HOSTILE TAKEOVER - THE CORPORATE CONTROL OF SOCIETY
AND HUMAN LIFE - by Stephen Lendman

Large transnational corporations are clearly the
dominant institution of our time.  They’re preeminent
throughout the world but especially in the Global
North and its epicenter in the US.  They control or
greatly influence what we eat and drink, where we
live, what we wear, how we get most of our essential
services like health care and even what we’re taught
in schools up to the highest levels.  They create and
control our sources of information and greatly
influence how we think and our view of the world and
them.  They even now own patents on our genetic code,
the most basic elements of human life, and are likely
planning to manipulate and control them as just
another commodity to exploit for profit in their brave
new world that should concern everyone. They also
carefully craft their image and use catchy slogans to
convince us of their benefit to society and the world,
like: “better things for better living through
chemistry” (if you don’t mind toxic air, water and
soil), “we bring good things to life” (for them, not
us), and “all the news that’s fit to print” (only if
you love state and corporate friendly disinformation
and propaganda).  The slogans are clever, but the
truth is ugly.

Corporations also decide who will govern and how.  We
may think we do, but it’s not so and never was.  Those
national elections, especially the last two, only
looked legitimate to most people, but not to those who
know and understand how the system works.  Here’s how
it really works.  The “power elite” or privileged
class C. Wright Mills wrote about 50 years ago in his
classic book by that title are the real king and
decision makers.  He wrote how corporate, government
and military elites formed a trinity of power after WW
II and that the “power elite” were those “who decide
whatever is decided” of importance.  The holy trinity
Mills wrote about still exists but today in the shape
of a triangle with the transnational giants clearly on
top and government, the military and all other
institutions of importance there to serve their
interests. These corporations have become so large and
dominant they run our lives and the world, and in a
zero sum world and the chips that count most in their
stack, they do it for their continuing gain and at our
increasing expense.  Something is way out of whack,
and in this essay I’ll try to explain what it is and
why we better understand it.

The Power of Transnational Corporations and the Harm
They Cause

As corporations have grown in size they’ve gained in
power and influence.  And so has the harm they cause -
to communities, nations, the great majority of the
public and the planet.  Today corporate giants decide
who governs and how, who serves on our courts, what
laws are enacted and even whether and when wars are
fought, against whom and for what purpose or gain.
It’s for their gain, who else’s, certainly not ours.
Once we start one, they can even make profit
projections from it like on any other business
venture.  For them, that’s all it is - another way to
make a buck, lots of them.

The central thesis of this essay is that giant
transnational corporations today have become so
dominant they now control our lives and the world, and
they exploit both fully and ruthlessly.  While they
claim to be serving us and bringing us the fruits of
the so-called “free market,” in fact, they just use us
for their gain.  They’ve deceived us and highjacked
the government to serve them as subservient proxies in
their unending pursuit to dominate the world’s
markets, resources,  cheap labor abroad and our own
right here.  And they’ve done it much like what
happens in the marketplace when a predator company
attempts to take control of another one that prefers
to remain independent.  They launch a hostile
takeover, going around or over the heads of the
target’s management, their employees and the
communities they operate in.  They go right to the
target’s shareholders and promise them a better deal,
meaning a premium price on the stock they hold. 

They do this, as in a friendly merger, for a variety
of financial and strategic reasons, but essentially
it’s to achieve any possible immediate gain as well as
over the longer term greater market dominance that
will build future profits. But what happens in the
wake of a takeover.  Assets get stripped, spun-off
and/or sold-off.  Plants are closed.  Jobs are lost.
And all this is done for the primary bottom line goal
- “the bottom line,” higher profits, whatever the cost
to people, communities or society.

Think of it this way.  Large corporations today
everywhere, but especially the largest ones in the
Global North, are a destructive force, hostile to
people, societies and the environment.  They’re
nothing less than legal private tyrannies operating
freely with virtually no restraint.  Everything for
them, animal, vegetable or mineral, is viewed as a
production input to be commodified and consumed for
profit and then discarded when no longer of use.  And
to achieve maximum profits, costs must be rigidly
controlled.  That means the lowest prices paid for
goods and services, the lowest wages paid to workers
(below privileged higher management who reward
themselves richly), as little as possible spent on
essential benefits like health care and pensions, and
increasingly little or no concern about the long-term
cost of exploiting, plundering or even destroying the
natural environment and the future ability of the
planet to sustain life.  These issues, however
recognized and grave, are for someone else to deal
with later.

For now all that matters is today, the next quarter’s
earnings and keeping the stockholders and Wall Street
happy. They only understand numbers on financial
statements and are blind, unconcerned and even hostile
to human and societal welfare or a safe environment
that will protect and sustain all life forms.  They
call it “free market capitalism.”  It’s really the law
of the jungle.  They’re the predators, we’re the prey,
and every day they eat us alive.

Does all this make sense?  And do corporate chieftains
who live in a community, love their wives and
children, contribute to charities, attend church and
believe in its teachings really go to work every day
and think - “who and what can I exploit today?” They
sure do because they have no other choice.  No more so
than breathing in and breathing out.

How the Law Affects Corporate Behavior

Publicly owned corporations are mandated by law to
serve only the interests of their shareholders and do
it by working to maximize the value of their equity
holdings by increasing profits.  That’s it.  Case
closed.  Think of these businesses as gated
communities of owners (large and small), the welfare
of whom is all that matters and the world outside the
gates is to be used and exploited for that one purpose
only.  Forget about any social responsibility or
safeguarding the environment.  The idea is to grow
sales, keep costs low, increase profits, and if you do
it well, shareholder value will rise, the owners and
Wall Street will be happy, and you as a CEO or senior
executive will probably get a raise, good bonus and
keep your job.  Try being worker-friendly, a nice guy,
a good citizen or a friend of the earth and fail to
achieve the above objectives and you’ll likely face
dismissal and even possible shareholder lawsuit for
not pursuing your fiduciary responsibility.  Anyone
choosing this line of work has no other choice.  To do
the job well, you have to think only of the care and
feeding of your shareholders and the investment
community, ignore the law if that’s what it takes to
do it, and obey the only law that counts - the one
that helps you grow the “bottom line.”

