Can the world’s biggest corporations act with impunity? When it comes to General Electric (GE) — the eighth-largest U.S. corporation, with $146.9 billion in sales and $13.6 billion in profits in 2012 — the answer appears to be “yes.”
Let us begin with a small-scale case in upstate New York, where in late September 2013 GE announced that it would close its electrical capacitor plant in the town of Fort Edward. Some two hundred workers will lose their jobs and, thereafter, will have little opportunity to obtain comparable wages, pensions, or even employment in this economically distressed region. Ironically, the plant has been highly profitable. Earlier in the year, the local management threw a party to celebrate a record-breaking quarter. But the high-level financial dealings of a vast multinational operation like GE are mysterious, and the company merely announced that the Fort Edward plant was “non-competitive.” The United Electrical Workers (UE), the union that has represented the workers there for the past seventy years, has already begun a vigorous campaign of resistance to the plant closing, but it is sure to be an uphill battle.
If we dig deeper into the record, a broader pattern of corporate misbehavior emerges. Indeed, the Fort Edward factory is one of two GE plants that polluted the communities at Fort Edward and nearby Hudson Falls, as well as a 197-mile stretch of the Hudson River, with 1.3 million pounds of cancer-causing PCBs for several decades. Worried about the dangers of PCBs, workers asked managers about them, and were told that these toxins were perfectly safe — in fact, that the workers should rub the PCBs on their heads to combat baldness! When the extent of this environmental disaster began to be revealed in the 1970s, GE began a lengthy campaign to deny it and, later, a multimillion dollar public relations campaign to prevent remedial action by the Environmental Protection Administration. GE lost this battle, for the EPA insisted upon the dredging of the Hudson River and ordered GE to pay for it. Thus, the Hudson Valley became the largest Superfund cleanup site in the United States, with a project that will take decades to complete.
GE has produced other environmental disasters, as well. Three GE nuclear reactors at the Fukushima Daiichi nuclear power site in Japan melted down on March 31, 2011. This was the world’s worst nuclear accident in three decades, and quickly spread radioactive contamination nearly one hundred fifty miles. Indeed, the stricken reactors are still sending three hundred tons a day of radioactive water flooding into the Pacific Ocean. Dr. Helen Caldicott, who has studied nuclear power for decades, has estimated that up to 3.5 million people could eventually die from cancer thanks to the Fukushima radiation release. In the late 1960s and early 1970s, when these boiling water nuclear reactors were installed, GE’s engineers and management knew that their design was flawed. But the company kept selling them to unsuspecting utilities around the world, including many in the United States. As a result, there are still thirty-five GE boiling water reactors operating in this country, most of them located near population centers east of the Mississippi River. Currently, in fact, more than 58 million Americans live within fifty miles of a GE nuclear reactor.
Another important product produced by GE is the export of jobs. According to an extensive New York Times report on GE in March 2011: “Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment.” By the end of 2010, another study found, 54 percent of GE’s 287,000 employees worked abroad. Not surprisingly, the company’s overseas operations in that year provided most of its total revenue. Responding to GE’s claim that it had created thousands of new jobs in the United States during the Obama administration, Chris Townsend, the political action director of the UE, produced a list of 40 U.S. plants the company closed in the country during the same period.
Townsend also noted that, even when GE kept its operations going in the United States, it slashed wages, sometimes by as much as 45 percent at a time. For example, the work of the Fort Edward plant will be moved to Clearwater, Florida, a non-union site where GE pays many workers $12 an hour and hires others through a temp agency at $8 an hour — little more than the minimum wage.
Although technically a U.S. corporation, GE — with operations in 130 nations — apparently feels little loyalty to the United States. Jack Welch, a former GE CEO, once remarked: “Ideally, you’d have every plant you own on a barge to move with currencies and changes in the economy.” According to a Bloomberg analysis, to avoid paying U.S. taxes, GE keeps more of its profits overseas than any other U.S. company — $108 billion by the end of 2012. Most of these profits, GE declared, would be invested in its foreign business enterprises. Thanks to this tax dodge and others, GE reportedly paid an average annual U.S. corporate income tax rate of only 1.8 percent between 2002 and 2011. In 2010, when GE reported worldwide profits of $14.2 billion, it paid no U.S. corporate income tax at all. Instead, it claimed a tax benefit of $3.2 billion. This is a sweet deal for that giant corporation, for the official corporate tax rate is 35 percent.
