“I don’t believe in some foreign “ism”, but I believe deeply in American idealism.” – Senator Bernie Sanders
Sen. Bernie Sanders billed his talk Thursday at Georgetown University as a speech on “democratic socialism,” but it was immediately clear that what Sanders was really talking about were not the ideologies of a Cold War adversary but deeply American traditions of fairness that have been under attack by ideologues brandishing American flags.
Sanders anchored his speech as building on President Franklin D. Roosevelt’s 1944 “Second Bill of Rights” address. “Real freedom must include economic security.” he said. “That was Roosevelt’s vision 70 years ago. It is my vision today. It is a vision that we have not yet achieved. It is time that we did.”
In the presidential campaign Republican candidates are proposing even more austerity as a solution to the lackadaisical recovery, combined with tax cuts for the rich and deregulation of Wall Street and the giant corporations. Democrats, on the other hand are proposing infrastructure investment and a number of other positive solutions.
There used to be something called “the HP Way.” This was the description of the way Hewlett-Packard (HP) conducted its business and treated its employees and customers.
Management was informal, and the majority of the company’s engineers worked in an open environment, rather than offices, to encourage communication and teamwork. In Bill Hewlett’s word, “the HPa Way is a core ideology … which includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity.”
“The HP Way” had its heyday in the 1960s, and today is credited with helping grow the corporation from a $538 garage outfit in 1939 into the $125 billion behemoth it is today.
There was an emphasis on life outside of work: HP bought up land for recreational activities around the world, and pioneered Friday afternoon beers at the office, for instance.
Experts like Malone say that approach became a model adopted by many in Silicon Valley –including crosstown peers like Apple Inc and Cisco – and helped differentiate the technology giants on the U.S. West Coast from their more strait-laced brethren back east.
That was the old way that HP did business.
Then Came Carly
Then came Carly Fiorina and the new American business model. Fiorina was appointed CEO of HP in 1999 and began to rid the company of its old-fashioned way of doing business – and employees. In 2002 she pushed through a merger with Compaq over the objection of 49 percent of the company’s shareholders (along with the vocal objections of Walter Hewlett, son of one of HP’s founders. See definition: “divisive“.) The goal of the merger was to grow the company, to reduce costs by shedding a huge number of duplicated employees – and to become big enough in the computer industry to make Microsoft reduce its licensing fees for their operating system. But profits and HP’s stock price sank.
In a 2004 analysis, “Losing the HP way,” the Economist reported, “Ms. Fiorina reacted by giving another glimpse of her tough side, firing three top executives on the spot, and stubbornly sticking with her strategy.”
“In the five years that Fiorina was at Hewlett-Packard, the company lost over half its value. … During those years, stocks in companies like Apple and Dell rose. Google went public, and Facebook was launched.
… And I have to point out the obvious: If the board was wrong, the employees wrong, and the shareholders wrong—as Fiorina maintains—why in 10 years has she never been offered another public company to run?”
Bill Taylor, writing at the Harvard Business Review, in “How Hewlett-Packard Lost the HP Way” quotes Thomas Perkins, “the legendary venture capitalist and a former HP director (who has hardly covered himself in glory during this mess), who told the New York Times back in August: ‘I didn’t know there was such a thing as corporate suicide, but now we know that there is. It’s just astonishing.’ ” Perkins was talking about circumstances under a different CEO, but those circumstances commenced under Fiorina’s leadership at the company.
“Corporate suicide.” Perkins may not have understood this at the time, but he was also talking about how the new American business model and adherents like Fiorina have divided and destroyed our country.
Defining Moments In Republican Debate
There were two defining moments for Fiorina in the second Republican debate. One was when she responded to Trump’s insult about her looks, saying, “I think women all over this country heard very clearly what Mr. Trump said.”
Fiorina played the victim card well. Republicans love being victims.
In 2010, Fiorina was caught on an open mic commenting on Boxer’s hair as she was prepping for an interview with CNN affiliate KXTV. Fiorina told her staff that someone saw Boxer on television and “said what everyone says, ‘God what is that hair?’ So yesterday!”
