 30 years are now coming to full fruition.  The much publicized success of the Brothers Koch in subverting the general welfare merely continues a long and distinguished tradition of right-wing patrons.  A network of think-tanks and journals, foundations, lobby groups, legislative councils and advisory groups have prepared the ground for one final assault.  And, with the Citizens United case, the Supreme Court justices, themselves unelected and unaccountable, have opened the door to untold sums for the final purchase of America's democracy. 

The largest transfer of wealth in the history of the world has set in place the final conditions necessary for the conservative transformation of government.  As the 2012 election cycle approaches, the wealthiest Americans will bring to bear the full weight of their own unelected and unaccountable power to seal the deal, in what will be the most expensive election in history.  And it doesn't matter who "wins"; as Chris Hedges has said, "the war is over, and they won".  And yet, it seems completely incomprehensible that so many could be delivered into penury while so few live at the very edge of imagined privilege. 

When victory does come, the unelected will be prominent in sharing the spoils -- the wealthy, the corporations, the PACs of all description, the Chamber of Commerce, the foreign interests, the think-tanks and pundits and lobbyists.  Even the Tea Party, a so-called populist movement, now vaingloriously holding the line in Congress against any taxation, is really a creation of corporate power that provides cover and misdirection as the monied interests affect their real agenda -- more useful idiots.  They are all the 21st century equivalent of TR's glorified pawnbrokers.  

And so too, hidden in plain view, are the politicians themselves.  It may be stretching the point, but they are perhaps as unelected as they are unaccountable.  Using Bradley's definition, incumbents who are bought and sold so openly can hardly be considered truly elected; and they have certainly ceased to reflect the will of their constituents, unless it is in the service of their major contributors.  Incumbents know that corporate funding and a fierce market theology are the keys to re-election, and this certainty allows them to ignore public sentiment.  It explains how lawmakers consistently refuse to acknowledge the will of the people, including their desire to see increased taxation of the rich and corporations, the protection of Medicare and Medicade, and a significant curb on military spending.

As Rob Johnson of The Roosevelt Institute said in a recent interview, "The politics of the United States in this crisis period does not represent the people -- it represents a very narrow segment of the population who does the fund-raising."

The Ripples Beyond America 

In his book Phillips likened US corporations to "latter-day English-speaking conquistadors".  And it is true, American economic growth was greatly facilitated by the intimate linkages between the business class and foreign policy -- global economic domination by America is based on these conquistadors (and the war machine to back them up; see Randolph Bourne's War is the Health of the State, and Smedley Butler's War is a Racket for some historical flavor).  This highly successful partnership traces an arc from the days of the United Fruit Company to the oil and mining concessions in Iraq and Afghanistan today -- indeed, almost every US foreign policy initiative can now be understood in terms of the benefits it delivers to American multi-national corporations.  This lesson is not lost on others. 

Political aspiration is cut from the same human cloth the world over.  While perhaps not the smartest bunch, politicians are generally well attuned to what works, and they will emulate the most proven path to acquiring and maintaining power.  Conservative Prime Minister Stephen Harper, for example, wants Canada to play a greater role in the world -- he has a vision.  Accordingly, he has sought to portray a more muscular foreign policy, even as he goes about the business of "selling" Canada.  He has linked foreign policy and business as part of a broader and harmonized international economic strategy, as was demonstrated by the G-20 Toronto Summit Declaration of last year.  At that meeting, the participating heads of state (lead by the US and Canada) committed as a unified group to reduce their deficits in half by 2013, and to stabilize government debt-to-GDP by 2016.  The austerity measures needed to meet these targets are playing out this very day in the US Congress in the debt ceiling/budget reduction trade-offs that Obama is trying to orchestrate; such austerity programs are clearly linked to a broader palate of corporatist policies that already favor the wealthy at the expense of the poor. 

So, here's the real worry about where corporatist democracies are headed -- as inequality mounts, as the wealthy solidify their control over government, and as an unelected elite inflicts more and more pain on the unrepresented majority, a last remaining avenue for real reform is all but lost -- it seems the state has developed a concerted strategy to eliminate public protest and dissent.

Public protest, as an important catalyst for social change, is fast disappearing.  Since 9/11, governments around the world (at the insistence of America) have committed enormous resources to their internal security services.  No country can hope to duplicate the massive US security infrastructure, but most emulate it as best they can.  We are soothed and assured that these are investments needed to counter the jihadists (!) in our midst.  But they also serve (by happy coincidence) as very useful platforms for coordinated response to domestic demonstration (showing the wisdom of Rahm Emanuel's dictum "you never want a serious crisis to go to waste", and the prescience of Naomi Klein's thesis in The Shock Doctrine).  In fact, this harmonized and highly integrated approach to quelling public protest is now regularly applied.

Let us turn to one recent example.  At the G20 conference in Toronto last year more than 1000 people were arrested outside while the attendees inside institutionalized the "urgent" need for austerity.  Many of the protesters were held without charge, only to be released after several days, with no recourse for the violation of their rights.  The government of Canada invoked "unlawful assembly" as justification for its actions.  It was clear that police and military planning had begun months in advance of the protests; the enforcement activities were coordinated across jurisdictions, agencies and geographic boundaries.  The police action had a chilling affect on those who participated -- it was intended to do so, it was intended to undercut mass protest.  The Ontario Ombudsman called this sordid affair "the most massive compromise of human rights in the history of Canada".  

