Society wants cars/antibiotics/furniture/houses/etc but doesn’t want to make them ourselves through our government.
In order to accomplish functions like these that government wants accomplished but doesn’t want to do itself, government “contracts out” those functions. Corporations are those contracts. Corporations facilitate aggregation and manage of resources (huge sums, labor, etc) that are beyond the scope of individuals. We “contract out” through corporate charters to get these things done for us.
When You Look At It This Way
When you look at it this way — that government is the way all of society’s functions are managed(of course it is) and that corporations & the “private sector” are just “contracting out” some government functions — it gives people a way to take back the power in their own thinking. Who is the boss of who? How should corporations be regulated? Who should be regulating them? Etc.
Where Things Went Wrong
Here is where we went wrong. Executives at corporations are allowed to use corporate funds to influence society and pay politicians to allow things that enrich those executives personally.
We live in a society, and getting things done for society is what government is for. Government is society’s way to make decisions about society’s resources, economy and future. Period. Anyone who tells you you don’t need government, or that government shouldn’t do this or that, is actually just trying to BE the government, for their own benefit.
EVERY decision about society’s resources, econony and future is made by government, one way or another. Period. Every. Single. One. Socialism, capitalism, communism, dictatorship, aristocracy, oligarchy, democracy, etc are just descriptions of how that decision-making is divided up. It’s about who makes the decisions and who gets the benefits. All the “ideological” battles are really just all about keeping the public from understanding that.
In the US, supposedly a democracy where the decisions are ultimately made by “We the People,” we hear about the “public sector” and the “private sector” of our economy. What we call “the private sector” is really just the government “contracting out” the functions of managing society. Corporations are those contracts. From the recent post about corporations, Understanding What a Corporation Actually Is Can Help Restore Democracy,
We the People want to have factories to build cars or toasters. We the People could do this – build the factory, hire the managers, organize supply chains, provide insurance. etc. – ourselves but instead we have come up with corporations as a way to “contract it out” to private investors to accomplish these jobs for us.
Corporations are the contracts government makes when it “contracts out” its functions. Period. Government charters corporations to do things government doesn’t want to do itself. Those charters come with conditions and rules.
Except our currently captured government doesn’t enforce the agreements.
A Currently ‘Hot’ Example
Government contracts out money creation. We charter banking corporations to do that function of government for us. The Post Office could do that as well, but we, for various reasons, choose to let a few “capital” holders – wealthy people – do that and reap the returns.
Corruption allowed the finance industry to operate outside of sensible government oversight, even as the world has experienced the consequences of this over and over again. So here in Silicon Valley and around the world, tech employees are waiting to find out if they’ll get their paychecks or get laid off next week. The world is wondering if contagion will spread that fear. Again. (Last time, because of corruption, not one banker type was held accountable. Not one.)
Also here in Silicon Valley it is raining harder than almost ever – except for a couple weeks ago. Flooding everywhere. I mean, torrential, incredible rain pouring down right now. This is because corruption has caused governments to allow the industry causing this to keep putting more and more carbon into the air even as we all know what the consequences will be.
The news lately has been about train derailments devastating localities. This happens because corruption allows wealthy rail-owners to keep governments from making them operate safely.
Inequality is now completely out-of-control. 60% of Americans now live paycheck-to-paycheck, not even able to raise $500 to cover an emergency like a car breakdown. The government doesn’t raise the minimum wage or otherwise address this because of obvious corruption. Million upon millions are spent convincing these people to blame government for this and vote for those backed by that money, and abolish democracy. “I am your retribution.”
The Supreme Court “rules” that this is all OK. Any amount of secret money is allowed to influence elections. People trying to fix this face millions of dollars spent smearing them in LOCAL elections. This Supreme Court we have is the way it is because of corrupt money spent to put them there.
fight is going to be a turning point of some kind. The right intends to let the country default to stop “government spending.” They mean it.
Biden’s choice is to let that happen, cave like Obama did, or enforce the Constitution, which says the govt has to pay its bills.