Fiorina lost that campaign for U.S. Senate – her first and only previous attempt to gain political office and experience inside government. Starting at the top: First a run for the Senate and then, losing that, a run for the presidency.
Fiorina’s other defining moment in the debate was her emphatic description of the contents of a video supposedly catching Planned Parenthood selling baby parts for profit. She asked debate viewers to watch the videos and, “watch a fully formed fetus on the table, its heart beating, its legs kicking, while someone says we have to keep it alive to harvest its brain.”
Fiorina is wrong: Nobody watching the Planned Parenthood tapes would see those things. I know, because I recently watched the 12 hours of video that included all footage shot inside clinics.
The videos were produced by the Center for Medical Progress, an anti-abortion group that argues Planned Parenthood has profited from procuring fetal tissue for researchers. The videos do show Planned Parenthood officials discussing fetal tissue, sometimes in ways that are callous and jarring. But there is no moment where Planned Parenthood discusses procuring fetal tissue for profit, nor is there the scene that Fiorina describes.
… Either Fiorina hasn’t watched the Planned Parenthood videos or she is knowingly misrepresenting the footage. Because what she says happens in the Planned Parenthood videos simply does not exist.
This was entirely a fabrication on Fiorina’s part. Josh Marshall of Talking Points Memo writes of this:
Fiorina has a habit of simply making things up. In the case of the parts of the Planned Parenthood videos, the way she made it up seems to verge on the pathological. Again she says she saw something in these videos that completely wasn’t there. And she doubled down on it the next day. This is just lying through your teeth or just being so indifferent to whether things are true or not that it amounts to the same thing.
… [J]ournalists have special responsibilities to look past caricatures and the familiar. In this case, they’re failing that test. You should not be able to tell a slew of small fibs in a big debate and one mammoth one and not have it become part of the campaign discussion at all.
Republican Corporate Establishment Pushing Fiorina Over Trump
The HP Board felt that Fiorina would come in, cast aside the old-fashioned “HP Way” and transform HP into a modern, streamlined, neoliberal money-making machine.
Skip ahead a few years and the Republican establishment appears to have decided that Carly Fiorina, disgraced HP CEO, “debate winner,” maker-up of stuff, will save them from Donald Trump. So the corporate media outlets are pushing Fiorina hard. Blogger Atrios, in “I Guess Jeff Sent A Memo” (referring to Amazon CEO and Washington Post owner Jeff Bezos), included this picture of a list of Washington Post columns, which is representative of what is going on across the media right now:
Fiornia’s campaign created this online ad in response to Trump’s insult:
Brilliant marketing. But in the ad Fiorina refers to the “Democrat” party. As silly as this insult is, it is also significant and revealing. This phrase in the ad is a “dog whistle” to the far right. “Democrat Party” is an old Joe McCarthy/John Birch Society insult, used by the far, far right to identify themselves as part of their cult. Hendrik Hertzberg wrote in 2006 in the New Yorker about this word use, in “The ‘Ic’ Factor“:
There’s no great mystery about the motives behind this deliberate misnaming. “Democrat Party” is a slur, or intended to be—a handy way to express contempt. Aesthetic judgments are subjective, of course, but “Democrat Party” is jarring verging on ugly. It fairly screams “rat.”
… In the conservative media, the phenomenon feeds more voraciously the closer you get to the mucky, sludgy bottom. “Democrat Party” is standard jargon on right-wing talk radio and common on winger Web sites like NewsMax.com, which blue-pencils Associated Press dispatches to de-“ic” references to the Party of F.D.R. and J.F.K.
… This is partly the work of Newt Gingrich, the nominal author of the notorious 1990 memo “Language: A Key Mechanism of Control,” and his Contract with America pollster, Frank Luntz, the Johnny Appleseed of such linguistic innovations as “death tax” for estate tax and “personal accounts” for Social Security privatization. Luntz, who road-tested the adjectival use of “Democrat” with a focus group in 2001, has concluded that the only people who really dislike it are highly partisan adherents of the—how you say?—Democratic Party. “Those two letters actually do matter,” Luntz said the other day.