Despite this appalling record, the U.S. government has been very generous to GE. During the financial crisis of 2008-2009, the federal government’s Temporary Liquidity Guarantee Program loaned approximately $85 billion to GE Capital, the company’s huge finance arm that accounts for roughly half of GE’s profits. GE needed the bailout because, among other reasons, GE Capital was marketing subprime mortgages, making GE the tenth-largest subprime lender in the United States. The Federal Reserve also bought $16.1 billion worth of short-term corporate i.o.u.’s from GE in late 2008, when the public market for this kind of debt had nearly frozen, and GE became one of the largest beneficiaries of this federal program. In yet a further indication of GE’s influence, President Obama appointed Jeffrey Immelt, GE’s CEO, as chair of his Council on Jobs and Competitiveness, which strategizes about how to revive America’s manufacturing base. One of Immelt’s favorite panaceas is to end taxes on the overseas profits of corporations.
Thus, it might seem that those two hundred embattled workers at Fort Edward have no possibility at all of effectively challenging a corporation this wealthy and influential. But stranger things have happened in the United States — especially when Americans have had their fill of corporate arrogance.
Many giant profitable U.S. corporations are increasingly abandoning America while draining it at the same time.
General Electric, for example, has paid no federal income taxes for a decade while becoming a net job exporter and fighting its hard-pressed workers who want collective bargaining through unions like the United Electrical Workers Union (UE). GE’s boss, Jeffrey Immelt, makes about $12,400 an hour on an 8-hour day, plus benefits and perks, presiding over this global corporate empire.
Telling by their behavior, these big companies think patriotism toward the country where they were created and prospered is for chumps. Their antennae point to places where taxes are very low, labor is wage slavery, independent unions are non-existent, governments have their hands out, and equal justice under the rule of law does not exist. China, for example, has fit that description for over 25 years.
Other than profiteering from selling Washington very expensive weapons of mass destruction, many multinational firms have little sense of true national security.
Did you know that about 80 percent of the ingredients in medicines Americans take now come from China and India where visits by FDA inspectors are infrequent and inadequate?
The lucrative U.S. drug industry – coddled with tax credits, free transfer of almost-ready-to-market drugs developed with U.S. taxpayer dollars via the National Institutes of Health – charges Americans the highest prices for drugs in the world and still wants more profits. Drug companies no longer produce many necessary medicines like penicillin in the U.S., preferring to pay slave wages abroad to import drugs back into the U.S.
Absence of patriotism has exposed our country to dependency on foreign suppliers for crucial medicines, and these foreign suppliers may not be so friendly in the future.
Giant U.S. companies are strip-mining America in numerous ways, starting with the corporate tax base. By shifting more of their profits abroad to “tax-haven” countries (like the Cayman Islands) through transfer pricing and other gimmicks, and by lobbying many other tax escapes through Congress, they can report record profits in the U.S. with diminishing tax payments. Yet they are benefiting from the public services, special privileges, and protection by our armed forces because they are U.S. corporations.
On March 27, 2013, the Washington Post reported that compared to forty years ago, big companies that “routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits,” are now reporting less than half that share. For instance, Proctor and Gamble was paying 40 percent of its total profits in taxes in 1969; today it pays 15 percent in federal taxes. Other corporations pay less or no federal income taxes.
Welcome to globalization. It induces dependency on instabilities in tiny Greece and Cyprus that shock stock investments by large domestic pension and mutual funds here in the U.S. Plus huge annual U.S. trade deficits, which signals the exporting of millions of jobs.
The corporate law firms for these big corporations were the architects of global trade agreements that make it easy and profitable to ship jobs and industries to fascist and communist regimes abroad while hollowing out U.S. communities and throwing their loyal American workers overboard. It’s not enough that large corporations are paying millions of American workers less than workers were paid in 1968, adjusted for inflation.