For those insisting that “Mint the Coin” as a solution to this is a “gimmick” – (as if the debt ceiling wasn’t just a gimmick) – compare that to what we do now:
The idea that the constitution providing the power to "coin money" implies the ability to charter Federal Reserve Banks that can issue paper currency and open book entry accounts is much more of a gimmick than just… coining money.
Our federal budget is not like a family “kitchen table” budget. We stopped using gold as our currency a long time ago. We don’t mine or “round up” money at the federal level. Our government does not get “revenue” from taxes. It does not “borrow” money, it prints it.
(In this clip economist Stephanie Kelton explains that our government does not operate like a family “kitchen table” budget):
We (representative democracy through our Congress) decide that we’re going to allocate our resources toward accomplishing something, and we issue dollars as an exchange medium toward that. There are things Congress should do along with issuing currency (which we are not doing because of neoliberalism): Make sure we allocate resources we have (allocate toward steel increasing capacity before allocating toward using more steel than we have) and tax enough to balance the distribution (tax the rich) and soak up some of those circulating dollars.
Breaking away from the idea that the federal govt operates with “kitchen table economics” is a paradigm shift. You see it completely one way (deficits, debt, govt spending are bad), and then when something clicks you can’t see it that way anymore, only the new way (MMT, govt issues currency), and then you are frustrated seeing so many getting it so wrong.
Our government issues currency. So of course we could just “mint a coin” to issue dollars to pay off bondholders. But if we did that, the most dangerous question arises: If we can just issue money to pay bondholders, why can’t we issue money to … do things that people want and need?
Shake The Foundation
Minting platinum coins with a face value of $1 trillion and depositing them with the Federal Reserve is Constitutional and solves the problem. But it brings up questions that shake the foundations of neoliberalism. If we can “mint coins” to pay bondholders, why can’t we mint coins to do things that people want and need? Instead of just relying on private capital (the rich) to make investment decisions and get things done in our economy?
So Biden can do the right thing and just … pay our bills. But then the neoliberal order breaks down. If We (through Congress) can decide to … you name it, then why are we depending on “the investor class” (capital) and “market solutions” etc to decide where to invest, allocate resources, do the planning and everything else?
You’re going to need a Math degree to follow this, as with everything about Medicare. Actually I HAVE a Math degree and have trouble following it.
Before I Start
(You can skip this section. I wish I could have. You’ll wish that when you’re turning 65.)
I’m old enough that I am on Medicare. Figuring out what to sign up for was AMAZINGLY difficult. Part A, Part B, Part D (privatized) and then you need a private “Medigap” Supplemental plan. You can get Plan A or B or C or D or E or F or G. I think. See if you can understand this from Medicare.
Note: Medigap plans sold to people new to Medicare can no longer cover the Part B deductible. Because of this, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans that cover the Part B deductible (Plan C or F). If you already have or were covered by Plan C or F (or the Plan F high deductible version) before January 1, 2020, you can keep your plan.
Or you can get Medicare Advantage, which are really almost all privatized scams. And then there are private supplements for vision & dental (both absolute scams worthy of another post!!!) Payments for these all come out of my Social Security.
Fortunately where I live we have Kaiser, which is NOT a for-profit corporation so it isn’t a scam and actually is pretty good. I was already on Kaiser so I stayed on Kaiser’s Medicare Advantage.
Everyone please read this Facebook post “from inside Southwest.” It is spot on. It describes how the meltdown happened because the company had been stripped for two decades by executives looking for short-term profits at the expense of the company.
What it describes is not just happening at this airline, though, and not just at airlines. This is what has been happening at HOW MANY companies for a long time! But more than that, it is of a piece with what has been happening to our democracy.
All the incentives are for squeezing everything out of a company to get the appearance of profit THIS QUARTER to get the STOCK PRICE UP to get the EXECUTIVE QUARTERLY BONUS and it is all at the expense of everything else – the customers (obviously) , the suppliers, the employees, and the future of the companies.
Our government is supposed to oversee the way companies operate. They operate under RULES set up by our government.