Ralph Nadar recently asked, "What could start a popular resurgence in this country against the abuses of concentrated, avaricious corporatism?"  It seems government understands that austerity and economic hardship presents the most likely spark to protest, and has prepared accordingly. 

If it can happen in Canada, in this modest and generally amiable place, it can happen anywhere. 


In concluding Wealth and Democracy, Kevin Phillips warned that market theology and unelected leadership have lead to an imbalance in politics and elections in America.  It is an imbalance that -- if not soon corrected -- will shatter the last illusion of democracy.  And an America that openly frees itself from even this modest constraint validates the model that endangers us all.

Update.  Toward the end of this piece, I referred to the worry that the state has developed a concerted strategy to eliminate dissent and public protest.  The example to which I referred was the G20 Conference held in Toronto last year.  I would urge you to access more on this bit of constitutional over-reach by the Canadian government -- go to the "Videos" page of this blog, where you will find a large number of links in Item 4, all drawn from the RealNewsNetwork site and all relating to the enforcement activities that went well beyond what is allowed by the Canadian Constitution. 

By David.

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Your musical accompaniment for the day:  Bitches Brew, Miles Davis.  Enjoy.

Wednesday, 27 July 2011

Easier to Attack the Weak

I am re-reading Kevin Phillips' book Wealth and Democracy, revisiting some important points on the rise of the ultra-rich and their collective impact on democracy.  The book is an excellent study on how wealth has been driven by corporations in America, and how that wealth has taken over the legislative process -- and subverting democracy. 

The book ends by warning that the final domination by monied interests in America is at hand, and that such an outcome will lead to a system that is worse than plutocracy (he only hints at fascism, so I'll make that final leap).

And just last week I read a report by the Conference Board of Canada indicates that here we are becoming a nation of greater inequality. Although it's the subject of a much longer post, it is more and more evident that Stephen Harper's government has our country moving in a similar direction.

And, as I continue to trawl my favorite online sites, I came upon an interview with Rob Johnson of the Roosevelt Institute.  Several of the issues discussed in this segment touched on the writing that I will soon post so, to whet your appetite, I would encourage you to watch the interview on RealNewsNetwork here.

What I found interesting, if not more than a little disturbing, was how Obama recently met with conservative politicians and pundits (at George Will's house, no less) and assured them that he intended to tackle the entitlement issue.  Johnson said that Obama is not really a Democrat (and, as I was taken in by the euphoria, I find myself in total agreement) -- he was only in the state senate for a few years, and he really hasn't lived the Democratic vision.  He talks a good game, as we've seen, but he really sees himself as the Triangulator-in-Chief.  He acts the great negotiator and, in the process, has given much too much away to the Republicans.

As Johnson says, Obama will take from those who are not represented, since he can't take from the rich and the connected.  Democracy at work.

By David.

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Your musical accompaniment for the day:  Pack My Jack, by JJ Cale, from Shades.  Enjoy.

Wednesday, 20 July 2011

The View From Canada


It's not all about America.  Well, not all the time.

The Brits are front and center with this wonderful and riveting drama over News Corp (which I said I wasn't going to write about anymore, dammit!), which is all-consuming in the UK media.  And that same story is fascinating American readers, mainly because it has stirred concerns about the potential hacking of some of the 9/11 victims' phones -- although, I'm stumped as to why those same Americans so easily accept the industrial-level data mining, through phone and email surveillance, to which their government subjects them every day.  Here in Canada, today's Globe and Mail (self-proclaimed as Canada's National Newspaper) is bursting with news and commentary on the Murdock scandal, from the front page to the business section -- only the sports pages are spared, not that there's much of a sports section in the Globe, anyway.

Still, surveying the situation from up here in the Great White North, if its not all about America, it comes awfully close.

After the Murdock story, the debt ceiling issue dominates coverage in the US, just as it gets its share of commentary pretty much everywhere else, including Canada.  Congress is locked in a battle against an August 2nd deadline over if, and how much, to raise the limit on government borrowing beyond the existing $14.3 trillion (!) cap.  The Republicans oppose any increase that is not accompanied by severe reductions in the deficit, reductions they've targeted at the expense of programs such as Medicare and Medicade, designed to help those most in need.  And, as usual, most everyone expects Obama and the Democrats to cave.  There's perhaps some small irony in the fact that the administration of George W. Bush had no difficulty raising the debt ceiling 7 times, accompanied as these increases were by massive reductions in the tax "burden" for the wealthy.  Of course, and as always, no reduction to the $650 billion budget for America's war machine will ever be contemplated, where the potential for savings is enormous, like the return of forces from such hotspots as Germany, Japan and Korea -- or, and here's a thought, the scaling back of the criminal aggression in Afghanistan, Pakistan and Libya (Canada was a willing player in Afghanistan and continues to participate in Libya, though, I'm not sure, in either case, why).   