So this is an introduction to Carly Fiorina. New top-down “business models” that shed people and humanity, and divided and destroyed a time-honored company. Playing the victim for things she herself has done to others. Sneaky “dog whistles” to the anti-woman far right in a video that pretends to advance the cause of women.
Will the country go the way of HP if Fiorina and her backers succeed in winning the nomination and presidency? One former HP worker told me, “The one area that Carly succeeded in was this: destroying jobs at HP and creating tens of thousands of victims with lots of ill-will toward HP. Carly was a great job-destroyer. Why not send her to Washington to see what she can do for America?”
When “Jeb!” Bush started campaigning for president, people starting asking, “Wait, was W the smart one?” Now the rest of the Republican candidates are causing people to ask, “Wait, is Trump the reasonable one?”
Wednesday night we will all get a chance to see the next round of the freak show. Who would have thought that Donald “Mexicans are rapists” Trump would stand out in the Republican field as the rational one? But consider this:
● Running second to Trump, Ben Carson wants to cut taxes on billionaires all the way to 10 percent, while requiring the poor to pay more. Along with the other Republican candidates, he denies the science behind climate change. Carson is the candidate who said, “Obamacare is really I think the worst thing that has happened in this nation since slavery. And it is in a way, it is slavery in a way…” He also proposes letting tax-dodging corporations hoarding more than $2 trillion outside of U.S. out of paying most of the up-to-$700-plus billion they owe.
● Scott Walker is now campaigning almost entirely on destroying unions.
● The Jeb Bush tax plan gives a (another) huge ($3.4 trillion) tax cut to billionaires and corporations.
● John Kasich closed half of Ohio’s womens’ health clinics, forced Ohio women to get ultrasounds before an abortion, forced Ohio rape counseling centers to not mention abortion and demands that Congress defund Planned Parenthood, saying this is all a “Christian moral imperative.”
● Ted “Shut Down the Government” Cruz wants to shut down the government again over funding for Planned Parenthood. So does Bobby Jindal. So does Carly Fiorina.
● Even worse, Mike Huckabee would put the U.S. into default over the debt ceiling to defund Planned Parenthood. He would also give “due process” rights to fetuses.
● Carly Fiorina says “liberal politicians” caused California’s terrible drought.
This could go on and on – you get the idea: These people are nuts. In this crowd, Donald “Laziness Is a Trait in Blacks” Trump stands out as the reasonable one. Consider this:
● Trump says CEO pay is too high, even “disgraceful,” and his Republican voters love it.
● Trump says he was “strongly” against the Iraq war, and his Republican voters love it.
● Trump says cutting Social Security would not be fair to people who need it, and his Republican voters love it.
● Trump calls for raising taxes on hedge-fund managers, and his Republican voters love it.
● Trump is not blindly pro-“free trade” and has come out against the Trans-Pacific Partnership (TPP), and his Republican voters love it.
● Trump even says “single-payer” health care works elsewhere, and his Republican voters love it.
All of these go against conservative orthodoxy – and have helped propel Trump into the lead.
Trump’s Republican Base Rejects Conservative Ideology
During the first Republican debate, the moderators tried to turn the Republican audience against Trump by saying he goes against conservative ideology. “Mr. Trump, it’s not just your past support for single-payer health care. You’ve also supported a host of other liberal policies.” It didn’t work. Following the debate Trump’s support among Republicans surged.
For decades that Republican Party has run a game in which they get votes by feeding “red meat” to “the base” and then, once in office, pass tax cuts for the rich and grant favors for giant corporations while cutting the things government does to make people’s lives better. They offered weak cover stories to justify this economic assault on 99 percent of us, like “tax cuts increase government revenue,” “government takes money out of the economy,” “corporations making decisions is better than government making decisions,” “giving money to billionaires increases jobs.”
Meanwhile the things they promised the base (based on racism, nativism, theocracy) were never actually enacted because they needed to be kept around as red-meat issues for the next election. A significant portion of the Republican electorate finally got fed up with being played.
So along comes Trump, challenging this corporate-conservative orthodoxy on economic issues while still brandishing many of the red-meat policies on social issues the Republican establishment has used to get the votes. Trump is exposing that the Republican base is not as locked into the conservative dogma of trickle-down, austerity economics as the Republicans establishment leadership would have us believe.
