Ayn Rand Hits the Fan, or What the Hell Happened to American Businesses

In 1963 Alan Greenspan said,

“Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear.” (1)

What I hear Mr. Greenspan, a devout follower of the Ayn Rand god, saying is that if government (the inherent evil) would just leave the capitalists alone, their virtues, not vices would prevail and their companies would succeed. Of course per AynRandism if corporations succeed everyone would benefit (all boats rise...yada yada). Well, Saint Greenspan would be in for a shock in 2008. But let's not get ahead of ourselves. 

 

Some excerpts from an article from "I, Cringely" (3)

“In American business, especially, one key theory says that the purpose of corporate enterprise is to “maximize shareholder value.” Some take this even further and claim that such value maximization is the only reason a corporation exists.”

“It’s not even a very old theory, in fact, only dating back to 1976. That’s when Michael Jensen and William Meckling of the University of Rochester published in the Journal of Financial Economics their paper Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. (3)”

“Their theory, in a nutshell, said there was an inherent conflict in business between owners (shareholders) and managers, that this conflict had to be resolved in favor of the owners, who after all owned the business, and the best way to do that was to find a way to align those interests by linking managerial compensation to owner success. Link executive compensation primarily to the stock price, the economists argued, and this terrible conflict would be resolved, making business somehow, well, better.” (3)

Link management compensation to stock price and all will be good, right? We all know that stock prices are a direct reflection of the strength of the company, right? Not really. Managers are masters of manipulating their companies stock prices and know full well how to personally profit from those actions. 

 

Back to the article:

“Maximizing shareholder return has given us our corporate malaise of today when profits are high (but are they real?) stocks are high, but few investors, managers, or workers are really happy or secure. Maximizing shareholder return is bad policy both for public companies and for our society in general. That’s what Jack Welch told the Financial Times in 2009, once Welch was safely out of the day-to-day earnings grind at General Electric: “On the face of it,” said Welch, “shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers, and your products. Managers and investors should not set share-price increases as their overarching goal. … Short-term profits should be allied with an increase in the long-term value of a company.” “(3)

But the problem is that if you take the suggestions of Jensen and Meckling to the end, you get corruption when -

“management just cooks the books and lies. And so shareholder value maximization gave us companies like Enron (Jeffrey Skilling in prison), Tyco International (Dennis Kozlowski in prison), and WorldCom (Bernie Ebbers in prison). “(3)

So where are we. In 2008 “Alan Greenspan, former chairman of the Federal Reserve, finally took some responsibility (sort of) for the crisis. He told Congress:

"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief…”

Translated, in my opinion he means he did not think bank bosses (or corporate CEO's) were so greedy as to drive their companies into bankruptcy for personal gain, but he admits he was wrong. Ayn Rand's John Gault was just a fantasy.

And whether irony or just corrupt stupidity, in 2008 those that worshiped Ayn Rand and demanded that the government stay out of their businesses, were begging for a bail out. If Ms. Rand were truly a god, lightening would have struck these weasels that thought they were the mighty capitalist John Gault. They had to bow to the gods of socialism and accept their hand-outs.

(1) The Assault on Integrity, 1963

(2) http://www.independent.co.uk/news/business/analysis-and-features/quotes-of-2008-we-are-in-a-state-of-shocked-disbelief-1220057.html

(3) http://www.cringely.com/2015/06/24/the-u-s-computer-industry-is-dying-and-ill-tell-you-exactly-who-is-killing-it-and-why/

Obama’s Push for Corporate Rule: A Moment of Opportunity

"Only a few months ago, President Barack Obama was at loggerheads with Republican members of Congress intent on destroying his administration. With bewildering speed, Obama has since turned against his own political base to form an alliance on trade issues with those same Republican members of Congress."

"The goal of Obama’s surprise alliance is to finalize a series of international agreements—the Trans Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement (TiSA)—each of which will strengthen corporate rights at the expense of human rights, democracy, economic justice, peace, and the healing of Living Earth."

"The distinction between democracy and corporate rule is the issue that underlies most other issues. The task before us is to recognize and act on the potential for a momentous political realignment that can make our government truly “of the people.”"

The above is from an excellent article in YES! Magazine (link below)

Yes Virginia, it's a conspiracy. In this article and his book, “When Corporations Rule the World”, David Korten explains how major corporations are conspiring to take control of the world.  The TPP is an important step along this bipartisan journey into global corporate rule where democracy has no place. The advances we've made for social justice soon would be lost in a corporate run government.

Mr. Korten explains how “corporate interests have managed to define the political choice in America as between small government Republicans and big government Democrats. It was a clever misdirection.” A misdirection that we see people buy into every day.

Mr. Korten goes on to say there is hope (and not Obama hope) because it has become evident that there is a Populist Movement emerging. Senator Sanders is a key figure in this movement.

Above text in bold is my emphasis.

http://www.yesmagazine.org/obamas-push-for-corporate-rule-a-moment-of-opportunity?utm_source=YTW&utm_medium=Email&utm_campaign=20150626

An Ironic Twist for H. Clinton or Have You Changed Your Mind About Citizens United?

The Citizens United SCOTUS decision revolved around the documentary Hillary: The Movie, which was produced by Citizens United, intended to be a hit piece. Basically the SCOTUS ruling struck down provisions of the McCain-Feingold Law regulating how much corporations can spend on supporting (or Swiftboating) candidates.

Good Democrats, of course, objected to the ruling because the ruling would break open the flood gates for corporations to financially control elections.