Compounding the situation, and against all that is rational, virtually every Republican in Congress, including those running for the presidency, has signed an "oath" that they will not raise taxes in any form, including the simple closing of loopholes for corporations or wealthy individuals.  Even the American Chamber of Commerce has warned against the risk of default arising from this bit of gamesmanship, and recently both Moody's and Standard and Poors have indicated that they may downgrade America's credit rating over the impasse on the debt ceiling.  

This game is being played out against the backdrop of the coming 2012 election cycle and reelection strategies of the two parties, where $billions are now being funneled into the campaigns by unelected corporate interests (and so the purchase of the democratic process continues).  All the while, unemployment rises and home foreclosures continue.  Default by the US treasury will have an uncertain but likely disastrous impact on the world's financial system so, in this case, it is all about America.   

And beyond the US borders, the IMF warns that potentially destructive and unpredictable contagion risks spreading to the global economy if Europe's leaders don't quickly contain the euro debt crisis.  As our Globe and Mail reported today, "The crisis is no longer just about Greece, as investors punish Italy and Spain...Irish and Portuguese government bonds were downgraded to junk status last week by major rating agencies, virtually freezing them out of the debt markets."  Recall, if you will, that the initial crisis began in Greece, where the government ran aground on the dubious strategies proposed and enacted by Goldman Sachs (oops, another American connection).  

Back home for a moment.  In a column by Jeffery Simpson in today's Globe, we learn from the Conference Board of Canada that we are becoming a more unequal society.  Like the trends in the US and Britain, the richest group of Canadians saw their income rise at a disproportionate rate relative to everyone else.  Using the Gini coefficient, which tracks inequality on a scale of 0 to 1 (where 0 represents a world of total equality) The Conference Board ranks Canada 12 among 17 comparable countries.  As Simpson reports "Canada's Gini score is 0.32, slightly worse than Australia and Germany, and far behind Denmark, Sweden, Finland and Norway.  The United States and Britain, two countries against which Canada measures itself, are the worst performers - that is, the most unequal societies of the 17."  Proof, perhaps, that Prime Minister Stephen Harper's grand vision for our country is firmly taking hold.  

But in the end, with all the intrigue and delight over the News Corp scandal, given all the brinkmanship and drama over the potential of default by the US, and the news that Canada is becoming less and less equal, just like the US and Britain, we learn that 11 million of our fellow human beings in the Horn of Africa are facing death from starvation in the worst regional drought in 60 years.  

So, happily, its not about America all the time.

By David.

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Your musical accompaniment for the day: Tom Sawyer, Rush.  A Canadian rock band like no other.  Enjoy.

Monday, 18 July 2011

ALEC is the Real Front Page Story

Amid the breathless, minute-by-minute reporting of a certain media mogul's unfolding troubles, there is a story of far greater importance, one that has been totally ignored by the corporate media.

Look to the major print and television outlets and you will see the coverage dominated by News Corp and the debt ceiling negotiations.  You will not find a single reference to the subjugation of the democratic process by the American Legislative Exchange Council.  ALEC provides pre-packaged legislative templates for right-wing politicians.  Think of it as Legislation for Dummies.

In her very well written article for Truthout, Allison Kilkenny writes: "Thanks to the work from the Center for Media and Democracy and investigative journalists like Beau Hodai, we now know that ALEC, a front group for major corporations, the Koch brothers and right-wing lobbying groups, actively disseminated model bills promoting its agenda to state leaders."

The Truthout story goes on to note that "ALEC creates plausible deniability for state legislators by claiming it's not lobbying, of course, but merely making friendly suggestions and, in turn, the legislators ultimately reap the rewards of being extra nice to ALEC's corporate clients."

And at The Nation, John Nichols provides more excellent coverage.  His recent article begins with the following passage:
Never has the time been so right,” Louisiana State Representative Noble Ellington told conservative legislators gathered in Washington to plan the radical remaking of policies in the states. It was one month after the 2010 midterm elections. Republicans had grabbed 680 legislative seats and secured a power trifecta -- control of both legislative chambers and the governorship -- in twenty-one states. Ellington was speaking for hundreds of attendees at a “States and Nation Policy Summit,” featuring GOP stars like Texas Governor Rick Perry, former House Speaker Newt Gingrich and House Majority Leader Eric Cantor. Convened by the American Legislative Exchange Council (ALEC) --“the nation’s largest, non-partisan, individual public-private membership association of state legislators,” as the spin-savvy group describes itself -- the meeting did not intend to draw up an agenda for the upcoming legislative session. That had already been done by ALEC’s elite task forces of lawmakers and corporate representatives. The new legislators were there to grab their weapons: carefully crafted model bills seeking to impose a one-size-fits-all agenda on the states.

Finally, you can see in a video from The Ed Show on MSNBC additional material on ALEC.  In the interview with John Nichols of The Nation and Lisa Graves of the Center for Media and Democracy, we learn that the strategy of putting legislators and corporations together in common cause goes back almost 40 years.  We also learn that corporations pay an annual fee of between $7 and $25 thousand to participate in this one-stop marketplace with law makers.

