Wednesday, December 03, 2008

Corruption...Collusion

There are some sad sights to be seen occasionally on the TV "nature shows," hapless zebras torn apart by hyenas or full-grown fish snatched from the water by powerful birds of prey – the weaker manipulated and killed by the stronger. The game is survival and it's nature's way, but it's unbearably ugly. The winner gains only existence, nothing more, nothing less.

There are some sad sights to be seen now in this country in the arena of politics. In this area, the weaker has almost always been neutralized by the stronger, never mind who or what is right. One would hope that the major motivation occasioning the fights between individuals and/or parties is the preserving (survival) of the nation. More often, they seem to primarily concern the survival of the individual and/or the party. In other words, the winner, instead of merely gaining existence, whether for self or party, gains whatever level of existence is desired, whether premised on money, fame, power, or whatever.

There are some sad sights to be seen now in this country in the arena of commerce. They reflect the same elements as those of politics – mainly those concerning or driving self-interest. The recent failures of the banks and mortgage institutions, eventuating unhappily in failures of enterprises all across the economic spectrum, are the result of self-interest carried to the penultimate degree, which degree always involves the stronger few impacting adversely the weaker multitudes. Thus, the few heavily compensated greed-addicts at the top secure their filthy lucre on the backs of those who toil.

There are some sad sights to be seen now in this country in the world of labor unions, though their power has greatly diminished to the point that they now represent only some 12% or so of workers. The bosses at the top have made an industry of...well, being at the top. There was a time when these people served a useful purpose in securing living-wages and other benefits but brainwashed the rank-and-file into believing that the worker deserved as much as the entrepreneur who whether by intelligence, inheritance, risk-taking, or just plain good luck "made it." A good example was seen in the late 60s when the United Transportation Union was formed as a merger of other rail unions with one result being the installing of some 23 or so vice presidents, if memory serves, complete with offices, staffs, expense accounts, etc. The union membership was only 230,000 at that time. If Walmart today had the same ratio (1:1,000), it would need 1,900 vice presidents for its number of employees, 1,900,000 in 2006. Weird!

A blue whale can eat up to four tons of krill (shrimp-like invertebrates) a day just to exist. A crooked CEO can work a deal gaining him tens of millions of dollars a year, while the assembly-line worker or fast-food laborer makes chump change by comparison, but the CEO could still make a fair salary providing for luxuries in addition to existence on perhaps only ten times the wages earned by the drones. Use this analogy in conjunction with politicians, business folks and union leaders. That, too, is ugly.

As bad as these elements are singly, when in collusion they are deadly. When entrepreneurs (lobbyists) combine with politicians, they deliver a double-whammy to the little people. How did the CEOs manage to feather their nests and establish their golden parachutes while bringing down their companies and throwing thousands out of work and/or literally stealing their homes? First, they got the proper laws passed. Enter, for instance, Fannie Mae and Freddie Mac, creatures of both private and public enterprise. Then, the governmental watchdogs, known as the Congress-people, look the other way. The regulators can be straight as a stick, as has been shown for a number of years, but if their hands are tied by a Congress either fast asleep, on the take, or just plain dumb...gangbusters!

Add the unions to the mixture and the collusion is even dirtier, although union members actually belong to the little people. They get cheated by their own outfits, although they also provide the manpower and money to keep the right folks in power in order to advance their agendas. They've helped the entrepreneurs in this country lose especially their manufacturing bases to other countries...priced both sides (management & labor) right out of the market. Result: the loss of a middle class.

Some 20 years ago, this writer, as a Norfolk Southern Railroad employee, noticed the railroad roadbed. The trains had cars of American rolled-steel in their consists, but the 132-pound rail (132 pounds per linear foot) on which the trains were operated came from Japan. Japan, which is the world’s second largest economy but lacks natural resources, imports all of its iron ore, with 60% coming from Brazil. Get the picture. In the U.S., there were all the iron ore, coal and everything else to manufacture rail, but the Japanese could import every ton of iron ore it used from all around the globe, produce product, pay shipping, and still undersell the American steel mills. American steel-towns have been dying since the 60s, taking the middle class with them.

Two things are necessary to the existence of both a democracy and a capitalistic system, proven by this country to be the best government model and best economic model, respectively, in the world: integrity and an educated population. The former is sadly lacking in this country now and the result of this lack is obvious in the current recession. Former Fannie Mae CEO Frank Raines, for instance, was hounded out of his office account of an accounting scandal, otherwise known as "cooking the books," but not until he had accumulated scores of millions of dollars. He was both a private and governmental executive – the perfect example of collusion...the whale (greedy bureaucrats/politicians/entrepreneurs/unionists) swallowing the krill (the little people).

And so it goes.

Jim Clark

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