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September 7, 2016


Parts I and II set out a thumbnail sketch of how post-Potter memo corporations have totally abandoned their former status as stewards of the community, responsibilities to consumers, producers, employees and others affected by their presence. They are now following the Wall Street greed model which has finally and wrongly earned the O.K. of the Supreme Court, i.e., that such corporations have a primary fiduciary duty to enhance “shareholder value,” which necessarily places their former obligations to the community, producers, employees and others on the back burner.

Welch and Dunlap proved that reductions of wages do indeed “enhance shareholder value,” as we have seen earlier in this essay. Thus average inflation-adjusted wages have barely moved since the late 1970s and inflation-adjusted median wages have fallen, resulting, of course, in accelerating wage inequality, our number one domestic issue in this country today. Another obvious result is a stratospheric Dow due, as we have seen, largely to wage theft as the rich and corporate class has cannibalized both the income and wealth produced by our economy whose expropriation has in turn further resulted in tepid aggregate demand and a chronically underperforming economy.

If you take this shareholder value versus living wages for Americans argument to its dry logical end and combine it with the goal of full employment politicians chatter about, then perhaps we should re-institute slavery, where wages were non-existent and we certainly had full employment, which would combine naked greed with good public policy where the rich and corporate class steals all rather than most of the economy’s income and increased worker productivity. Let’s just make the obvious official.

The judiciary with its wrong-headed decision has plainly elevated profit over labor and by doing so has changed the rules of corporate governance resulting in a continuing and unfair distribution of the income of the economy to the narrow few while ignoring the interests of the great majority, who were in the past involved as producers, consumers and the community at large.

So how could all this happen, from right to work state laws to toothless federal labor regulation to deregulation of banking and corporate interests (the latter resulting in bailouts, a near international depression and a Great Recession from which we have still not recovered)? It all comes down to who makes the rules.

Wall Street bankers and their corporate networks and people who work alongside robots in assembly lines have very different interests and values. Wall Street is interested only in profits (now per Supreme Court orders) while corporate workers are interested in wages (a fair share of the economic pie), working conditions, raising and educating their families, and hoping they can set something aside for retirement (in short – economic security – as they once had before the likes of Welch, Dunlap and corporate raiders took over the political – and now the judiciary – process).

What can we as ordinary Americans do to reverse this one-way trip to a relatively demand-less economy en route to failure, demand-less because of wage inequality,  which is only one result among many other greed-inspired legislative, judicial and under-regulated atrocities? We are not powerless.

We cannot order corporations to pay higher wages. We cannot order state legislatures to repeal their right to work laws. What can we do to stop or at least slow this lemming-like procession to the cliff and beyond to economic oblivion and all the political chaos and uprising sure to come (since Piketty, Reich, Stiglitz and other responsible economists write that the current situation is “not sustainable, either politically or economically.” If it is not sustainable, then just when has the damage to our economy reached such a point that we go over the cliff? I don’t know; that is an imponderable because no one can know given the ups and downs en route to the edge.

So what can we do? I’ll be blunt. The way to stop this unfair and inequitable state of affairs and provide a setting for fair sharing of the economy’s fruits is to take back the power to make the rules, to, in words of the street, call the shots. The process is political, but then so was the process that got us into this mess. It can and should and will work both ways. To reiterate, we are not powerless.

We the people must show some countervailing power to this wrong-headed excess of capitalism in order, of all things, to save capitalism from the capitalists, who don’t seem to have any vision beyond immediate profit. They not only don’t see the upcoming cliff; they continue to even argue that we are not headed in that direction. Their only god is the quarterly stock analyst; brilliant economists need not apply.

So how do we stop this madness? We vote for those who say they will correct this gathering disaster before it consumes all of us, and keep their feet to the fire after we elect them to see that this looming catastrophe enjoys political and executive priority, or as Reich puts it better than I: “The only way back toward a democracy and economy that work for the majority is for the majority to become politically active once again, establishing a new countervailing power. The moneyed interests will continue to do what they do best – make money. The rest of us must do what we do best – use our voice, our vigor, and our votes to wrest back economic and political control.”

AMEN!       GERALD     E


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