And for that investment, ALEC has generated an enormous return. Corporations and legislators meet to vote on proposed laws before they are sent up to the legislatures, and this arrangement has produced over 500 anti-labor laws of the type seen in Wisconsin and elsewhere. According to the interview on The Ed Show, ALEC was at the fore-front of the highly successful fight against healthcare reform, and particularly against the public option.

And so, whereas News Corp provides us a symptom of our malady, the ALEC story points more accurately to the root cause -- and that is, "money and power in the service of money and power".

It is clear that they are different by degree, but they are two of the many examples of unelected power in our system that are both unrepresentative and unaccountable.

Update #1.  After posting this commentary, I found Ralph Nadar's article on the Supreme Court and its abuse of (unelected) power.  Go to Nadar.org for this must-read on the dominance of unelected, unrepresentative and unaccountable power.

Update #2.  Its Tuesday the 19th and still the top stories in the mainstream media are the debt ceiling negotiations and News Corp. Same is true here in Canada, with much fretting about potential default in the US.  Even in the online sites and blogs, there is more fascination with Murdock than could ever be warranted.  Don't waste your time on this theatre -- go instead to Nadar's site for and read his latest commentary on the Supreme Court.

By David.

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Your musical accompaniment for the day: JS Bach, Brandenburg Concerto No. 2 in F, BWV 1047; English Concert & Trevor Pinnock.  Enjoy.

Friday, 15 July 2011

No More News Corp.



The clear and stated focus of Corporate Constraint is "money and power in the service of money and power".   The commentary I've made these last few days on the furor over the business practices and corporate culture of Rupert Murdock's media empire is consistent with my blog's primary focus -- he is the embodiment of all this site holds harmful to the world.  His is the epitome of the dangerous corporate culture that disregards all externalities in pursuit of the maxim to maximize.

In short, for the Corporate Constraint blogsite, this story is a gift!

And it's a gift that keeps on giving.  I came upon some interesting comments today from Conrad Black, another disgraced media baron, convicted of fraud (and a Canadian, don't you know, although he renounced his citizenship); he had this to say about Rupert Murdock:
"Mr. Murdock has no loyalty to anyone or anything except his company.  He has difficulty keeping friendships; rarely keeps his word for long; is an exploiter of the discomfort of others; and has betrayed every political leader who ever helped him in any country, except Ronald Reagan and perhaps Tony Blair."

You know you've hit rock bottom when a convicted white collar felon like Conrad Black calls you out.

There will be much more written in the days to come, some directly pertinent to the unfolding story, and some novel asides and commentary.  It seems clear, though, that the arc of this story will have a profoundly negative impact on the Murdocks and News Corp.
At this point, going into the weekend, the following provides the most recent developments for News Corp;
 - Rebekah Brooks has resigned, finally, as has Les Hinton, publisher of the Wall Street Journal
 - Rupert Murdock has apologized to the Dowler family
 - The Murdocks have agreed to face a Commons committee meeting next week
 - Share prices for News Corp continue to drop, and the losses are in the $billions
 - The FBI has opened an investigation into allegations that News Corp sought phone records of 9/11 victims.     

I don't intend to allocate much more of this site's space to details of the unfolding story; it has gained huge notoriety around the world, and so it won't benefit from any more commentary from me.

But the Murdock story remains very important for Corporate Constraint. Because the brand recognition surrounding this story is so strong, it provides an extremely powerful springboard from which I will launch more interesting inquiries into such issues as the concentration of ownership in the media, and the degree to which unelected political power drives critical events.

So, as the title of this post says, there will be no more of News Corp., just as I hope News Corp. will be no more.

By David.

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Your musical accompaniment for the day: "I Robot" and "I Wouldn't Want to be Like You", from I Robot (expanded edition), The Alan Parsons Project.  Enjoy.
  

Wednesday, 13 July 2011

Cheer the Fall of Rupert Murdock

Senator Jay Rockefeller called on Congress Tuesday to begin an investigation into whether News Corp. Chairman and CEO Rupert Murdoch oversaw reporting activities in the U.S. similar to those that have recently rocked the establishment in Britain.  Said the Democrat for West Virginia, “I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans.  If they did, the consequences will be severe.”

You could dismiss his comments as bluster, a politician seeking topical relevance using 9/11 as an ever-convenient backdrop.  But the man does know a thing or two about the techniques of electronic surveillance and information gathering.  As Chairman of the Senate Intelligence Committee, Sen. Rockefeller has been a strong advocate of the Patriot Act and FISA, and in his role no doubt benefits from the industrial level data mining to which the government subjects its citizens.  Still, setting aside for a moment the cold irony of Sen. Rockefeller's rhetoric, Americans would be well advised to support any forum that shines a light on Rupert Murdock's media empire and his political power.  In the incestuous world of business and politics, thickly populated as it is by the most odious figures, Rupert Murdock represents a high-water mark.

