Americans Are Distrustful Of ‘Big Business': Is Change In The Air?

By @FrederickReese |
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    This is a Monday, Feb. 27, 2012 file photo of a pedestrian passes a branch of HSBC bank in London. (AP Photo/Kirsty Wigglesworth, File)

    This is a Monday, Feb. 27, 2012 file photo of a pedestrian passes a branch of HSBC bank in London. (AP Photo/Kirsty Wigglesworth, File)


    (MintPress) – According to a Jan. 17 Gallup poll, only 35 percent of Americans are satisfied with corporations, a rebound from 2011 of 6 percent. The vast majority of Americans feel that corporate interest, the size of corporations and corporations’ control over the political process is out of hand. Of those questioned in this poll, most responded that they would like to see corporations have less influence.

    This is compared to the 36 percent of all Americans who feel that the federal government is not too big and too powerful.

    The breakdown of these numbers fell along party lines. Among Democrats, 70 percent are displeased with the corporations. Among Republicans, only 45 percent feel likewise.  Also, 88 percent of Republicans feel that the government is too big and powerful; only 42 percent of Democrats agree.

    Independents feel that both corporations and the federal government are too big, with 62 percent agreeing the the federal government is bloated and that corporate interests have too much sway in policy-making.

    While this can be construed as a “pick your poison” style of analysis, this sharp polarization has strong implications for the 2014 midterm elections and the 2016 general elections. In light of the inevitability of the national health care reforms, the president’s recent announcement of a wide-sweeping gun law reform package, and the Democrats’ refusal to fully abandon “entitlement” spending, the right feels that the federal government has overstepped its bounds. Congress’ approval level is currently at 14 percent.

    However, the left’s distrust of corporations may go deeper than disagreements about political philosophies. For years, corporations such as Enron, WorldCom, Tyco, Royal Dutch Shell, Halliburton, Adelphia and AIG have been exposed for misleading not only their shareholders, but the public as a whole. While public enthusiasm for corporations has never been rampant in modern times (the highest approval rating corporations have received since the statistic was measured was 55 percent in 2002), the public has had to deal with a larger-than-usual amount of “corporations behaving badly.”

    A score of British and American banks — including Barclays, JPMorgan Chase, Citigroup, UBS and Deutsche Bank — were involved in manipulating the London Inter Bank Offered Rate (LIBOR), or the short-term interest rate that is used to reflect the cost of borrowing between banks. This rate, compiled by Thomson Reuters, is the average rate for all banks involved, minus the two extremes. This rate was then used to set the rate on nearly $360 trillion in financial products. These banks attempted to manipulate the rates so that they can gain on positions they have taken on various trades. While the investigations are continuing, Barclay’s has paid more than $453 million to U.S. and U.K. authorities.

    The Hongkong & Shanghai Banking Corporation (HSBC) has paid over $700 million to U.S. authorities and $27.5 million to Mexican authorities in regards to money laundering charges that earned the company a scathing rebuke from the Senate and could have prevented HSBC, if convicted of the charges, from doing business in the U.S.

    Wells Fargo was forced to pay $175 million in a settlement with the Justice Department last July. The bank was accused of forcing high-interest subprime loans on African-American and Latino customers who would have qualified for better rates had they been white. The Justice Department detected this pattern of systematic discrimination from 2004 to 2009. It is felt that the actions of Wells Fargo helped to annihilate an entire generation of economic growth in the black community.

    Wells Fargo is further accused of abandoning and not caring for the homes they foreclosed on in minority neighborhoods with the same diligence they practice in white neighborhoods.

    In 2008, the Bush administration agreed to a financial recovery plan for banks at risk of collapse in light of the subprime mortgage scandal. The Troubled Asset Relief Program, once rejected in the House, originally offered $700 billion toward the purchase of the “troubled” subprime mortgages in order to stabilize the major banks from collapse, which was feared to undermine the American economy. In implementation, however, the banks — without oversight of fund’s use by the federal government — saw this as money to do with as they felt, which included executive raises, retreats and private jets and investment into corporate mergers and acquisitions. The money invested to AIG is considered lost, and the government’s best projection of fund recapture suggests a maximum return of 75 cents on every dollar invested.

    Beyond the banking world, Wal-Mart’s and the retail industry’s aggressive anti-union posturing and reliance on oversea-produced merchandise, recent posturing that the Hostess Brands closing was done in the interest of venture capital and the general disdain for the amount of corporate money that goes into political campaigns have soured Americans to big business.