Rather than get into the specifics of those rules, ask yourself if a government operating in the interests of the people of the country and the long-term good of the companies of the country would allow what we are seeing at SWA and so many other companies to continue? Of course not!!! Continue reading →
This post originated at Imagine Democracy. If you follow all the links, it pieces together.
Over at sister-site Government Cheese, a discussion of capitalism, propaganda and how a few wealthy people keep things under control
Capitalism literally means that the people with wealth make the investment decisions for society & get the return on investment, and the broad public don’t.
All the rest is just propaganda. Capitalism has nothing to do with “markets” or “freedom” or any of the rest.
It’s really so simple. It’s how a few people maintain control of society for their own benefit and it’s been this way for thousands of year, under different labels. It’s what a monarchy is. The King and his buddies control the wealth. “WE should have this and you should not and here’s why.”
It’s why the United States was such a breakthrough. WE THE PEOPLE will decide what’s best for us, not you. Government of, by and for THE PEOPLE. Not the elites, the wealthy, the aristocrats, the priesthood, the monarchy, the warlord, whatever label put on the ruling wealthy. A country run for the benefit of the people in the country. Whatever label we put on that – democracy, socialism, whatever.
That’s all. All the rest is just propaganda.
Read Lincoln’s Gettysburg Address in the context of the monarchies of Europe just salivating waiting for “the Union” – the experiment in democracy – fail so they can get the world back where they want it.
Capitalism: Maintain a “reserve army of the unemployed” to keep wages low. Keep public services (the things government does to make people’s lives better) and taxes at the top down and keep the people from organizing (democracy) to protect themselves.
Capitalism part 2: As life gets worse, bathe the masses in propaganda and point them at “the other” for blame.
Twitter is the de facto town square, information source here and in much of the world. This is because of the “network effect.” Everyone has to be there because everyone else is. It doesn’t work any other way. Facebook is that for connecting with friends and relatives.
That’s what a public utility is.
Our government used to recognize and regulate that. The telephone system required the network effect in order to work. That could be only one. So the government regulated it.
We all know the reason the government doesn’t regulate now is because it is captured by vested interests.
This is what happens when our “system” is run at the whim of billionaires and petrostates. $44 billion (44 thousand million) is actually not that much money to Musk and the Saudis.
So Twitter is melting down. Twitter became the de facto “town square.” It was a “public good” where We the People could get news and discuss things.
One super billionaire (plus Saudi Arabia) purchased it and is destroying it. He was allowed to purchase in an obvious attempt to influence what the pubic understands – against the “public interest.” This is because we no longer have a functioning government.
We are SO FAR from remembering that corporations are entirely creatures of law, which means they are created by OUR laws. Nothing more. We the People – government – created the idea of corporations as a way to get investment for large projects – things WE want done. Corporations were created to SERVE US.
We used to REGULATE corporations to be sure that these entities we created act in the public interest. Here we are with such an OBVIOUS demonstration of the need for government to step in and regulate. Quickly. But the concept has been erased from our brains.
We Are Supposed To Be The Boss Of Them.
Government is supposed to be We the People acting to make OUR lives better. It has been “captured” and acts now only on the interest of those who own these entities and so often against the interest of We the People. We allowed corporate money to “leak out” of the corporation and be used by individuals (the executives of the corporation) to literally bribe government officials to look the other way and allow them to loot the corporations and public sphere. That money also feeds a massive propaganda apparatus that brainwashes us into forgetting the very idea that We the People are supposed to be in charge here.
The tactic of trying to “shame” a corporation away from harming the environment, consumers and/or democracy relies on a misunderstanding of what a corporation is. Corporations serve as masks for the actual power-brokers, absorbing the public disdain for the power-brokers’ decisions.
Here’s the thing: A corporation is a contract. It is a legal agreement enabled by our (“We the People”) government. That’s it.
Corporations are not sentient entities. Contracts don’t “think” or “want” or “need” or say” or “care” or “do” anything. Neither does a will, nor a lease, nor a confidentiality agreement. Corporations also can’t be “greedy” or “criminal” or “good” or “altruistic.” But people can.