There’s nothing in the Constitution, which is public
law, that gives corporations the rights they’ve
gotten.  It never mattered to them.  They just crafted
their own private law, piece by piece, over many years
with the help of corporate-friendly lawyers,
legislators and the courts.  And today it’s easier
than ever with both major parties strongly
pro-business and the courts stacked with
business-friendly judges ready to do their bidding. 
The result is big business is now the paymaster, or
puppetmaster, with government and the halls of justice
their faithful servants.  There’s no government of,
for and by the people, no public sovereignty, no
democratic rights or any choices but to accept their
authority and bow to their will.  It’s a democracy for
the few alone - the privileged elite.  Our only choice
is to go along to get along or get out of their way.

A Profile of the World’s Largest 200 Transnational
Corporations

In December, 2000 The Institute for Policy Studies
released a report called “The Rise of Corporate Global
Power.”  It was a profile of the 200 largest
transnationals that showed just how dominant they are.
A summary of their findings is listed below.

1.  Of the world’s 100 largest economies, 51 are
corporations.

2. The combined sales of these 200 corporations
(called “The Group” below) in 1999 equalled 27.5% of
world Gross Domestic Product (GDP) and are growing
faster than overall global economic activity.

3. The Group’s combined sales exceed the total
combined economies of all nations in the world except
the largest 10.

4. The Group’s combined sales are 18 times the income
of the bottom one fourth of the world’s population
(1.2 billion people) living in “severe” poverty.

5. Despite their combined size and percentage of world
economic activity, The Group employs only 0.78% of the
world’s workforce.

6. From 1983 to 1999 The Group’s workforce grew only
14.4% while their profits increased by 362.4% or about
25 times as much.

7. The largest employer in the world, Walmart,
employed 1,140,000 in 1999 (1.6 million in 2005) or 5%
of The Group’s total employment.  It’s also a model
(and increasingly a target) for corporate
union-busting, widespread use of part-time workers and
a practice of avoiding giving its workers needed
benefits like health insurance.

8. 82 US corporations are in The Group, twice as many
as Japan with 41, the next highest contributing
country.

9. 44 of the US corporations in The Group didn’t pay
the full 35% federal tax rate from 1996 - 1998.  7 of
them paid no tax in 1998 and also got tax rebates,
including Enron and Worldcom now exposed as corporate
criminals.

10. The percent of The Group’s sales from the service
sector (not manufacturing) grew from 33.8% in 1983 to
46.7% in 1999.  In the US, the service sector
comprised 79% of the total economy in 2004.

How Corporate Behavior Affects the Public Interest

Big corporations have almost always thrived in the US.
But a crucial, defining moment happened in 1886 when
the Supreme Court granted corporations the legal
status of personhood in Santa Clara County v. Southern
Pacific Railway - a simple tax dispute case unrelated
to the issue of corporate personhood.  Incredibly it
wasn’t the Justices who decided corporations are
persons, but the Court’s reporter (J.C. Bancroft
Davis) who after the decision was rendered wrote it in
his “headnotes.”  The Court did nothing to refute
them, likely by intent, and the result was
corporations got what they had long coveted.

That decision granted corporations the same
constitutional rights as people, but because of their
limited liability status, protected shareholders from
the obligations of their debts, other obligations, and
many of the responsibilities individuals legally have.
Armed with this new legal status corporations were
able to win many additional favorable court decisions
up to the present.  They also gained much regulatory
relief and favorable legislation while, at the same
time, being protected by their limited liability
status.  As a result, corporations have been able to
increase their power and grow to their present size
and dominance.

Although corporations aren’t human, they can live
forever, change their identity, reside in many places
simultaneously in many countries, can’t be imprisoned
for wrongdoing and can change themselves into new
persons at will for any reason.  They have the same
rights and protections as people under the Bill of
Rights but not the responsibilities.  From that right,
corporations became unbound, free to grow and gain
immense power and be able to become the dominant
institution that now runs the country, the world and
all our lives.  Most important, they got an unwritten
license from all three branches of the government to
operate freely for their own benefit and others of
their privileged class and do it at the public expense
everywhere.  They’ve exploited it fully as they’re
grown in size and dominance, and the result has been
lives destroyed, the environment harmed and needless
wars fought on their behalf because they open markets
and grow profits.  It’s no exaggeration to say these
institutions today are real “weapons of mass
destruction.” 

In the early days of the republic it all might have
been different had Thomas Jefferson and James Madison
prevailed over Federalists John Adams and Alexander
Hamilton.  Jefferson and Madison believed the Bill of
Rights should include “freedom from monopolies in
commerce” (what are now giant corporations) and
“freedom from a permanent military” or standing
armies.  Adams and Hamilton felt otherwise, and the
final compromise was the first 10 Bill of Rights
amendments that are now the law but not the other two
Jefferson and Madison wanted included.  Try to imagine
what this country might be like today had we gotten
them all.

We didn’t, of course, so the result, as they say, is
history.  It allowed small corporations to grow into
giants and so-called “free market capitalism” to
become the dominant state religion of this country and
the West.  We may say it’s free, but it only is for
those own and control it, and notice we never hear the
system called “fair.”  That’s because in most key
industries a handful of corporate giants dominate and
now work in cartel-like alliance with their “friendly”
competitors here and abroad to control (read: exploit)
the markets they serve.  They’re also able to co-opt
the leaders and business elites of countries in the
developing world, or work in partnership with them in
the larger ones like China, India and Brazil, to allow
them market entry.  As an inducement, they offer to
invest their capital and offer their technology in
return for a business-friendly climate and access to
the host country’s cheap labor.  It’s an alliance
based on pure exploitation for profit at the expense
of people who are used, abused and discarded when they
have no further value.