Corporate bosses can’t say they’re just keeping up with the competition; they muscled through the trade system that pulls down on our country’s relatively higher labor, consumer and environmental standards.
Corporate executives, when confronted with charges that show little respect for the country, its workers and its taxpayers who made possible their profits and subsidized their mismanagement, claim they must maximize their profits for their shareholders and their worker pension obligations.
Their shareholders? Is that why they’re stashing $1.7 trillion overseas in tax havens instead of paying dividends to their rightful shareholder-owners, which would stimulate our economy? Shareholders? Are those the people who have been stripped of their rights as owners and prohibited from even keeping a lid on staggeringly sky-high executive salaries ranging from $5,000 to $20,000 an hour or more, plus perks?
Why these corporate bosses can’t even abide one democratically-run shareholders’ meeting a year without gaveling down their owners and cutting time short. To get away from as many of their shareholder-owners as possible, AT&T is holding its annual meeting on April 26 in remote Cheyenne, Wyoming!
Pension obligations for their workers? The award-winning reporter for the Wall Street Journal Ellen E. Shultz demonstrates otherwise. In her gripping book Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, she shows how by “exploiting loopholes, ambiguous regulations and new accounting rules,” companies deceptively tricked employees and turned their pension plans into piggy banks, tax shelters and profit centers.
Recently, I wrote to the CEOs of the 20 largest U.S. corporations, asking if they would stand up at their annual shareholders’ meetings and on behalf of their U.S. chartered corporation (not on behalf of their boards of directors), and pledge allegiance to the flag ending with those glorious words “with liberty and justice for all.” Nineteen of the CEOs have not yet replied. One, Chevron, declined the pledge request but said their patriotism was demonstrated creating jobs and sparking economic activity in the U.S.
But when corporate lobbyists try to destroy our right of trial by jury for wrongful injuries – misnamed tort reform – when they destroy our freedom of contract – through all that brazenly one-sided fine print – when they corrupt our constitutional elections with money and unaccountable power, when they commercialize our education and patent our genes, and outsource jobs to other countries, the question of arrogantly rejected patriotism better be front-and-center for discussion by the American people.
- Beware the New Corporate Tax-Cut Scam: LIFT Is A Big LIE (ourfuture.org)
Protesters blocking a train near a nuclear processing facility in Toronto, Canada on February 3, 2013.
Canadian natives and anti-nuclear activists have blocked a rail line, demanding the shutdown of a nuclear processing facility in the country.
The protesters, including the members of the Idle No More movement, blocked a train, on Sunday, near the General Electric-Hitachi nuclear plant in Toronto, after staging a demonstration at the facility and a march earlier.
“Uranium is stolen from indigenous lands and it leaks radiation all along the fuel chain,” said anti-nuclear activist Zach Ruiter.
Another protester from Serpent River First Nation said, “I’m here because uranium, it really affected my reserve back home,” and added, “It did a lot of damage to our river. We can’t use the river no more, we can’t fish in it. We can’t drink the water.”
Under a Canadian law, the government has the right to seize or sell land from the indigenous people to the private sector.
The aboriginal people say the government is using the law to force them flee their land.
Legal experts have called the law unconstitutional and a potentially genocidal piece of legislation that is intended to do away with the collective rights of Canada’s 1.2 million natives.
The Idle No More Movement was inspired by the six-week hunger strike of Attawapiskat Chief Theresa Spence, which began on December 11, 2012, as a protest against the violation of the rights of Canadian natives.
Insurance companies make a simple wager with you each time you sign a policy. They are betting that, over the life of the policy, they will pay out less to you and your beneficiaries than you will pay them.
Insurance companies of all kinds make tidy profits on this simple wager. If they don’t, sometimes the government will bail them out.
Either way, insurance is still just a bet. And in America, we do not have a healthcare system. We have a health insurance industry.