Trump goes where the base has been trained to go, combined with obvious popular positions. And he is able to do this because he’s able to self-fund his campaign.
Trump doesn’t offer actual solutions. He says, “I’ll just do it.” He says “I’m rich.” (See inside some of his mansions here.) He says of his competitors, “They’re all stupid.”
Trump’s basic message is, “I’ll make the trains run on time.” This sounds great compared to the rest of them, who say, “I’ll destroy the government, launch endless wars, deny basic scientific and economic facts and give everything of value to a few billionaires.” Who would have thought there could be a gathering that makes Donald “if Ivanka Weren’t My Daughter, Perhaps I’d Be Dating Her” Trump look good. We’ll see how this holds up at Wednesday’s 2nd Republican debate.
P.S. By the way, why haven’t there been any Democratic debates?
The world is out of balance. Everyone’s nervous. There is a glut of money floating around the world and no one offers a “safe place” to put it. The stock market is way up, way down, way up, way down – sometimes all on the same day. China’s currency is having dramatic swings while the U.S. has an enormous, humongous trade deficit.
Super-wealthy people are making and losing hundreds of millions (sometimes billions) in a day – none of it on making or doing actual things that matter. Inequality is soaring. (The top 25 hedge fund managers earn more than all kindergarten teachers in the U.S. combined.) And all around the world, there’s very little actual economic growth.
Meanwhile, most people barely (or don’t) have enough to get by.
Republican economics has been stated a thousand ways by a thousand (always paid) voices. But the basic idea behind all the schemes has been hard to pin down. Finally Republican front-runner Donald Trump has spelled it out in a way anyone can understand.
Thursday’s Progressive Breakfast (you should subscribe, it’s free, it’s really good) contains a story in which Trump clearly articulates the Republican/Billionaire/Wall Street case for a low-or-zero tax on corporate profits: “because they don’t want to pay the tax.”
Trump Sides With Multinationals Donald Trump backs repatriation in Time interview: “Pfizer is talking about moving to Ireland. Or someplace else … Do you know how big that is? It would wipe out New Jersey … They have $2.5 trillion sitting out of the country that they can’t get back because they don’t want to pay the tax. Nor would I … We should let them back in. Everybody. Even if you paid nothing it would be a good deal. Because they’ll take that money then and use it for other things. But they’ll pay something. Ten percent, they’ll pay something.”
There it is in a nutshell. The Republican case for low or no taxes: “because they don’t want to pay the tax.”
Businesses are run for a profit that goes into the pockets of the business’ “investors.” To be an investor requires that you have money. This is a rigged system that by definition channels the returns and gains of our economy to the people who have money in the first place.
That system forces a terrible business model: investors try to squeeze money out of businesses as fast as they can. Then they move on. People who put the money in have even more money, but leave behind them a trail of squeezed-out ruin. This squeezing of the business involves squeezing the workers, squeezing the product, squeezing the customers and squeezing the government out of any taxes that might be owed.
This is bad for America’s long-term economy, people, environment and — since it brings about intense concentration of wealth — bad for our democracy, too. But hey, it’s great for a few already-wealthy people at the top.
I had a conversation over the weekend about the Trans-Pacific Partnership (TPP). She’s for it, because “more trade is always good.”
TPP covers a whole lot more than what we would think of as “trade.” Regardless, let’s look here at the idea that expanding trade is always good.
Trade Is Good
Trade is good. We all at the very least trade our time for our pay. We might make or grow or draw or write something that we sell (trade) for money. Trade is basic.
But how we trade always makes a difference. If we trade our time and get paid too little, is that a good thing because it was a “trade”? Obviously the way trade gets done – the rules/policies that are in place – makes all the difference. So the question to consider is whether our current international trade policies as applied under our current economic order a good thing or a bad thing for We the People of the United States.
“Increasing cross-border trade” sounds like a worthy goal. But if you close a factory in the U.S., move the machines and jobs to a low-wage country, then bring the goods back here to sell in the same stores, you have just “increased cross-border trade.” How should we look at this?
The people now making the goods are paid much less, the investors who own the factory are pocketing much more. Sounds bad, unless you’re one of those owners.