This essay is mainly about how these same corporate
giants dominate and exploit here in the US.  They
can’t get away with the flagrant abuses commonplace in
sweatshop labor countries, but they’re moving in that
direction.  It’s no longer like the past in this
country when I was young and beginning my working life
(a distant memory of better times) when manufacturing
was strong, jobs paid well and had good benefits, and
workers were protected by strong unions that served
their interests even while partnering with management
and willing to do the bidding of government. 

I still remember well an incident early in my working
life when as a newly minted MBA I worked as a
marketing research analyst for several large
corporations prior to joining a small family business.
At one of those companies in the early 60s, my boss
called me into his office on my first day on the job.
He jokingly told me he was so happy with my work he
was giving me a raise.  We both chuckled, and he then
explained on that day everyone in the company got an
inflation-based increase.  It was automatic from the
lowliest worker to top management because the unions
(then strong) got it written into their labor
contract.  In that company, everyone got the same
benefits as union members.  Try finding anything like
that today even for union members alone.  It’s almost
unheard of.

Today, the country is primarily dominated by service
industries many of which require little formal
education, only pay low wages and few if any benefits,
and offer few chances for advancement.  The US
Department of Labor projects that job categories with
the greatest expected future growth are cashiers,
waiters and waitresses, janitors and retail clerks.
These and other low wage, low benefit jobs are what
many young people entering the workforce can look
forward to today.  You don’t need a Harvard degree for
them or even one from a junior college - and for the
ones listed above, no degree is needed, not even a
high school one. 

The continuing decline of good job opportunities is a
key reason why the quality of education in urban
schools has deteriorated so much in recent years and
school dropout rates are so high.  In my city of
Chicago, half of all students entering high school
never graduate and of those who do 74% of them must
take remedial English and 94% remedial math at the
Chicago City Colleges according to a report published
in the Chicago Sun Times.  The situation isn’t much
better in inner cities throughout the country, nor is
the level of racial segregation that’s grown to levels
last seen in the 1960s according to Jonathan Kozol in
his new book The Shame of the Nation.  Again in
Chicago, a shocking 87% of public school enrollment
was black or Hispanic, and the situation is about as
bad or even worse in most other big cities. 

The lack of good job opportunities for a growing
population of ill-prepared young people is also a
major reason for the growth of our prison population
that now exceeds 2.1 million, is the largest in the
world even ahead of China with over four times our
population, and is incarcerating about 900 new
prisoners every week.  I wrote a recent heavily
documented article about this called The US Gulag
Prison System.

The US Has Always Been the Unthinkable and
Unmentionable - A Rigid Class Society

The US has always been what the “power elite” never
admit or discuss - a rigid class society.  But once
there was a thriving middle class along with a small
minority of rich and well-off and a large segment of
low paid workers and the poor.  That majority in the
middle could afford their own homes, send their kids
to college and afford many amenities like new cars,
some travel,  convenience appliances and decent health
care.  I can still remember buying a health insurance
plan while finishing my graduate work in 1959 that
cost about $100 and change total for respectable
coverage for a full year.  Honest, I’m not kidding.

Fewer people each year can afford these “luxuries”
now, including decent health care coverage, because of
the hollowing out of the economy, stagnant wage growth
(to be discussed below) and skyrocketing costs of
essentials like health insurance, prescription drugs
and college tuition for those wanting a higher
education.  Services now account for nearly 80% of all
business while manufacturing has declined to about
14%, and total manufacturing employment is half the
percentage of total employment it was 40 years ago and
falling.  Also, financial services of all types now
comprise the largest single sector of the economy at
21% of it.  But most of it involves investment and
speculation running into the hundreds of trillions of
dollars annually worldwide (and the US is the
epicenter of it all) just for transactions involving
currencies and so-called over-the-counter and
exchange-traded financial derivatives.  It’s not the
purpose of this essay to explain the nuts and bolts of
this kind of trading except to say they produce
nothing anyone can go in a store and buy or that
enhance the well-being of the majority public that
doesn’t even know, let alone understand, that this
kind of activity goes on or what the inherent dangers
from it may be.

The dismantling of our manufacturing base, however, is
a subject that should make daily headlines but is
seldom discussed in the mainstream.  It’s crucially
important because one has to wonder how any nation can
avoid eventual decline when it allows its
manufacturing to be done abroad, reduces its need for
a highly trained work force and ends up destroying its
middle class that made it prosper in the first place.
There are distinguished thinkers who believe as I do
that the US has seen its better days and is now in a
downward trajectory economically.  Unless a way is
found to reverse this destructive trend, the US will
be Number One only in military spending and waging
wars.  And no nation in history based on militarism
and conquest has ever not failed ultimately to destroy
itself.

I’d like to quote two distinguished thinkers who’ve
addressed the issue of growing inequality in the US.
On most social matters they’d likely disagree, but not
on this one.  One was former liberal Supreme Court
Justice Louis D. Brandeis who explained: “We can have
democracy in this country, or we can have great wealth
concentrated in the hands of the few, but we can’t
have both.”  The other was distinguished “free market”
economist and Nobel laureate Milton Friedman.  In his
view: “The greatest problem facing our country is the
breaking down into two classes, those who have and
those who have not.  The growing differences between
the incomes of the skilled and the less skilled, the
educated and the uneducated, pose a very real danger.
If that widening rift continues, we’re going to be in
terrible trouble…..We cannot remain a democratic,
open society that is divided into two classes.”

The Downward Trajectory of American Workers

Over the past generation working people have seen an
unprecedented fall in their standard of living.  In
the past (except for periods of economic downturn),
workers saw their wages and benefits grow each year
and their living standards improve. Today it’s just
the opposite.  Adjusted for inflation, the average
working person in the US earns less than 30 years ago,
and even with modest annual increases is not keeping
up with inflation.  In addition, the federal minimum
wage is a paltry $5.15 an hour and was last increased
in 1997.  That rate is now at the lowest point it’s
been relative to average wages since 1949.  It’s
incentivized individual states to raise their own
which they have the right to do, and, as of mid-year
2005, 17 of them and the District of Columbia have
done it covering nearly half the US population.  That
helps, but not enough.