Corporations don’t do things, but the executives & Board of the corporation do do things.
Go After The Doers
Corporations don’t “behave,” executives and Board members do. Executives and Board members also care more about their personal interests than about the interests of a corporation or institution they are supposed to be managing. Instead of thinking you can change corporate “behavior,” activists should instead go after the executives and Board members who actually make decisions.
Unions Understand Power
Way back when I was consulting for unions I was involved in a campaign to get a large public institution to stop hiring non-union construction companies. This involved researching the Board members of the institution, learning about their public lives, and finding strategic points to target.
Example, one Board member funded a symphony. The union targeted the symphony with very public actions naming and shaming the Board member for forcing people’s living standards down, risking worker’s safety, etc. The Board member cared what the symphony social group thought about him. The union shamed him in front of people who mattered to him.
Another Board member was an executive at a company that was getting ready to go public. The last thing he wanted was bad publicity of any kind directed at him.
The union conducted other similar public shaming actions targeting the actual decision-makers.
The union publicly shamed the decision-makers, not some non-sentient entity (a corporation or institution) that masked the actual decision-makers. Things changed real quick.
This post first appeared at Government Cheese – Chronicling the Collapse of democracy
Government budget cuts are not what they seem.
Understanding history could also be called ‘wisdom.’ Wisdom told stories about “eating the seed corn.” If you eat the seed corn you can’t plant your crops the following year and everyone eventually starves.
In the early 80s Reaganism/Thatcherism (neoliberalism) convinced the country to drastically cut taxes on the rich and “pay for” it by cutting spending. The US stopped spending on maintaining and modernizing infrastructure – especially transportation infrastructure, on education, on science … on so many things. So we lived off of prior investment for so long. But the infrastructure deteriorated and we certain never modernized it. (Just look at our rail and transportation systems, compared to the rest of the world.)
All that $$ was transferred to the already-wealthy top few who paid for the propaganda that convinced the rest to do this.
Another piece of this scam was “saving money” through privatization. Using local trash collection as an example, cities would “save money” by getting rid of public trash collection and contracting with the “private sector” to do this more “efficiently.” What this meant was laying off the decently-paid public employees and hiring them back at minimum wage with no benefits. The infrastructure – trucks etc – to do this would receive little maintenance, collection schedules would be cut back, and people had to drag their trash to the curb instead of having it picked up at the house.
This didn’t actually save money, it shifted it. The newly minimum-wage workers would lose their houses which reduced property prices for e everyone and killed the tax base, they’d go on public assistance, schools would suffer and have higher costs, etc across the board. And poor people can’t spend much so all local businesses suffer, too.
Etc etc etc we can see it all around us now. But it is too late.
You can “save money” by not changing the oil in your car. But have you ever seen a car that has never had its oil changed? After a while white smoke pours out the back because the rings are ruined. Other parts of the engine are also being ruined. Eventually the engine will seize up and quit and you have to either replace the engine or scrap the car. A simple and inexpensive procedure every few months would have prevented many thousands of dollars in expenses later.
After the Reagan tax cuts we “made government smaller” in several ways that are coming back to bite us now. One way we “saved money” by not “changing the oil” was by deferring maintenance of the country’s infrastructure – the water systems, levees, dams, roads, bridges, airports, ports, rails systems, electrical systems, and the rest of the things we all rely on to bring us safe water, get us to work, ship products and generally move our economy and live our lives.
Now the American Society of Civil Engineers’ (ASCE) most recent “Infrastructure Report Card” estimates we need to spend $3.6 trillion just to bring the infrastructure up to where it should be, never mind catching up to the rest of the word with high-speed rail and smart electrical grid systems. The bill is getting more expensive every year, and people are dying as bridges, roads and other important infrastructure components fail. Thousands died in New Orleans when the levees failed.
If people with OK public-employee jobs are replaced by lower-paid workers the community is poorer in the aggregate. More people will need public “safety-net” services. There will be foreclosures. Tax revenue drops because of lower pay but also because poorer people can’t spend as much in stores. Sales taxes drop as stores face fewer customers able to get by.