From the time he entered the British market in 1969, Murdock has amassed enormous power to shape politics in England.  His ideology and his agenda live on the extreme right of the spectrum.  He began with the purchase of The Sun, a working class paper, which he promptly turned into a political rag to attack the left.  As a newspaper man he has very successfully relied on sex, scandal, and character assassination to sell papers and amass power.  His empire in Britain has grown to also include The Sunday Times and a substantial interest in British Sky Broadcasting (BSkyB) -- News of the World having just been shuttered over the phone hacking scandal.

Before Tony Blair ever rose to prominence, Murdock's papers portrayed Labor leader Neil Kinnock as mentally unbalanced, just one of the many sensational -- and false -- examples of personal attack.  Only after Tony Blair went to Australia, in a pitiful pilgrimage to bow and scrape before the throne, did the Murdock machine swing in favor of Blair and propel him to power.  Of course, Blair did a deal, agreed to toe the party line, which lead to Britain's disasterous support of Bush and the Iraq War.  Murdock and his pet Rebekah Brooks were very close with Blair and his wife Cherie.  But the old bugger is true to his corporatist and capitalist ideology.  When he sensed that Blair's successor Gordon Brown would not be suitably "reliable", Brown's personal information and family life became another of the thousands of targets on which News International trained its sights.  And Murdock then happily threw his weight to David Cameron and the Conservatives, and it is now the Camerons with whom Rebekah Brooks shares that cozy social world.

The recent unraveling of the Murdock empire in Britain has shown a callous disregard for both the rule of law and common decency.  The hacking of phones -- from a 13-year old murder victim to the Prince of Wales --  the corrupting of police, the blagging of personal information and the harassment of public officials, these are all clear evidence of morally bankrupt personal and business culture.   

It is a culture that is thriving in America.  And it is a culture that has attracted like-minded partisans from the Republican Party, many of whom are paid contributors to Fox "News", some of whom use that safe haven as a platform to launch their bid for the Presidency.  It is a culture that needs to be completely discredited, and completely discarded.     

The Germans have a word for it -- the Germans have a word for most everything -- and that word is schadenfreude.  When you think of Rupert Murdock, his vast fortune and enormous unelected political power, his media empire built on a brutal conservative ideology, you might feel a definite sense of pleasure at his current troubles.  It never happens often enough, or to as many people as truly deserve it, but the wheel does occasionally does come 'round full circle (perhaps you remember Conrad Black).

As the revelations continue to mount in the NoW hacking story and the contagion spreads to News Corp. and its crown jewels in the US, in what may become the blessed downfall of Rupert Murdock, Americans might begin to reclaim their collective voice as a tentative first step in the long road back to democracy.

By David.

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Your musical accompaniment for the day: Ravel, Bolero; Seiji Ozawa and the Boston Symphony Orchestra. Enjoy.

(This article also posted at OpEdNews on July 14.)

Monday, 11 July 2011

Spotlight on Corporate Crime Reporter

As I move forward with Corporate Constraint, I will mix my posts to include commentaries intended for wider publication -- the first four posts on this site -- and the daily blogs of a less formal nature.  Today's will be of the latter variety.

There are many progressive sites to which I regularly turn for updates, analysis and commentary.  A few of my favorites include Truthout, Antiwar, Counterpunch, Democracy Now and The RealNewsNetwork.  And I regularly visit The Times and The Post, and in Britain The Guardian and The Independent (the Globe & Mail here in Canada).  In future, I will occasionally reproduce material from these sites, or highlight a well written or important story.

In the area of corporate reporting and watchdog sites, there are several sites that I return to regularly: CorpWatch, Center for Corporate Policy, Taming the Giant Corporation (a Ralph Nadar conference site from 2007) and Corporate Crime Reporter -- it is the final entry from this list that I'll highlight today.

The Corporate Crime Reporter first appeared on April 13, 1987.  It's first interview was with the premier corporate crime prosecutor of his day, Rudolph Giuliani, then U.S. Attorney in the Southern District of New York.  At the time, he was prosecuting the likes of Michael Milken, Ivan Boesky and Marc Rich (President Clinton subsequently pardoned Mr. Rich; as it happened, Marc Rich’s wife was dumping big cash into the Clinton library).  Mr. Giuliani subsequently cashed in his chips, made nice with Corporate America, and become Mayor of New York; fortunately he failed miserably when he tried to cash in his 9/11 chips in his run for the Presidency.

On the CCR website you will find interviews with leading legal minds, updates on recent corporate criminal investigations, and reports such as "Twenty Things You Should Know About Corporate Crime".  What follows is some very interesting material from that report.  So pay attention -- this shit's important!

Item 1
 - Corporate crime inflicts far more damage on society than all street crime combined.
 - Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.
 - The FBI estimates, for example, that burglary and robbery – street crimes – costs the nation $3.8 billion a year.
 - The losses from a handful of major corporate frauds – Tyco, Adelphia, Worldcom, Enron – swamp the losses from all street robberies and burglaries combined.
 - Health care fraud alone costs Americans $100 billion to $400 billion a year.

Item 2
 - Corporate crime is often violent crime.
 - The FBI estimates that, 16,000 Americans are murdered every year.
 - Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.  These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.