Some of the world data is especially shocking,
appalling and indicative of the economic trend in the
US.  According to the UN 2002 Human Development
Report, the richest 1% in 1999-2000 received as much
income as the bottom 57% combined, over 45% of the
world’s population lived then on less than $2 a day,
about 40% had no sanitation services and about 840
million people were malnourished.  In addition, 1 in 6
grade school children were not in school, and half the
global nonagricultural labor force was either
unemployed or underemployed.  Most shocking and
disturbing of all is that many millions (likely tens
of millions) of people in the less developed world die
each year from starvation and treatable diseases
because of abuse and/or neglect by rich nations that
could prevent it.  And these numbers reflect the state
of things at the end of a decade of overall impressive
economic growth.  But it shows how those gains went
mainly to a privileged upper class who got them at the
expense of the majority below them, especially the
most desperate and needy.

The same trend is evident in the US although not as
stark as in the less developed world.  Except for the
mild recession in 2001-2002, overall US economic
growth for the past 15 years has been strong and
worker productivity high.  But the gains from it went
to the privileged at the top and were gotten at the
expense of working people who saw their wages fail to
keep up with inflation and their essential benefits
decline.  In 2004 the average CEO earned 431 times the
income of the average working person. That was up from
85 times in 1990 and 42 times in 1980.  It’s hard to
believe and even harder with the real life example
below. 

I’d like to nominate a “poster executive” who for me
symbolizes classic gross corporate excess and greed.
He’s the chairman and CEO of Capital One Financial,
the giant credit card company that’s awaiting the
finalizing of its acquisition of North Fork Bancorp.
At completion of this deal, the Wall Street Journal
reported on March 24 this lucky fellow will realize a
gain of $249.3 million from stock options he exercised
last year.  That’s in addition to the $56 million he
earned in 2004.  What on earth will he spend it on,
and how many less fortunate ones will have to ante up
to pay for this in the de rigueur job cuts that always
follow big acquisitions.

And what will all those other lucky CEOs and top
executives spend theirs on as well.  If you’re not
already gagging, let me make you choke.  According to
a study just released by two Ivy League academics
based on interviews with CEOs and top managers of the
largest 1,500 public US companies, the top five
executives collectively at those companies pocketed
$122 billion in compensation from 1999-2003 plus at
least $60 billion more in supplemental benefits from
SERPs (Supplemental Executive Retirement Plans).
Also, other data show average annual CEO pay rose from
about $1 million a year in 1980 to an estimated $14.4
million in 2001 and rising - plus all those juicy
benefits.  I repeat - what on earth can they spend it
on.  They could never even count it.

Reasons for This Unabated Downward Trajectory

The reasons for this decline were as follows:

The shift away from manufacturing to services.

The growth of so-called “globalization” sending many
jobs abroad including high-paying ones.

The decline of unions to levels last seen before the
mass unionization struggles of the 1930s because of
government and corporate antipathy toward them and
corporations using the threat to close plants and move
jobs offshore to force workers to take pay cuts and
accept lower benefits.  And then they still move jobs
abroad.

Deregulation of key industries including
transportation, communications and finance, which
opened these industries to low cost competition that
put pressure on unions and forced workers to accept
lower pay and benefits to keep their jobs.

The growth of high technology allowing machines
(mainly computers) to do the work of people, thus
reducing the need for them.

The effects of racism and sexism (in a society with
deep-rooted racism, sexism and classism) as seen in
the data showing 30% of black workers and 40% of
Latino workers earning poverty wages with women in
both categories most affected.  And the average black
family owns only 14% as much as the average white
family. 

The unabated downward trajectory of workers’ real
income already discussed. The only family income gains
have come from two income households, in many cases
because wives were forced to enter the workforce out
of necessity.

Statistics Documenting the Decline

Hot off the press from the latest US Federal Reserve
triennial survey (and most comprehensive one of all)
of household wealth published in late February, 2006:

—Median American family income grew a paltry 1.5%
after inflation between 2001 and 2004, but there was a
widening gap between upper and lower income
households.

—While the richest 10% rose an inflation adjusted
6.5%, the bottom 25% fell 1.5%.

—Stephen Brobeck, Executive Director of the Consumer
Federation of America, explained - “While the typical
American household basically ran in place, less
affluent households actually lost ground.”

Even hotter off the press, the US Department of Labor
and Congressional Budget Office reported in late March
that in the last 5 years ending year-end 2005,
inflation adjusted GDP per person rose 8.4% but the
average weekly wage fell 0.3%.  Following a long-term
trend since the 1970s, those in the upper income
percentiles gained the most while those in the lower
half of them lost the most.  And the income gap
between rich and poor continued to widen.

—The racial disparity was especially dramatic.  The
median white family’s net worth in 2004 was $140,700
compared with $24,800 for the typical nonwhite family.

According to the 2005 Federal Poverty Guidelines,
12.7%, or 37 million people, lived in poverty in 2004.
However, because of an acknowledged flawed model to
measure poverty, the true number is far higher - at
least many millions more and increasing even in times
of prosperity.

In December, 2004 the New York Times reported the US
ranked 49th in world literacy, and the US Department
of Labor estimates over 20% of the population is
functionally illiterate (compared to about 1% in
Venezuela and Cuba, two of the countries we demonize
the most).  It’s also true, as discussed above
briefly, that the quality of public education has been
in decline in urban schools for many years.  In
addition (also mentioned), the extent of racial
segregation is now as great as in the 1960s, despite
supposed but unrealized gains from the civil rights
legislation of that time.  Further, state and local
education budgets aren’t keeping up with a growing
need or are being cut.  It’s also no better for those
needing college aid as federal Pell grants have been
frozen or cut for three straight years, and it was
just reported in late March by public college finance
officials that state higher education funding has
fallen sharply from $7,121 per student in 2001 to
$5,833 in 2005.  It means a growing number of lower
income students are now deprived of a chance for
higher education - and it’s getting steadily worse.