Economists will tell you this is good because fewer of the resources of your economy are being expended to obtain whatever that factory was producing. Those resources can now be applied elsewhere by the investors, toward more productive investment. Sounds good.
Theoretically those American workers will now be freed up to do more productive work, potentially at a better pay rate. Sounds good.
But the way our current economic order works, those resources (the difference between what the American workers were paid and the lower costs of making the stuff somewhere else) are more often applied to the offshore tax-haven accounts of the elite investors than toward “more productive” investments. Sounds bad.
And the way our current system is working, without this new investment those workers remain unemployed, competing with the rest of the people in the workforce, which drives down everyone’s wages except for a few at the top. The reality is that if people laid off due to trade find new jobs, it is at a lower rate of pay. Sounds bad.
Economic theory confronts the reality of America’s current economic order and falls short. The elites use rigged “trade” deals to knock down labor costs. Instead of applying the gains toward investment in our economic future and higher wages for America’s workforce, they apply it to their bank accounts.
The idea of comparative advantage says that countries (regions, etc.) should do what they are good at and trade with others for the things the others do better. Some countries are good at growing bananas and they can trade them for things they can’t grow or make.
But what counts as a comparative advantage?
A few years ago The New York Times took a look at the shift of manufacturing (and associated jobs) from the U.S. to China, in the report “How the U.S. Lost Out on iPhone Work.” The report is known for the Steve Jobs quote, talking to President Obama, saying, “Those jobs aren’t coming back.”
The reason Jobs said those jobs are not coming back was that in China the workers sleep in dormitories, 12 to a room, and can be rousted out of bed at any hour to complete “rush” jobs. They can be made to stand all day, work with dangerous chemicals, are paid very little, cannot organize unions, cannot even vote for a government that would make their lives better.
In other words, China offers a “comparative advantage.” That advantage is that they are not a democracy, workers have no rights and no voice. China is very “business-friendly.” So why would a company like Apple use American workers when they can use workers kept in these conditions?
Our democracy is a comparative disadvantage in world trade. Sounds bad.
Again economic theory confronts the reality of America’s current economic order and falls short. America had factories, China offered low-wage workers and the opportunity to freely pollute. Elites moved the factories to China. Elites use “trade” to attack democracy, turning government of, by and for We the People into a comparative disadvantage in world markets.
Click to see a video of Ian Fletcher talking at, of all places, the Heritage Foundation about his book, “Free Trade Doesn’t Work.” At 21:06 to 25:47 minutes he takes a very good look at the idea of comparative advantage in the real world. In sum:
1) Absence of externalities is not a competitive advantage. The pollution is still there, the workers are still exploited.
2) Capital mobility means you are allocating your capital outside of your own economy.
3) Comparative statistics look at a snapshot, a fixed point in time. If China doesn’t already have a factory making X it is not comparative advantage to go open one there. It is not the best move today if the other country is not already producing the thing for less.
Economies Of Scale
When trade is “opened up” across a border it doesn’t mean that new customers suddenly appear, anxious to buy goods and services produced by America’s small businesses. It’s not like there were no producers and suppliers on the other side of that trade border. The goods and services of an economy were likely already being supplied by someone.
Acme Widget, based in the American town of Plainville, is not suddenly going to get orders from small towns all across the new trading partner Tradonia. Tradonia already has suppliers of widgets. Those suppliers will just as easily come sell their widgets in Plainville.
Economists will say that “opening up” trade across a border increases competition, which benefits consumers. But this is not how it actually works. What has really opened up is a larger playing field with more opportunities for big companies on both sides of trade borders to dominate a larger market than the one they had been dominating, with a resulting decrease in aggregate employment.
In our current economic order big companies have advantages because of their size, and unfortunately rules are made based on which companies are ready to shell out the cash to influence how the rules for competition and domination of industries are made. Larger companies dominate and remove smaller competitors. One or two of these companies will get most of the business in both countries and become very large; the others will be gone. Due to economies of scale the overall widget manufacturing employment will decrease. The new monopolies and near-monopolies will then have the ability to charge what they want.