Item 3
 - Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live. 
 - They have marinated Washington -- from the White House to the Congress to K Street -- with their largesse. And out the other end come the laws they can live with.  They still violate their own rules with impunity.  But they make sure the laws are kept within reasonable bounds.
 - An excellent example is the automobile industry.  Over the past 30 years, the industry has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws.  Today, with very narrow exceptions, if an auto company is caught violating the law, only a civil fine is imposed.
 - More recently, Wall Street has demonstrated that it breaks the rules that it writes, and then negotiates the most favourable of terms in settlement (see my article below "Corporate Crime of the Week: JP Morgan & Chase Co.").

Item 4
 - Corporate crime is underprosecuted by a factor of say – 100.  And the flip side of that – corporate crime prosecutors are underfunded by a factor of say – 100.
 - Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.  
 - For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
 - For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
 - For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
 - For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.
 - For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job.  Only a few district attorneys across the country have historically investigated workplace deaths as homicides.

Item 5
 - Beware of consumer groups or other public interest groups who make nice with corporations.
 - There are now probably more fake public interest groups than actual ones in America today.  And many formerly legitimate public interest groups have been taken over or compromised by big corporations.  Our favorite example is the National Consumer League. It’s the oldest consumer group in the country.  It was created to eradicate child labor.
But in the last ten years or so, it has been taken over by large corporations.  It now gets the majority of its budget from big corporations such as Pfizer, Bank of America, Pharmacia & Upjohn, Kaiser Permanente, Wyeth-Ayerst, and Verizon.

There are many more excellent points in this piece "Twenty Things You Should Know About Corporate Crime", so do go to the site and read the full document.  This brief glimpse is important, though, to show how corporations act with impunity, even after they have lobbied the politicians and written their own rules.

Corporations will always act in their own best interests, in the manner most likely to maximize shareholder wealth.  We need to understand that fact and, in recognition of it, regulate and control those behaviors that create harmful externalities.

By David.

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Your musical accompaniment for the day: "Standing Around Crying" from Muddy Water Blues, with Paul Rodgers and David Gilmore. Great vocals from the legendary front man for Free and Bad Company, great guitar work from the Pink Floyd alumnus, and a wonderful fat sound from the rhythm section.  Enjoy.

Thursday, 7 July 2011

Time For That First Bold Step To Action!

It is well past time that we rouse ourselves to action.

The evidence is overwhelming, and it continues to accumulate every day -- large corporations are at the heart of all the major trends that will increasingly, profoundly and negatively affect our lives.

There is an explosion of books, video documentaries, websites and online forums from which you can gain insight into the disasters being perpetrated by Big Business, disasters in which we are all complicit through our continued inaction.

It is, of course, necessary that we become informed and stay current, but we need to do more than just agree amongst ourselves.  The echo chamber on the progressive side is safe and warm, but it is dwarfed by its massive and well-funded counterpart on the right -- in the face of so insurmountable a force, it is not surprising that any initial action will be halting and tentative.  It may be trite to say that nothing was ever accomplished without a first step, but it doesn't make it any less true.  And the consequences of simply wringing our hands on the sidelines are too terrible to contemplate.

A Simple Start.  So this post is about doing something -- dare I say, anything -- as the first step in what must necessarily become a longer-term effort.  We must move outside our comfort zone and take action.

And as I contemplated that thought earlier today, I came across a four-part interview by TheRealNewsNetwork of Jeff Madrick, author of a new book "Age of Greed", on the thirty-year trend by Wall Street toward financial speculation and away from its traditional role of financing the manufacturing sector.  And at the end of the series, Paul Jay asked Madrick, "so what can we do?", referring to those of us -- the great unwashed -- not close to the money and power that perpetuates the system.  And it was satisfying to hear Madrick's response; "start organizing...get involved".  It was the obvious answer, worthy of Howard Zinn -- one that he had himself given countless times.  It does start with that first step.

So if you have roused yourself from your lethargy, if you have begun to educate yourself on the issues of water, energy, food and climate, and their exploitation by Big Business, you may be ready to take that first bold step to action -- and not a moment too soon.  Since we like the comfort of choice when making an important decision, here follows a partial list from which you can make a selection, and to which you can add your own contribution.  Of course, each is worthy of greater comment and discussion than space permits, just as each will be most affective when part of a larger bundle of actions.  But this is, after all, just a start:  
 - Join a food cooperative;
 - Join a credit union;
 - Make specific ecological decisions about how you live;
 - Make informed choices about the consumer goods you purchase;  
 - Hold your member of Parliament or Congress, and/or a powerful corporation, accountable on the issues;
 - Join an activist organization, and then actively participate;
 - Take the issues to your circle of friends and associates, interact with those who share your concerns, and with those who don't;
 - Put the laptop down; change will not come by raging from your couch.

You may have already begun to act, or you may feel this list is far too simplistic.  Fair enough.  But there are countless others who remain uninformed, and many who are aware but have not yet taken even these basic steps.  And, by the way, this is the easy part!  None of these or similar measures remotely begin to address the systemic issues that underly the unfettered power that multi-national corporations now enjoy.  These simple measures are the "training wheels" that allow us to build sustainable habits as we gain experience and community in our activism -- to consistently employ these actions in our daily lives is just the first stage in a longer and deeper commitment.        