The World Health Organization ranked the US 37th in
the world in “overall health performance” and 54th in
the fairness of health care.  And in 2004 about 46
million people had no health insurance and millions
more were underinsured.  These appalling numbers are
in spite of the fact that the US spends far more on
health care per capita than any other country.  And
all developed countries in the world, except the US
and South Africa, provide free health care for all its
citizens paid for through taxes.

The European Dream reported US childhood poverty
ranked 22nd or second to last among developed nations.

The US ranked last among the world’s 20 most developed
nations in its worker compensation growth rate in the
1980s with conditions only slightly better in the
1990s. 

The New York Times reported 12 million American
families, over 10% of all households, struggle to feed
themselves.

The NYT also reported the US ranks 41st in world
infant mortality. 

All this and many more depressing statistics are
happening in the richest country in the world with a
2005 Gross Domestic Product of $12.5 trillion.

The dramatic effects of social inequality in the US
are seen in the Economic Policy Institute’s 2004
report on the State of Working America.”  It shows the
top 1% controls more than one-third of the nation’s
wealth while the bottom 80% have 16%.  Even worse, the
top 20% holds 84% of all wealth while the poorest 20%
are in debt and owe more than they own. 

Corporate Gain Has Come at the Cost of Worker Loss

Not coincidentally, as workers have seen their living
standards decline, transnational corporations have
experienced unprecedented growth and dominance.  And
that trend continues unabated.  How and why is this
happening?  Begin with the most business-friendly
governments the country has had over the last 25 years
since the “roaring” 1920s when President Calvin
Coolidge explained that “the business of America is
business.”  He, and two other Republican presidents
then did everything they could to help their business
friends.  But they were small-timers compared to
today, and the size, dominance and global reach of big
business then was a small fraction of what it is now.
And back then, job “outsourcing”, GATT and WTO type
trade agreements, and the concept of globalization
weren’t in the vocabulary.  Now they’re central to the
problem as they’ve put working people in corporate
straightjackets and created a severe class divide in
the country (not to mention the developing world where
it’s far worse) that keeps widening.

How World Trade Agreements Destroy Good Jobs and the
American Dream

World trade between nations is nothing new, and the
General Agreement on Tariffs and Trade (GATT) has been
around since it was formed in Havana, Cuba in 1948.
But with the signing of NAFTA that went into effect on
January 1, 1994, the notion of so-called globalization
emerged big time.  NAFTA brought Mexico into the 1989
Canada-US Free Trade Agreement as part of a radical
experiment to merge three disparate economies into a
binding one-size-fits-all set of rules all three had
to abide by regardless of the effect on their people.
To sell it to each country’s legislators and people,
NAFTA’s backers made lofty pie-in-the-sky predictions
of new jobs that “free trade” would create.  They
never were nor was this a plan to do it.  It was a
scam to outsource jobs and thus eliminate many others,
enrich the transnationals and make working people pick
up the tab and take the pain.

NAFTA was just the beginning.  It was planned as a
stalking horse and template for the World Trade
Organization (WTO), that replaced the GATT one year
after NAFTA went into effect.  The WTO along with an
alphabet soup of trade agreements (passed and wished
for) like GATS (covering all kinds of services), TRIPS
(for intellectual property), MAI (on investments and
most all-encompassisng and dangerous one of all if it
ever passes even in separate pieces) and all the
regional agreements like CAFTA and FTAA are intended
to establish a supranational economic “constitution.”
It’s to be based on the rules of trade the Global
North nations want to craft that would override the
sovereignty of all WTO member nations.  In other
words, the plan was and still is for the US primarily,
along with the EU, Japan and other dominant Global
North countries to establish a binding set of trade
rules (a global constitution) they would write for
their benefit for an integrated world economy and then
force all other nations to abide by them.  NAFTA, and
what was to follow, were and are not intended to
create jobs and raise living standards in the
participating countries, despite all the hype saying
they would and will. These agreements are solely plans
to benefit big corporations, legally allowing them the
right to dominate world markets, override national
sovereignty to do it, and exploit people everywhere
for their gain.  Bottom line - these “agreements” mean
big corporations win and people everywhere lose.

So far the jury is very much out on whether the grand
plan will succeed as key countries in the Global South
have caught on to the scam and aren’t buying it -
Brazil, India, Venezuela, Argentina, Bolivia and
others.  And China is big enough to be a club member,
agree to the rules, and then bend them at times to
protect its own interests.

But if NAFTA was a template to disguise a WTO
attempted world “hostile takeover,” look at all the
carnage it’s created so far.  Instead of creating jobs
in all three countries, it destroyed hundreds of
thousands of them.  In the US alone it’s responsible
for the loss each year of many thousands of high
paying, good benefit manufacturing jobs now exported
to low wage countries like Mexico, China, India and
many others.  And most of the workers losing them only
are able to find lower paying ones with fewer or no
benefits if they can find any job at all.  This is an
ongoing problem in good as well as poor economic times
and gets worse every year.  It’s also led many older
workers, who wish to work but can’t find jobs, to drop
out of the work force or take lower paying part-time
ones when they can find full-time ones. 

The result has been a huge shift upward in income,
wealth and power in the US (and in Canada, Mexico and
all other WTO member countries) benefitting the
business elites and corrupted politicians.  And it’s
cost working people billions of dollars, many
thousands of good jobs and a permanent drop in the
average American worker’s standard of living.  It’s
also created an enormous migration problem all over
the world comprised of desperate people looking for
work because there’s none at home.  I wrote at length
about this in the US in my recent article called The
War on Immigrants.  The problem gets worse every year
including in the US.  And here a low unemployment rate
hides the fact that many workers have dropped out of
the work force or must take whatever part-time jobs
they can find because they can’t get full-time ones as
mentioned above. 