That industry has been one of the most profitable sectors of the economy for well over a decade. But costs skyrocketed and care suffered. We heard horror stories about rationed care, denied procedures and corporate bureaucracies run amok. Ironically, these were the horror stories we were supposed to hear if the government took the reigns of the “best healthcare system in the world.”
So, instead of a single-payer healthcare system, we got The Affordable Care Act—aka Obamacare. Instead of retiring the health insurance industry and its actuarial tables and profit margins and wagers, Obama “saved” the health insurance industry and enshrined it in perpetuity as the “Health Insurance-Industrial Complex.”
As the Affordable Care Act’s provisions begin to take effect, the folks in the Complex are wasting no time doing what they can to keep their profits tidy. Leading insurers in California are seeking increases in premiums ranging from 20% to 26%. Regulators in Florida and Ohio have already approved increasing premiums as much as 20%, and, since the ACA doesn’t set federal standards, insurance companies are moving in a number of states to force these spikes in premiums.
Remember, if you can “afford” health insurance, you have to buy it. If you refuse, you’ll pay a penalty to the government at tax time. Some are exempt from this mandate. But, in effect, the ACA has guaranteed the health insurance industry a captive market.
Meanwhile, they continue to change the terms of all those bets they’ve placed against millions of Americans and the cost of the “best healthcare in the world” continues to rise. When compared to other nations with some form of single-payer system, the difference is so stark that it’s almost obscene. It’s not just the $800 difference between an MRI in France versus the U.S., it’s almost every part of a system that has at its heart the relentless desire to turn a profit.
Even worse, a much-ballyhooed part of the promised “21st Century transformation” into greater “affordability” has turned out be little more than a profiteering scheme.
Remember the “streamlining” and “cost savings” guaranteed from the conversion to electronic medical records? Well, it hasn’t quite panned out. In fact, the only real beneficiaries of the conversion are companies like General Electric that sell electronic medical records systems. Not coincidentally, GE and other interested parties funded the key RAND study in 2005 that both predicted $81 billion in savings for America’s health care system and also became the driving rationale for the profitable conversion.
This type of closed system is par for the course in Washington, D.C.
Every door revolves in the nation’s only recession-proof city. Is it any surprise that the woman who wrote the Affordable Care Act is now leaving the White House for a job with health care giant Johnson & Johnson? Liz Fowler worked for Senator Max Baucus (D-MT) during the drafting of the ACA and had the primary responsibility for authoring the legislation. After its passage, she migrated to the White House to help with implementation. Seems reasonable enough. However, it is important to note where she was before joining the staff of Senator Baucus. Yup, you guessed it…she was a bigwig at WellPoint, the nation’s second leading health insurance company with nearly 54 million policyholders.
All of this makes you wonder who knew whom in the breast milk-pump industry, which is seeing a huge spike in its profits thanks to a new coverage requirement written into the ACA.
It may be too early to render judgment on a law that hasn’t yet been fully implemented, but it is not too early to determine that the profit motive might simply be incompatible with the equitable delivery of healthcare. As matter of course, businesses try to lower costs and increase revenue. That may be okay when they sell scissors or candlesticks, but it seems ill-suited to deliver labor-intensive care for those who are most vulnerable.
And as far as the health of the insurance industry, it’s a safe bet that they’ll keep coming out on top as the Affordable Care Act is fully implemented.
JP Sottile is a freelance journalist, published historian, radio co-host and documentary filmmaker (The Warning, 2008). His credits include a stint on the Newshour news desk, C-SPAN, and as newsmagazine producer for ABC affiliate WJLA in Washington. His weekly show, Inside the Headlines w/ The Newsvandal, co-hosted by James Moore, airs every Friday on KRUU-FM in Fairfield, Iowa. He blogs under the pseudonym “the Newsvandal.”
Legislation that was supposed to help smaller companies go public has aided larger firms to keep financial data out of the hands of investors.
The “Jumpstart Our Business Startups Act” (or JOBS Act) was promoted by President Barack Obama as a way to assist small businesses in their efforts to raise money through IPOs (stock market launches).
The same legislation, though, made it possible for larger companies (those earning less than $1 billion a year) to dodge reporting details about executive compensation and financial histories to the Securities and Exchange Commission.