     

    The realities of greed

    All of this is not a new idea. A Feb. 6, 1978 article from the Washington, Penn. Observer-Reporter states that “While most people surveyed opposed excessive government regulation of business and tinkering with the profit motive, 68 percent said government regulation is needed to guarantee safe working conditions. The survey … also shows that 58 percent of the respondents believe government regulation is the best way to insure safe products.”

    An Aug. 31, 1975 article from the Sarasota Herald-Tribune reads, “One third of the American people believe the capitalist system has peaked and over half think both major political parties put big business before the average voter …”

    Not much has changed. Many still feel that capitalism is a broken system. Dr. Heather Gautney is the assistant professor of sociology at Fordham University. She has written books and articles on a variety of social movements, including the Global Justice Movement, the anti-war movement and the World Social Forum. In discussion with MintPress, Gautney shared,

    “The disapproval rating of corporate power by the majority of Americans has immediate origins in the Great Recession and collapse of the housing industry — which left large numbers of middle class people without jobs and in foreclosure, their hard-earned money squandered through risky speculative behavior on Wall Street.

    “Many Americans believe that corporations — especially Wall Street banks — acted recklessly and created a man-made disaster that cost many people house and home. Americans are also angry that these same banks were given massive bailouts, that in turn, resulted in major budget cuts, while corporate CEOs maintain high pay levels and bonuses.

    “Notwithstanding the recent tax increase on those who make over $400,000 per year, debates over the fiscal cliff remain focused on cutting aid to middle- and low-income people (cutting Social Security and Medicaid/Medicare), rather than finding serious ways to tax corporations and the wealthy, and have them pay their fair share.”

    She continued, “There is also a general consternation with the fact that although corporations acted in a highly irresponsible manner with regard to subprime — they remain under-regulated. Not one of the corporations that was responsible for the housing crisis has been found guilty of a crime.

    “I can go to jail for walking into a store and stealing a candy bar, but if I swindle millions of people out of house and home, I get a bailout. That’s how people see it  — it’s not fair.

    “Add to that the recent events around HSBC, and the dice appear to be pretty loaded in favor of corporations.I think Americans want corporations and their leaders to be bound by the same rules of justice and accountability as the rest of us. The current system violates Americans’ sense of fairness.”

     

    Occupy movement

    Gautney went on to say, “These trends do support movements like Occupy Wall Street, which should be understood as a massive public outcry against social and political inequality.

    “Occupy Wall Street raised awareness of the role of U.S. corporations in advancing the housing crisis and recession, but also focused public attention on the obscenely high wages that many corporate leaders enjoy and their inordinate share of the nation’s wealth,” she said.

    “OWS spoke to the masses of unemployed and hard-working Americans with declining or stagnant wages. It spoke to those with increasing levels of personal debt, due to unemployment, the housing bubble, the rising costs of college tuition and so on. Defending workers against attacks on collective bargaining was inextricably linked to the project of OWS: iI is well known that unionized workers enjoy better wages, benefits and rights than those who must negotiate pay and working conditions on their own.”

    Many have looked at the Occupy movement as the American public’s response to the unfairness of the capitalist system. Focused on fighting social and economic injustice, this centerless, cell-based organization has committed itself to “levelling the playing field” in regards to a fairer distribution of economic wealth and political influence.

    In the United States, the bottom half of all households hold only 1.1 percent of the national wealth, a drop from a high of 3.6 percent in 1995. The wealthiest 1 percent of the population controls 34.5 percent of the national wealth. The mean (or average) household wealth in this country in 2010 is $498,800, but, the median (or, the demarcation that separates the bottom 50 percent from the top 50 percent) household wealth was only $77,300. This suggests that the nation’s wealth is unfairly concentrated among a very small population.

    Capitalism works on a basic principle, known as the profit motive. Formulated by Adam Smith, the motive suggests that if humans are rational and self-interested, in order to invest in the growth of society, they must profit from the endeavor. Otherwise, they would just reserve energy and wait for an opportunity that serves their interests. So, the industrialist that invests toward improving the productivity of the nation, according to the profit motive, did so only because he saw the opportunity for personal profit in the endeavor.

    While this may or may not be true, it invites a host of problems. In any economic system, there is a scarcity of resources (that is, a limit to what is made, a limit to the financial value of the market, etc.). Because of this, if someone takes more than his share, it leaves less for everyone else. If someone was to buy two houses, for example, it will mean that someone else will have to do without a house. In a laissez-faire system (in which the government has no control over the markets), a person is free to produce more and consume more. This, however, compromises everyone else in the society.

    John Dalberg-Acton, the first Baron Acton, once wrote, “Power tends to corrupt, and absolute power corrupts absolutely.  Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority.”