I’m now working on a new article in which I discuss
the view of some US economists who explain that if the
unemployment rate today was calculated the same way it
was during The Great Depression when it rose to a peak
of 25% of the working population, the true current
figure would be about 12% instead of the reported
4.7%. The current calculation method includes
part-time workers who work as little as one hour
during the reporting period.  It also excludes
discouraged workers who wish to work but who’ve
stopped looking because they can’t find jobs.

One might logically wonder why big US corporations run
by smart people wouldn’t be trying to ameliorate this
problem to build rather than weaken the purchasing
power of people in their home country - the ones they
need to buy their products and services.  It’s not
just for their obvious need to control or reduce costs
to enhance profits.  It’s because these companies are
only nominally US ones.  They may be headquartered
here, but they could as easily be home based anywhere.
The US may be their biggest market and most important
source of revenue and profit, but their operations and
markets span the globe.  If they desired, they could
pick up and leave and set up shop in Timbuktu or
Kathmandu.  That’s why they’re called
“transnationals.”

Once Our Government Protected Working People

At one time US governments had a social contract with
its citizens, imperfect as it was.  Most governments
in Western Europe still do, although they’re being
weakened.  But since the 1980s and especially after
the election of George W. Bush, that contract here is
being dissmantled, program by program, year after year
with the ultimate goal of making every one
self-sufficient with little or no safety net for
protection. The most vulnerable poor are hurt most and
their numbers grow each year, but the middle class is
suffering too as those in it are declining as a
percent of the total population.  And the very
definition of a middle class is changing as the wealth
gap keeps widening between top and bottom along with
the hollowing out of the middle. 

Bush and his cabal of acolytes are so intent on
destroying the US social contract with its citizens
that their motto might as well be:  you can have
anything you want - as long as you can afford to pay
for it.  If not, you’re on your own.

The Balance Sheet Documenting Corporate Gains

Worker loss has been corporations’ gain - big time.
In 2004 the world’s largest 500 corporations posted
their highest ever revenues and profits - an
astonishing $14.9 trillion in revenue and $731.2
billion in profits.  And top corporate officials,
mainly in the US, are raking it in, rewarding
themselves with obscene amounts of salaries, bonuses
in the multi-millions and lucrative stock options
worth even more for many of them.  That level of
largesse is only possible at the expense of working
people here and everywhere.  Oliver Stone may have
been thinking of them when he made his 1980s film,
Wall Street.  In it was the memorable line spoken by
the character portraying the manipulative
investor/deal-maker when he explained that “greed is
good.” 

Except for two brief and mild recessions, corporations
in the US have prospered since the 1980s in a very
business-friendly environment under both Democrats and
Republicans.  The result has been rising profits to
record levels, enhanced even more by generous
corporate tax cuts (and personal ones as well mostly
for the rich), especially after the election of George
Bush.  Under this president, one of their own in the
White House, US corporations have never had it better.
It’s been so good that 82 of the largest 275
companies paid no federal income tax in at least one
year from 2001-2003 or got a refund;  28 of them got
tax rebates in all 3 of those years even though their
combined profits totaled $44.9 billion;  46 of them,
earning $42.6 billion in profits, paid no tax in 2003
and got $4.9 billion back in tax rebates.  And the
average CEO pay for these 46 companies in 2004 was
$12.6 million. 

Along with big tax cuts and generous rebates, big
corporations are on the government dole big time in
the form of subsidies, otherwise known as “corporate
welfare.”  It’s also known as socialism for the rich
(and capitalism for the rest of us).  In 1997 the
Fortune 500 companies got $75 billion in “public aid”
even though they earned record profits of $325
billion.  They got it in many forms - grants,
contracts, loans and loan guarantees and lots more.
Today there are about 125 business subsidy programs in
the federal budget benefitting all major areas of
business.

Some examples of this government largesse include:

Selling the rights to billions of dollars of oil, gas,
coal and other mineral reserves at a small fraction of
their market value.

The giveaway of the entire broadcast spectrum to the
corporate media, valued at $37 billion in 1989
dollars.

Charging mostly corporate ranchers (including big oil
and insurance companies) dirt cheap grazing rates on
over 20 million acres of public land.

Spending many billions of dollars on R & D and handing
over the results to corporations free of charge.  “Big
Pharma” is notorious for letting government do their
expensive research and then cashing in on the results
by soaking us with sky-high prices and rigging the
game with through WTO rules that get them exclusive
patent rights for 20 years or longer when they’re able
to extend them through the courts.

Giving the nuclear industry over $100 billion in
handouts since its inception and guaranteeing
government protection to pick up the cost in case of
any serious accidents that otherwise might cost the
company affected billions and possibly bankrupt it.

Giving corporate agribusiness producers many billions
in annual subsidies.

You and I, the individual taxpayers, pay the bill for
this generosity.  But we actually pay these
corporations twice - first through our taxes and then
for the cost of their products and services.  And they
don’t even thank us.

The Biggest Recipient of Government Handouts

In the old game of “guns vs. butter”, guess who wins?
Clue - they have shareholders, and their chiefs are
called CEOs.  Guess who loses?  You know that answer
chapter and verse by now.

The Wall Street film character who explained that
greed is good might have added war is even better.
Call it greed made easy or without even trying.  Since
WW II the Pentagon and military-industrial complex
have always been at the head of the handout queue to
get their king-sized pound of flesh in appropriations.
The amounts gotten varied in times of war and peace
or with the whims or chutzpah of a sitting president,
but they’re always big.  The Pentagon, defense
contractors and all the other many and varied
thousands of parasitical corporations servicing the
defense industry are umbilically linked.  All these
corporations profit handsomely in our
military-industrialized society that takes our tax
dollars and hands them over to them by the hundreds of
billions annually.  Their gain is the public’s loss.
If the process were audible we’d be able to hear a
“giant sucking sound” of public resources wooshing
from our pockets to theirs.  It’s also the sound of
our lifeblood being sucked away as we have to pick up
the tab and give up our social benefits as well. 