Once again economic theory confronts the reality of America’s current economic order and falls short. Opening up trade borders is more likely to bring further consolidation of giant companies, not more competition.
These are just a few examples of the problems of academic trade and economic theory confronted with the realities of what actually happens in actual countries.
Another economic theory says that trade will balance as a result of currency adjustments. Supposedly when a country is running a surplus its currency rate will increase and things made in those countries will cost more, so purchases will shift back to the country that had a deficit. But in the real world, the United State competes with real countries that don’t play this way. Our country has an enormous, humongous trade deficit and has run continual trade deficits every single year since the late 1970s when “free markets” and “free trade” ideology came to dominate. This is because we follow an economic theory ideology, and other countries look at reality and adjust. So they win.
Reality trumps economic theories and ideologies – Every. Single. Time.
Here comes the next big one. Now that the corporations have fast-track trade authority in the bag, they are trying to push a huge, huge tax giveaway through Congress. We have to get the word out so this doesn’t just sneak through. We can’t let them continue to rig the system against us like this.
Up To $770 Billion Is Owed On $2.2 Trillion In Corporate Profits Stashed In Tax Havens
You might have heard about all that money the giant corporations have been stashing in tax havens so they can dodge paying their taxes. You might not have heard how much they owe us. Corporations have somewhere around $2.2 billion of “offshore” profits stashed in tax havens. They owe up to 35 percent in taxes on that money. That’s right; they owe up to $770 billion that We the People could have right now for our roads, schools, health care, scientific research, space exploration, to forgive student debt … we could have free college tuition, expand Social Security, high-speed rail across the country…. Instead, we’re told we can’t have these things because there are “budget deficits.”
And on top of that, at least another $50 billion per year of tax money is kept from us because of this scam.
Congress could just tell these corporations to pay up, and We the People would have up to $770 billion to use to make our lives better, and another $50 billion or more each year.
See if you can guess what Congress is getting ready to do instead?
Right now the giant, multinational corporations owe up to $770 billion in taxes on the $2.2 trillion they are holding outside the country in tax-haven mailbox subsidiaries. Right now. They have the cash in the bank (in tax-haven countries) and could write checks tomorrow if Congress told them to. Again, this is taxes they already owe but haven’t paid. Think of the things our country could do with that money.
But instead …
Congress is proposing to give these companies a tax holiday and let them off from paying the taxes they already owe on that money. There is all kinds of complicated language being used to mask what is happening, but it’s really simple: Some members of Congress are proposing letting them off from the taxes they already owe on “offshore” profits, and then letting them off from paying taxes on future profits made “outside the country” from now on.
Quick question: For years these companies have been moving jobs, production and profit centers out of the country to take advantage of this tax dodge. If they are rewarded for this with this huge tax cut, how many more companies will move jobs, production and profit centers out of the country from now on? Bonus question: Will there be any jobs, production or profit centers left inside the U.S. if Congress lets companies off the hook from taxes on profits made from moving jobs, production and profits centers out of the country?
Don’t Let this Sneak Past Us
The corporations and billionaires count on these things sneaking through under cover of complicated language, so we never find out what is happening to us. Later they tell us “we’re broke” and there is no way to “pay for” things like roads, schools, and other needs. They tell us we have “deficits” that could “bankrupt” us, so college tuition has to go up, we have to pay to use toll roads, they have to cut funding for schools, we can’t have high-speed rail, they can’t afford to do scientific research or space exploration or fight global warming or fix up national parks, and so on.
But what is really going on is the game is being rigged. Corporations get huge tax breaks and subsidies, a few billionaires and plutocrats get the cash, and We the People, the 99 percent, have to make up the difference.
We need to get the word out about this. This is the next big one they are trying to slip through before we know what is happening to us.
We have to fight this. We have to make noise. Even if we don’t win this, at least we will know what happened this time. Then, later, when they come back and say there’s no money to do things that make our lives better, we will be able to see through the smokescreen. We will know where the money went, and eventually enough people will understand how the game is being rigged – and stop it.
Congress should tell the giant, multinational corporations that it is time to pay the taxes the already owe on “offshore” profits. They should not reward companies for moving jobs, production and profit centers out of our country.