    What this means is that — given the opportunity — a person will succumb to personal wants. It takes extraordinary conviction and want to put someone else before yourself, but our economic system assumes that such capabilities are common. In order for capitalism to work, producers must be able to show control in their relationship with the consumer, treat those that depend on them with compassion, freely contribute to the health of the society and avoid the lure to change the rules to suit them.

     

    Big companies

    Occupy, through protests and through programs — such as the National Bank Transfer Day, Occupy Our Homes, Occupy University and Shut Down the Corporations (which was done in protest of the American Legislative Exchange Council) — has brought the issue of wealth disparity and the inequalities of the system to the forefront.

    Jim Thompson is the vice president of business development for JMJ Phillip. Thompson told MintPress that “In the past, everyone wanted to work for the biggest companies, do business with the largest banks or even have unwavering brand loyalty for a global retail company.

    “As business models change and small businesses have a stronger foothold, people are starting to see more value in working with the smaller companies that did not have a chance at getting a bailout, as the financial crisis left everyone with a chip on their shoulder.

    “If you look at many of the big box retailers, where people were all excited for the low costs and selection at one point, have turned the tides and want to see more stuff sourced in America, with higher paying jobs and better customer service. We continue to see this trend developing and growing with more people every day starting to see you do not have to do business with the biggest to get the highest value, integrity or service.”

    The system may be changing. Chuck Underwood is the host of PBS’s “America’s Generations with Chuck Underwood” and is a co-creator of the academic field of generational study. In conversation with MintPress, Underwood explains his take on the situation, “In the late 1980s, American leadership – across all of our nation’s major and minor institutions – was handed down from the retiring G.I. Generation to the Silent Generation, whose generational core values led America through the 1990s and 2000s. And much more specifically, the generational core values of the White Silent Generation Male.

    “Because of the times and teachings these men had absorbed during their all-important formative years – the 1930s to the early 1960s – they proved to be brilliant in the so-called helping professions (educators, health care practitioners, accountants, attorneys, architects, engineers, etc.) and absolutely abysmal as leaders. During their generation’s leadership era, they proved to be uniquely vulnerable to greed and to the corruption that inevitably follows,” he said.

    “In corporate America, their leadership presided over the slaughter of the Great American Middle, which had flourished under the leadership of the G.I. Generation, with its very different core values.

    “The White Silent Male leadership era also saw executive salaries skyrocket while everyone else was plunged into financial instability and insecurity. And this materialistic generation of white men flaunted all of this unprecedented wealth: the yachts, the mansions, the $6,000 shower curtains.

    “White Silent Male executives broke the law and ruined retirement savings – and lives – of others with their greed:  Ken Lay, Bernie Ebbers, Bernie Madoff and many, many more. And not just at the high-profile national level, but also at the local level,” he continued.

    “The culture that these White Silent Men created throughout American leadership finally crashed the whole damned system with the Great Recession.

    “A few years before it occurred, former SEC Chairman Arthur Levitt told CNN that anyone who thinks the executive greed and corruption is merely the work of ‘a few bad apples’ is ‘sadly mistaken.’ The corrupt mindset had begun, he said, in the late ‘80s and early ‘90s, which is precisely when a new generation was taking its turn at the top and beginning its two-decade-long leadership era.”

     

    The future and beyond

    Underwood also shared his hopes for the future: “In 2013, that leadership handoff that occurs once every roughly 20 years has once again taken place. As of about a year ago, the Baby Boom Generation began its turn at the top. And because of their generation’s unique formative years’ times and teachings, they came of age molding much different core values from those of the White Silent Male. Those core values include ethical behavior, compassion for employees and the ‘little guy,’ hard and honest work, boldness and vision.

    “Not only that, but with the retirement of the Silent Generation, the entire history of American leadership being a good ol’ white boys club comes to an end,” Underwood said. “With the Boomers, leadership is now dual-gender and multi-ethnic, thanks to the Women’s Movement and Civil Rights Movement that their generation’s passion, masses and idealism helped to propel forward. And Boomer females and minorities will add their own unique sensibilities to those of their white men. Leadership, and the governance of leadership, will soon profoundly change.”

    “And unless this generation falls spectacularly on its face in the next two decades, America stands – once again – at the front door of a magnificent era for the masses, not just for the privileged few.

    “And if the Boomers are true to their core values – if they haven’t sold out – they will rebuild America’s trust in big business and return it to the high approval it enjoyed in the post-World War II era, when it was creating the highest quality of life for the masses in the history of modern civilization and thus pouring the foundation that would give Boomer children unprecedented career, income and quality-of-life opportunities.”


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