Removing The Training Wheels.  I began to understand that next level of commitment when I came across the results for a conference in 2007, organized by Ralph Nadar.  It was called "Taming the Giant Corporation" ( http://www.tamethecorporation.org/ ), and in this three-day session you will find the video presentations on various aspects of corporate behavior.  I found one of the presenters to be particularly insightful; Gar Alperovitz, Professor of Political Economy at Maryland University, made several comments that warrant repetition, and one in particular that best captures the true nature of change in relation to large corporations.

He reminded his audience that the progressive movement, linked as it was to labor, fueled many of the most important social reforms, the very reforms that big business is now effectively tearing apart (have you seen today's reports of Obama's capitulation on Social Security and Medicare?).  The dramatic diminution of labor today, among many other factors, suggests that there will be no easy reforms at the national level (truer today than four years ago).  The pain is most acute at the local level and, Alperovitz suggests, this is where we'll find -- as a start -- the best hope for a new economic system.

He further suggests that we think not of taming the corporation, but that we think in the context of moving beyond the corporation.  But, in any case, he asks, "what do you do with large economic entities in any system?".  They will remain an important part of a new economic system, so how do we construct real world change with respect to large scale industry?

Alperovitz suggests that we begin with localized solutions.  Alternative systems of economic control are increasingly modeled on some sense of common ownership.  Collective ownership models have begun to flourish at the local level, in part because it responds to the primary locus of the pain, and in part because it anchors local communities -- such economic entities don't move to Mexico, or Malaysia.  And, as Alperovitz notes, these alternative systems "teach people about models of cooperation that are different from the corporate model", and how to use the power of ownership to constrain corporate behavior.

As he also said, the steps in the process of change will be difficult if we really want to "transform the largest and most powerful political economic system in the history of the world".  To me, though, the most striking comment he made, and certainly the one of singular relevance in the context of taking action, was that "if you want to play this game, in this process of change, the chips are decades of your life".

I recently reached out to Professor Alperovitz and asked what progress he felt had been made in the four years since the Nader conference.  He sent along two links relating to his work on alternative models in The New Economy that I hope you will find interesting and inspiring:



An important take-away from these pieces is that alternative economic models that focus on local outcomes and benefits can provide a wonderful springboard to the evolution of emerging business entities at the national level.  Professor Alperovitz is cautiously optimistic: "And indeed, there's an explosion throughout the Middle East; something was stirring below the ground, something that is likely to take decades to develop from its first explosion.  You can find similar patterns throughout history.  The feminist movement was unpredicted.  The environmental movement was unpredicted.  The explosion of the civil rights movement was generally thought likely, but it was unpredicted when it happened...explosive change is as common as grass...that doesn't mean it always happens, but I see developments that are very encouraging at the grassroots level...many of the elements for building a movement are there...one is great pain; two is a reassessment of the failure of traditional strategies; three is experimentation with new models; and four is younger people being totally turned off by the process." 

Action At Several Levels.  Of course, the realist in me understands that multi-national corporations will remain hardwired to their core function and legal obligation, the maximizing of shareholder wealth.  And they will continue to use the same tactics, ignore the same harmful externalities, cultivate the same calibre of venal politician and lobbyist that has brought us to this perilous moment in our history.  I remain convinced that, concurrent with any effort to build The New Economy, we must initiate actions that would clearly subordinate the power of the multi-national corporations and minimize the worst inclinations of the current corporate culture.

A world in which corporate power is subordinated to the public good would be an epic undertaking.  It would require, for example, nothing less than a radical change in the way corporations are chartered.  It would also require that their status as persons be revoked, removing them from any form of political activity and influence (and, as Thom Hartmann has shown, status as persons for corporations is a fabrication).  It would generate almost unfathomable legal and financial upheaval.  It would require coordination with like-minded single-issue groups, leveraging and reinforcing their collective and specialized expertise across international boundaries.  It would eliminate the financial leverage that big business now holds over policy makers.

Most will dismiss the idea as lunacy, arguing that change of this magnitude is impossible.  I would concede that, at best, such a result is unlikely.  But perhaps we wouldn't need a complete victory to achieve the necessary change -- or a decided trend to change -- though it would be helpful if we could articulate the desired outcome, the endgame (and here much remains to be done).  And I would argue that we guarantee the status quo by failing to act at all.  The potential force of populist numbers has yet to be adequately tapped and, as Alperovitz noted, tipping points are not generally well forecast.  To cite the most recent proof-point, no one could have imagined -- even as recently as this morning -- that the world's most powerful media giant, Rupert Murdock, would close his News of the World tabloid over the public outrage in Britain surrounding phone hacking charges.  

So perhaps we can imagine a multi-tiered strategy, one that addresses existing perils while also creating new models for future sustainability.  

But, as I said at the start, it is time we rouse ourselves to action.  We have not the faintest hope of success if we won't take the first step.

By David.