Companies also can delay disclosing their plans to go public until just before the big day, under the JOBS Act.
“In effect, it means the press and potential investors have less time to comb through financial information, as well as less information to examine,” wrote James Temple in the San Francisco Chronicle.
The abuse of the law should not come as a surprise. At the time that the JOBS Act passed through Congress, Democratic Senator Carl Levin of Michigan warned, “We are about to embark upon the most sweeping deregulatory effort and assault on investor protection in decades.… It will allow vast new opportunities for fraud and abuse in capital markets.”
Meanwhile, the new law, which was adopted in April, hasn’t done much to boost the numbers for IPOs, according to Ernst & Young. This year, 130 companies raised $45 billion on U.S. exchanges, compared to 124 businesses and $40 billion in 2011.
The JOBS Act was the “brainchild” of the President’s Council on Jobs and Competitiveness, which is headed by General Electric CEO Jeffrey Immelt and, at the time the JOBS Act was proposed, consisted of 18 corporate CEOs and investment executives, two academics and two labor leaders.
If you’ve watched the Olympics on NBC you’ve probably seen ads promoting a war-o-tainment reality show cohosted by retired U.S. General Wesley Clark, co-starring Todd Palin, and with no apparent role for reality.
The ads brag about the use of real bullets in a way that promoters of the new Batman movie probably wouldn’t try. But the chances that any of the celebrities engaged in “war competition” on NBC’s “Stars Earn Stripes” will be shot and killed is essentially what it was for John Wayne, as he promoted war while dodging it (even if nuclear weapons testing got him in the end).
RootsAction.org and Just Foreign Policy have set up a website at StarsEarnStripes.org to push NBC to show the real cost of war, and to help get them started.
“Stars Earn Stripes” is being produced by the TV “genius” behind Donald Trump’s “Apprentice” and “Sarah Palin’s Alaska.” (Husband Todd Palin is a “Stars Earn Stripes” co-star.) NBC is promoting the show during its Summer Olympics telecast as the next big sporting event. But the sport it’s exhibiting is war.
On “Stars Earn Stripes,” celebrities will pair-up with members of the U.S. military to compete at war-like tasks, including “long-range weapons fire.” Only there won’t be any of the killing or dying.
Our wars kill huge numbers of people, primarily civilians, and often children and the elderly. NBC is not showing this reality on its war-o-tainment show any more than on its news programs. Other nations’ media show the face of war, giving people a very different view of war-making.
NBC news programs have repeatedly used retired generals, pretending independence but getting their pro-war talking points from the Pentagon. See New York Times: Behind TV Analysts, Pentagon’s Hidden Hand and Glenn Greenwald: The Pulizer-Winning Investigation That Dare Not Be Uttered on TV.
In the United States, our tax dollars are spent by the billions each year marketing the idea that war is a sport and associating the military with sporting events. Media companies like NBC are complicit in the propaganda. While 57% of federal discretionary spending goes to the military, weapons makers can’t seem to get enough of our tax dollars. In the spirit of transferring veterans’ care to the realm of private charity, “Stars Earn Stripes” will give prize money each week to “military-based charities” in order to “send a message.”
One of NBC’s corporate parents, General Electric, takes war very seriously, but not as human tragedy — rather, as financial profit. (GE is a big weapons manufacturer.) A retired general hosting a war-o-tainment show is another step in the normalization of permanent war. And consider for a moment who that retired general is. During the 1999 bombing of Yugoslavia commanded by Gen. Wesley Clark, civilians and a TV station were bombed, while cluster bombs and depleted uranium were used. Had Clark done these things for another nation, NBC would probably favor his prosecution and certainly not employ him. See Democracy Now! Confronts Wesley Clark Over His Bombing Of Civilians.
StarsEarnStripes.org is asking NBC to stop treating war as a sport, and to air an in-depth segment showing the reality of civilian victims of recent U.S. wars, on any program, any time in the coming months. We’ve provided some resources to help NBC research and show the reality of war, at http://StarsEarnStripes.org