Once the cold war ended after the Berlin wall came
down and the Soviet Union became 15 independent
republics, there was some hope for a peace dividend -
meaning less for the military and more social
spending. That wasn’t what the first Bush
administration and Pentagon had in mind as they
frantically searched for and easily found new
potential enemies as a way to make the case for
continued militarized state capitalism.  Our language
manipulation experts came up with and sold to the
Congress and public the threat of “growing
technological sophistication of Third World conflicts”
which “will place serious demands on our forces” and
“continue to threaten US interests,” even without “the
backdrop of superpower competition.”  Our defense
strategy would thus be based on maintaining global
“stability” (more code language meaning assuring
obedience to US dominance).

In the 1990 National Security Strategy, the Pentagon
presented its defense budget to the Congress using the
above stated pretext to justify what they wanted.  It
called for strengthening “the defense industrial base”
(code language for the high-tech industry in all its
forms) through generous subsidies as incentives “to
invest in new facilities and equipment as well as in
research and development.”  They got what they wanted,
and it set off the high tech stock market boom that
lasted until the speculative bubble burst in March,
2000 when the economy slowed and slipped into
recession.  Three years later in a post 9/11
environment, the economy was again growing as was
annual defense spending, and the stock market began
another ascent that’s so far continuing. 

The many corporations now benefitting from Pentagon
largesse are so addicted to it that they become the
main promoters of and cheerleaders for conflicts or
preparations for them because they guarantee bigger
handouts that are so good for business.  It’s a dirty
business, but isn’t that the fundamental predatory
nature of large-scale capitalism that relies on a
state policy of imperialism to thrive and prosper.
Senator Henry Cabot Lodge explained it in 1895, in an
unguarded moment, when he said “commerce follows the

flag.”  He might have added that the flag also follows
commerce.  The great political economist Harry
Magdoff, who died this year on New Year’s day, also
explained it well in his 1969 book The Age of
Imperialism when he wrote: “Imperialism is not a
matter of choice for a capitalist society; it is the
way of life of such a society.”  And historian Henry
Steele Commager wrote about how a national security
police state and its bureaucracy lends its great
talents and resources “not to devising ways of
reducing tensions and avoiding war, but to ways of
exacerbating tensions and preparing for war.”  I guess
the conclusion is that in a capitalist society
dominated by big business this “bad seed” must be in
our DNA and we can’t help ourselves as a result.  In
another article I’m working on I refer to our
addiction to war.  So far we haven’t found an
effective antidote.

The reason, of course, is because war is so good for
business.  In the last 6 years alone, and especially
since 9/11, along with all their other largesse and
waste, the Pentagon outsourced on average $150 billion
a year in work to corporations.  Almost half of it was
in no-bid contracts and three fourths of that was to
the five largest defense contractors headed by
Lockheed Martin and Boing.  L-M is the undisputed king
of contractors.  They literally run the enterprise of
empire from the inside and out.  They’re not only its
biggest beneficiary, they also help shape the policy
guaranteeing it - to the tune of $65 million every day
(from our pockets into theirs).  And they collect
their loot even when their killing machines don’t work
right. 

Then, of course, there’s Halliburton and Bechtel.
They’re always big time winners in the handout
sweepstakes.  These two well-connected companies have
been at the head of the queue in the looting of Iraq
and the US Treasury.  They’ve gotten huge no-bid
contracts worth many billions which they then freely
supplemented with gross (read: criminal) overcharges
and gotten away with most of it.  And we can’t ignore
the notorious Carlyle Group, the nation’s largest
privately held defense contractor with the tightest of
ties right to the Oval Office.  They practically sit
in the traditional Kittinger chair there, or whatever
other brand George Bush may prefer.  His father, and
former president, of course, is on their team (and
payroll), and they use him as needed as their main
“door-opener” and “wheel-greaser” (especially in the
lucrative Middle East).  And the old man reportedly
earns a hefty half million dollars for every speech he
makes on behalf of his generous employer.  At that pay
scale he must be hard-pressed to keep his mouth shut.

Guess How Big Funding National Defense Really Is

The Center for Defense Information reported that since
1945 over $21 trillion in constant dollars has been
spent on the military.  And it’s been done largely to
benefit US corporations even though the country had no
real enemies all through those years - except for the
ones we attacked with no provocation or invented to
scare the public so they’d buy into the scam that we
needed industrial strength military spending for
national security.  Ronald Reagan was very adept at
scare tactics and duping the public.  He fathered the
Contra wars in the 80s in Nicaragua and scared half
the public into believing the ruling Sandinista
government was a threat to invade Texas and threaten
the whole country.  He tried and failed to get Mexican
president Miguel de la Madrid to go along with him.
The Mexican president said if he did 70 million
Mexicans would die laughing.  It’s hard to believe the
US public could ever fall for a threat about as great
as I’d be (all 120 lbs. of me) in the ring against
Mike Tyson in his prime.  But although there was none
and the nation was at peace during his tenure, Reagan
expanded the military budget by 43% over what it was
at the height of the Vietnam war (and ran up huge
budget deficits doing it).  The public suffered for it
with the loss of social benefits, but business loved
it and him, and the stock market took off on an 18
year bull run.

But after the 9/11 attack, the floodgates really
opened wide.  In fiscal year 2000 the military budget
was $289 billion, but up it went steadily after that
reaching $442 billion in 2006 and currently is
requested to increase to $463 or higher in 2007.  Add
to that over $41 billion for Homeland Security in 2006
(another public rip-off as part of a move toward a
full-blown national security police state) and annual
multi-billions in funding off the books for the Iraq
and Afghanistan wars that in fiscal 2006 alone amounts
to about $120 billion now and may increase.  Add it up
and the current budget for the military, 2 wars off
the books and Homeland Security, and it comes to over
$600 billion this year. That kind of spending, with
billions more available at the drop of an add-on
presidential emergency request gives a whole new
meaning to the term “war profiteer.”  And while the
big defense contractors reap the biggest benefits,
many thousands of US corporations are in on the take
as the Pentagon is a big buyer of everything from
expensive R & D and high tech weapons to breakfast
cereals and toilet paper. Using the false Bush slogan
about leaving no child behind for his failed education
program, the Pentagon for sure leaves no corporation
behind in its generosity.  Corporations wanting a
piece of the action need only remember and abide by
the scriptural message from John 16:24: “ask and you
shall receive.”  And probably a lot as the Pentagon is
notorious about being sloppy, “spilling” more than
many good sized corporations earn.

