Arianna Huffington on Corporations
2004 former Independent Challenger for CA Governor
These are massive numbers. But when you remember that we spent $182 billion to bail out AIG ($12.9 billion of which went straight to Goldman Sachs), you realize that this amount alone would be more than enough to close the 2010 budget gap in every state of the Union. Toss in the $45 billion we gave to Bank of America and the $45 billion we gave to Citigroup, and we would be well on the way to ensuring that no state's vital services are cut through 2011.
But instead that money has gone to the banks without any fundamental reform to the system, without any strings attached or edicts about how much they have to lend to help the real economy recover--or, indeed, without even having to tell us what they did with our money.
The trend is even starker when you look at the financial sector's share of U.S. business profits. Between 1973 an 1985, the financial industry's share of domestic corporate profits topped out at 16%. In the 1990s, it spanned between 21% and 30%. Just before the financial crisis hit, it stood at 41%.
The expansion of the financial industry has come at a significant cost to the rest of us. And those who have paid the highest price are the members--and former members--of America's middle class.
It's no wonder that Wall Street breathed a deep sigh of relief when the Senate passed the Restoring American Financial Stability Act in May 2010. It was considered mission accomplished for financial reform. Unfortunately, it didn't do enough to rein in Wall Street. It didn't end too-big-to-fail banks, and it kept taxpayers on the hook for future bailouts.
In the three decades since the Reagan Revolution, Americans have been [told that] unregulated markets are the true path to a higher standard of living. Along the way, the social contract--especially the subsections protecting workers, poor people, and our air, water, and oceans--was fed into a shredder. Starting with the New Deal, we began constructing a social safety net to help the most vulnerable among us. But who needed a safety net when the laws of supply and demand were there to protect us, when the trickle-down theory would provide sustenance for us all?
The missing tenet in this new free-market fundamentalism was the recognition, central to capitalism, that businessmen have responsibilities above and beyond the bottom line.
In 2004 US multinational corporations paid roughly $16 billion in taxes on $700 billion in foreign active earnings--putting their tax rate at around 2.3%. Know many middle-class Americans getting off that easy at tax time?
In Dec. 2008, 83 of the 100 largest publicly traded companies in the country had subsidiaries in tax havens. Washington has been trying to address the issue for close to fifty years--JFK gave it a go in 1961. But time and again corporate lobbyists have managed to keep the loopholes open.
Enter the bankruptcy bill that banking lobbyists pushed through Congress in 2005. Instead of cracking down on predatory lending practices, closing loopholes that favor the wealthy, and strengthening the safety net for working people, single mothers, and elderly Americans struggling to recover from financial setback, the Senate put together a nasty little bill that:
As Chinese products have flooded the market and NAFTA-juiced trade has increased imports to record levels, the Consumer Product Safety Commission has had a number of conspicuous failures. The best known of them was the unprecedented double recall of both a lead-tainted Thomas the Tank Engine toy and the toy sent to consumers to replace it. The Product Safety Commission has dropped prevention of child-drowning from its list of strategic goals. Its overworked inspectors didn't catch an obvious defect in the Simplicity Crib that killed nine-month-old Liam Johns. None of this is any surprise, since reducing its staff from a high of 978 in 1980 to less than half that today.
The bracing truth is that we now have a regulatory system in which corporate greed, political timidity, and a culture of cronyism are the order of the day.
The mad stampede of greed that coincided with the waning of the bull market and the bursting of the loony tunes tech balloon would not have been possible without an unholy alliance between the CEO class and their buddies on Capitol Hill. For a small fee, payable at the beginning of each election cycle--some call such fees "political donations"; others, less concerned with semantics, political correctness, and charges of slander, call them "legal bribes"--corporate mandarins can purchase an all-access pass guaranteeing a sympathetic look the other way from our so-called public servants. Sure, for a few weeks last summer, when the WorldCom bomb made them fear for their political lives, our political leaders actually passed a set of reforms. But don't be fooled. Both political parties have a richly vested interest in corporate corruption.
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Opinion Leaders on the Right:
Milton Friedman (Nobel Economist)
Rush Limbaugh (Radio Talk Show Host)
Ayn Rand (Author and Philosopher)
Heritage Foundation (Think Tank)
Joe Scarborough (Former Congressman; Radio Host)
Opinion Leaders on the Left:
American Civil Liberties Union
Noam Chomsky (Author and Philosopher)
Arianna Huffington (Internet Columnist)
Robert Reich (Professor and Columnist)