But ahh, the sweet irony. The ruling in the case allowed the corporate attack on H. Clinton (via the documentary), but in a not surprising turn of events, it looks like it may be a boon for H. Clinton in 2016 as it is expected that upwards of a billion dollars may be raised by the Clinton campaign.

So where do the good Democrats stand today re. The Citizens United ruling? Looks to me like the Progressive Wing of the Party still objects to the ruling, but the Non-progressive Wing seems to have changed their minds and are ready to embrace the ruling.

How do you feel today about the Citizens United ruling?

Want to Ignore Politics? Maybe a Bridge Falling on Your Neighbors Will Change Your Mind

Most Americans are too busy with their daily lives for politics. But maybe when a bridge falls killing their neighbors it will wake them up. A crumbling infrastructure is coming to a bridge or gas line near you. You can't hide.


You Can't Have a Functioning Democracy Without High Quality Infrastructure

Earlier this week, Josh and Vanessa Ellis and their 8-month-old son Hudson were killed after debris from a highway overpass in Bonney Lake, Washington fell onto their pickup truck as they were driving through.
According to authorities, a large piece of concrete barrier fell from the overpass onto the Ellis' truck. The overpass was undergoing a construction project at the time.
The tragic deaths of Josh, Vanessa and Hudson Ellis are yet another reminder that US infrastructure is literally crumbling.

Take our nation's bridges and tunnels for example.
Right now, there are over 600,000 bridges in the US that have been labeled as "structurally deficient."

In 2013, a bridge on I-5 in Washington State collapsed, sending three people plunging into a river.

More here: http://www.truth-out.org/opinion/item/30267-you-can-t-have-a-functioning-democracy-without-high-quality-infrastructure

How long will we allow our government to spend on redundant military equipment and boondoggles or give the wealthy tax breaks while ignoring our crumbling infrastructure.

If you think your safety and our national security is important, think infrastructure.

It's Time for Real Change

I think we've come to a point in our history where we are going to have to make a big decision.

For 30 years the corporatists and conservatives have run rough-shod over the middle and lower classes. I don't think any of us here will disagree. Where we disagree is when are we going to stop retreating into poverty and tyranny and stand and fight?

Sadly we have posters here that will argue that things aren't so bad and we can continue down the path for a little while longer. The child poverty rate is only 22%. This is the rational that I see used to justify the support of H. Clinton.

In 2008 people recognized that H. Clinton, the apparent “claimer of the throne”, would not provide the change we needed and a relatively unknown easily defeated her with the promise of change. Whether or not Obama wanted change and failed with his promises or he never was that hot about change is another debate. But here we are faced with the need for change and guess who is once again "the claimer of the throne".

The Democratic Party grassroots should have learned from 2008 and also 2000. In 2000 the DLC/Conservative Wing ran Gore which looked to many as a continuation of the status quo. Gore failed in 2000 and Clinton failed in 2008.

The American people are ready for change and Clinton v. Bush doesn't offer that change.

We need a candidate that is willing to take a chance and fight for change.  

The Government’s TPP Rhetoric (code for bullshit)

The definition of rhetoric is – “Language designed to have persuasive or impressive effect, but which is often regarded as lacking in sincerity or meaningful content”. (www.oxforddictionaries.com/)

Or just a fancy way of saying “bullshit”. Rhetoric is very common in politics so it shouldn’t be surprising to find the government’s website that explains the Trans-Pacific Partnership or TPP choked full of it.
(https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-chapter-chapter-negotiating-5)

This site is a tremendous example of empty rhetoric. Let’s look at some:

Pertaining to the environment:
“Specifically, in the TPP we are seeking:

Strong and enforceable environment obligations, subject to the same dispute settlement mechanism as other obligations in TPP;

Commitments to effectively enforce domestic environmental laws, including laws that implement multilateral environmental agreements, and commitments not to waive or derogate from the protections afforded in environmental laws for the purpose of encouraging trade or investment; “

Pertaining to Labor:

“Specifically, in the TPP we are seeking:

Requirements to adhere to fundamental labor rights as recognized by the International Labor Organization, as well as acceptable conditions of work, subject to the same dispute settlement mechanism as other obligations in TPP;

Rules that will ensure that TPP countries do not waive or derogate from labor laws in a manner that affects trade or investment, including in free trade zones, and that they take initiatives to discourage trade in goods produced by forced labor;”

This is empty rhetoric. It is “lacking in sincerity or meaningful content”

It does not say that the agreement will include any of these wonderful things, only that they will “seek” them.

Will they insist that these good things be included before it’s signed, HELL NO.

Let me know when you can assure me that the agreement will protect the environment, labor, and all of our concerns.

There are 63,000 structurally deficient bridges in the United States.

http://www.dailykos.com/story/2014/04/24/1294382/-Scary-and-sad-There-are-63-000-structurally-deficient-bridges-in-the-U-S#

The expected cost to upgrade all of our bridges is about one trillion dollars.  While this is expensive, it won’t get any better by postponing repairs.  And if you are looking for funding, cut back on some of the multi-billion dollar defense bungles. 

Fixing our crumbling infrastructure would put a lot of Americans to work.  It would also increase the nation's security.

And it isn’t just our bridges that are vulnerable but also the nation’s electrical grid.  From a 2012 article in USA Today: 

http://www.usatoday.com/story/news/nation/2012/11/14/power-grid-vulnerable-terrorism/1704803/

“a long-delayed federal study Wednesday says the U.S. power grid is also vulnerable to terrorist attacks that could cause months of blackouts and billions in economic damages.”

This is because the grid is old, not secured, and without backup replacement parts.