Here’s the 2 key questions to ask.  Does anyone feel
safer, and who’ll pick up the tab?  If you hadn’t
noticed, you, the average worker, didn’t share in
those big tax cuts, your income is losing the war to
inflation, your benefits are eroding, and someone some
day has to pay that $8.275 trillion national debt that
keeps rising $2.2 billion every day.  And along with
that burden, we’ve never been less safe, and we, the
public, have to pay the bill because corporate America
never does.  They’re in another queue for more tax
cuts, and we’ll see more social benefits cut to pay
for them too.  In the political game of musical
chairs, corporations get them all every time, and John
Q. Public is always left standing (out in the cold).

How Did We Get Into this Mess, and How Can We Get Out
of It

I’ve already explained what happened.  As to how, it’s
because we let them.  They delivered the message, and
we bought it like lambs led to the slaughter or
believing the “foxes” were really “guarding” us.  Back
in school we all learned and sang those lovely lyrics
that began “Oh beautiful for spacious skies, For amber
waves of grain.”  We believed it and most of us in our
stupor still do.  It’s long past time we realized it
was just a song intended to lull us into complacency
to accept the message and go along with it.  It was a
false message, although there is an America the
Beautiful, but only for the privileged few and no one
else.  And every year it gets worse - a race to the
bottom with no end in sight until we either get there
or wake up in time and do something about it. Unless
we act to cauterize our collective wounds we’ll never
begin the healing process; in fact, we’ll bleed to
death.  We have to find a way to reclaim the democracy
we’re always being reminded we have, but don’t.  If we
really had it, they’d never have to remind us about
it.

People Power Is How We Get Out of It

It’s not too late to turn it around - yet.  And it’s
simple to know what we need to do but always hard
knowing how to go about it - take to the streets,
throw the bums out (we’ve tried that one before and
only put in new bums).  Anyone have some good
suggestions?  I don’t have sure-fire ones, but I’ve
got a piece of good wisdom based on the past and the
present.  History shows that when things get bad
enough people first stir and then react.  If nothing
changes and the pain gets bad enough, then at some
point down go the barricades, and people power steps
into the breach.  The many always win out over the few
when they’re fully committed to do it.  I"ve quoted
famed Chicago community activist Sol Linowitz before
who understood it and once said “the way to beat
organized money is with organized people.” Three
recent and current examples make the point and show us
how. 

All over France for two months up until April,
millions of angry young people and union members
mainly engaged in strikes, sit-ins and mass street
protests to demand the revocation of the new First
Employment Contract (CPE) for workers under 26 years
of age.  French youth refused to become what they
called “a Kleenex generation” - to be used and thrown
away at the whim of employers who want the
“flexibility” to do it. The law was based on the
insane notion that indiscriminate firing was a way to
create more jobs and reduce unemployment.  If it had
gone into affect, it would have given employers the
right to hire young workers on a two year trial basis
and fire them at will at any time during that period.
The protesters understood the sham and how it would
hurt them and stayed out long enough to get the Chirac
government to back down and effectively cancel this
outrageous law. 

A second example is now happening on the streets in
Nepal as many thousands of people from all walks of
life including professionals have been protesting
since early April in a mass civil uprising against
King Gyanendra demanding an end to autocratic
monarchal rule and the restoration of democracy.  At
this writing they still don’t have it, but the king
had to go on national television and promise to meet
their demands.  The protests continued after his first
public statement forcing the king to go further and
agree to the major demands of the main seven-party
alliance including reinstating the lower house of
parliament and giving power back to elected officials.
Doing that would then clear the way to create a new
constitution, hopefully a more democratic process and
an end to the mass protests.  At this writing it
remains to be seen whether resolution has now been
reached, but it appears a major step has been taken
toward it.

The third example has been happening here in the US as
millions of immigrants and working people of all races
have taken to the streets in cities all over the
country.  They’ve seen their rights denied or
threatened, their jobs exported, unions weakened or
destroyed, wages stagnated and essential benefits
reduced, lost or never gotten.  Their protests are
continuing, and they demand equity and justice.
Congress has already taken note and softened some of
their hostile anti-immigrant rhetoric.  But it remains
to be seen how this will turn out.  The Congress will
resume its immigration legislation debate in its post
Easter break session with a final resolution now
unclear.  What is clear is that if a final bill
emerges it will be less harsh than the original House
version that passed and the Senate one still being
debated prior to and during the mass protests.

The lesson is clear.  Mass people actions, if large
and strong enough, get results.  Lots of great
thinkers through the years knew this and said it many
different ways.  I quote some of them often for
inspiration, and I’ll end by doing it again - 2 jewels
from one of my favorites - the Mahatma.  Ghandi wisely
observed that “even the most powerful cannot rule
without the cooperation of the ruled.”  He proved it.
He also famously said - “First they ignore you, then
they laugh at you, then they fight you, then you win.”
He proved that too. 

Anyone ready for a fight?  I hope you are, and if so,
you and we too can win.  And just in case I need to
remind you what you’re fighting for, it’s for your
future, the kind your parents hopefully had, the kind
you want for your children, the kind where you know
you live in a country with a real democratically
elected government that works for all the people and
one where there’s equity and justice for everyone, not
just for the privileged the way it is today.  It’s
also to save the republic and reverse the present
course we’re now on that may destroy it. Think about
it, and start fighting for it. Your future depends on
it.

Stephen Lendman lives in Chicago and can be reached at
.(JavaScript must be enabled to view this email address).  Also visit his blog
address at sjlendman.blogspot.com.