Economic Self Interest

I often have CNBC-TV on in the mornings as I shave, shower and dress for the day. I get the sense of the current economic temper and where activity is headed. Will the stock markets be up or down today, and by what margin? Are commodities spiking in value or bidding down? Where’s the price of oil today? Which stocks are moving briskly? Why?

All this data gives me a sense of activity. Not ordered or neat; just eddies of temperament that might suggest the mood of the country.

Occasionally the hosts speak their opinion, or they schedule a guest interview to get a different view. Often political themes are used, normally in the vein that government regulation is strangling entrepreneurial interests and initiative, raising risk to capital investments by individuals, and asserting that corporations are being treated unfairly. This theme is a familiar one. Political parties are mentioned frequently and government policy frowned upon. Republicans are the champions of the investor and Democrats are the enemy power to be vanquished. From there the “conversation” descends to personalities and name calling. And this mood changes from year to year depending on which party is in power at the time.

When did we get this out of sorts? When did we insist on laying blame or ulterior motives on people who disagree with us? Why has commerce become the center of such hostile bare politics? Is this a passing fad or here to stay?

Methinks we should do some fact checking and debunking. Just to keep the “conversation” honest and productive.

First, neither political party is the champion of corporations or the economy. In fact, the economy is not all about corporations.  It is about consumers. Really! No consumers, no economy, or corporations for that matter.

Second, consumers pay the bill for goods, production of goods and the distortions those activities have on other important areas of our national life: resource acquisition for production needs, pollution of soil, water and air caused by resource acquisition and product production; and more.

Third, consumer goods have to be moved to market and they are via publically funded roads, bridges and distribution channels. The corporations don’t pay for these directly. Consumers do; because they are also tax payers.

Fourth, educated workers and consumers, talent pools of skilled employees, all are needed by the producers of goods but that education and skill development is paid by individual tax payers and students. It is publically and personally funded. The corporations don’t pay for this directly.

Fifth, consumers as taxpayers pay for national defense to preserve our way of life and safety so that producers of goods can prosper and function in a stable environment.

Sixth, consumers and taxpayers provide regulatory apparatus so consumers are protected from greed and manipulation by the producers of goods. These regulations also protect  natural resources on which production of goods depend.

Seventh, consumers and taxpayers provide the monetary and banking system that facilitates the free flow of goods, services and medium of exchange. All are needed to support commerce.

Eighth, consumers as taxpayers pay for the formation and operation of the criminal justice system and judiciary to safeguard everyone’s rights.

Ninth, consumers as taxpayers pay for the legislative governance of the nation, state and municipalities which create and implement the laws that bring order to our community life and protect each others rights.

Tenth, consumers/taxpayers vote elected officials into office to operate all of the above.

Corporations do not vote. They do pay a host of taxes on property and income for services rendered to them. But they get a lot in return. And they seek more.

In fact, corporations seek the following by lobbying and donating to political campaigns:

·         Change tax laws so income earned overseas using American resources is not taxed

       ·         Change regulations so restrictions are removed; quality of air/water/soil is compromised
              so corporate profits are not pinched (think EPA and a host of other environmental policies)

·        Change regulations so competitive pressures are moderated; they make more profit (think automotive, chemical and aeronautical standards to name just a few)

·        Form international trading agreements among governments so “free trade” is made possible; it isn’t actually free, but it is made much easier via government policy (think NAFTA, Most Favored Nation status, etc.)

·       Government research and development grants to expand technology and science that can be used to create new goods and profit sources (think NASA, National Institutes of Health, National Science Foundation Grants, etc.)

·        Government contracts for goods and services which directly benefit the corporations so employed (think Halliburton)

·        Lobby government support of specific industries for future business activity and profit (think military/industrial business interests)

·        Urge formation of tax incentives for new investment, new training, new hires

·        Do we really need to continue this list?

There is a reason why General Electric earned $14 billion of net income in 2010 yet paid no federal income tax. Think about that. Let it sink in!

Corporations should be equal partners in the business of supporting the nation. But they have insisted on gaining an advantage over all of us. They are not “natural persons” under the law of the land, but the Supreme Court recently allowed them to behave as such with respect to campaign contributions. In effect they are allowed to countermand campaign finance reform and they are in the process of buying favor where they can. Right now the Republicans are the beneficiaries of this largesse. At another time it will be the Democrats to be sure.

But the main issue is this: corporations have a lot of freedom and influence in the halls of authority at this very moment. And it is out of all proportion to their needs and overall fairness. A new balance is needed.  When will this occur?

Corporations seem to believe that being in bed with Republicans will gain them legislative advantage in regulations, taxes and trade freedom. For the short term this may be true but the pendulum will swing the other direction eventually and the ‘payback’ for their self-interest may not be pleasant.

Individual taxpayers are the bottom line payers of taxes. They bear the cost of regulation as well. They pay for the overhead of our government. They pay in blood, sweat and tears for the cost of freedom as well. Corporations don’t. They get paid for their travails.

We must we able and willing to see these things clearly and with constrained emotions. We are all in this nation’s business together. Playing favorites among the parties is unseemly and contrary to the sense of fair play we Americans hold dear.

Corporations: your citizenship is in doubt! Wake up and do the right thing. Republicans: you are next in the wake up line. Take heed.

Stop the foolishness now. Let us all work together to solve national needs and problems.

October 13, 2011