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Your musical accompaniment for the day: Beethoven, Symphony #3 in E Flat, Opus 55, "Eroica" - First movement, Allegro Con Brio; Paavo Jarji, Deutsche Kammerphilharmonie Bremmen. Enjoy.

(This article also posted on July 9 at OpEdNews.)   

Monday, 4 July 2011

Multi-national Corporations Personified

Terrible catastrophes loom in our future.  Water, oil, food, climate -- all are high on the list of pending and probable disasters.  Any of these could be the first to emerge to truly devastate our way of life.  And when the you-know-what does hit the fan, no matter which is first, these catastrophes may become mutually reinforcing, and we'll experience the mother of all perfect storms.

The obvious thread common to these impending calamities is that they are man-made.  In what is just a blink of an eye in evolutionary terms, in only in the last 100 years, we have participated in the accelerated destruction that brings us now to the brink.  And yet, incredibly, as we witness these growing trends, as the catastrophes loom larger, we persist in actively feeding and sustaining these calamities of our own making.  Yes, we are culpable and, yes, we have enthusiastically partaken; and well, yes, there might be some trouble ahead; but no, we really like our technology and lifestyle.  We are comfortably numb to the realities, and besides, there isn't much we can do anyway, is there?  It may be cognitive dissonance, or it may be magical thinking, but its never seemed more true that a body at rest tends to stay at rest. 

But if the public is transfixed in the headlights' glare, so too are the policy makers, who are either unable to see, or proudly proclaim their refusal to grasp, the significance of the information made available to them.  These are the smartest guys in the room (or so they keep telling us), and yet they continue to ignore or deny the evidence.  Their stubborn inaction in the face of these disasters not only represents an absolute failure of public policy and political leadership, but, given the stakes involved, may rise to the level of criminal conspiracy.  Of course, by definition a criminal conspiracy requires a co-conspirator, and driving the status quo -- pushing the narrative most aptly embodied in Alfred E Newman's  "What, Me Worry?" -- are the multi-national corporations.  

It is well known that Big Money's control of the media and messaging allows it to deny these pending calamities, even as corporations drive more profit to the bottom line and stuff more wealth into the pockets of the elite from the very activities that hasten our demise.  Their control of the message is so well and widely documented that further proof just seems redundant -- still, it is gratifying that evidence of it so regularly bubbles to the surface.  

In fact, just last week we learned that a leading denier of climate change has taken $1 million from the oil and coal industries over the last decade; among his many services on behalf of the skeptic crowd, Dr. Willie Soon of the Harvard-Smithsonian Centre for Astrophysics has sought to weaken a major assessment of global warming by the UN's leading climate science body.  And according to the Guardian, documents obtained by Greenpeace under FoIA show that "the Charles G Koch Foundation, a leading provider of funds for climate sceptic groups, gave Soon two grants totalling $175,000 in 2005/6, and again in 2010.  In addition the American Petroleum Institute (API), which represents the US petroleum and natural gas industries, gave him multiple grants between 2001 and 2007 totalling $274,000, oil company Exxon Mobil provided $335,000 between 2005 and 2010, and Soon received other grants from coal and oil industry sources including the Mobil Foundation, the Texaco Foundation and the Electric Power Research Institute."  In his comment on these revelations, Kert Davies, a research director at Greenpeace, is reported to have said: "A campaign of climate change denial has been waged for over 20 years by big oil and big coal.  Scientists like Dr. Soon, who take fossil fuel money and pretend to be independent scientists, are pawns."  

And so, because it owns the policy and political agenda, Big Money denies our pending calamities through the shills (scientists and politicians, alike) it employs.  This is true for water, oil and food as it is for climate change -- as it is for virtually any other you might wish to name.  The case of the good Dr. Soon shows again that pay-for-play expertise is readily abundant and will be, sadly, readily sought and employed.  These revelations are only mildly discomforting for the multi-nationals (maybe), the disclosures unlikely to alter their behavior, because the cost-benefit is so wildly positive!  Corporations have become spectacularly successful in their relentless pursuit of shareholder wealth -- in part -- through their dedicated strategy of co-opting our public officials and experts.  

As a result of their success, multi-national corporations are now the world's most dominant economic and political force, and they have become perhaps the greatest threat to mankind in its history.  Because they are at the centre of the worst trends and pending catastrophes, and because they actively and aggressively hold the status quo even as they deny them, multi-national corporations are driving a headlong rush to our ultimate demise.  And even as they do, multi-national corporations -- personified as they are by our elected officials and the other smart people in the room -- gaze back at us with that goofy expression as if to say "What, Me Worry?"           

Well yes, we need to worry, but we need to do much more.  Faced with imminent mortal danger in your own home, would you just settle in to watch Breaking Bad, or would you rouse yourself to make at least a token effort to save your family?  Well dear reader, our global house is on fire, and we are faced with the same collective imperative to act.  Because, if we don't, our failure will not only implicate us in this ongoing criminal conspiracy, but will certainly rise to the level of crimes against humanity.

And then we will become the real personification of the multi-national corporations.

By David.

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Your musical accompaniment for the day: "Telegraph Road" from Love Over Gold, Dire Straits.

(This article first posted on July 1 at OpEdNews.)