The following is an excellent excerpt from the book “THE CRASH OF 2016:The Plot to Destroy America—and What We Can Do To Stop It” by Thom Hartmann from Chapter 6 titled “Madness” on page 96 and I quote: “Monopolies Return – Under the watch of the Royalists, the Reagan administration was philosophically opposed to the government breaking up companies. Over the next few decades, the monopolies of the Gilded Age returned.
On Wall Street, the twenty biggest banks own assets equivalent to 84 percent of the nation’s entire GDP. And just twelve of those banks own 70 percent of all the banking assets. That means our entire banking system relies on just a few whales that must be saved at all costs from going belly up, or else the entire system goes belly up.
And consider our food industry. According to Tom Philpot at Mother Jones magazine, agriculture oligopolies exist from farm to shelf. Just four companies control 90 percent of the global grain trade. Just three companies control 70 percent of the beef industry. And just four companies control 58 percent of the pork and chicken industry.
On the retail side, Wal-Mart controls a quarter of the entire US grocery market. And just four companies produce 75 percent of our breakfast cereal, 75 percent of out snack foods, 60 percent of our cookies, and half of all the ice cream sold in supermarkets around the nation.
And then there’s the health insurance market. Just four health insurance companies—UnitedHealth Group, WellPoint, Aetna, and Humana—control three-quarters of the entire health insurance market. And as a 2007 study by the group Health Care for America Now uncovered, in thirty-eight states, just two insurers controlled 57 percent of the market. In fifteen states, one insurer controlled 60 percent of the market.
Since there’s no functional competition in such a market, prices continue to get higher and higher while the profits for these whales skyrocket, too.
In the cellular phone market, just four companies—AT&T Mobile, VerizonWireless, T-Mobile, and Sprint Nextel—control 89 percent of the market. And in the Internet market, just a handful of corporations—AT&T, Comcast, Time Warner, and Verizon—control more than half of the market.
From newspapers to television, radio to movies, monopolies dominate the markets.
If we were to give the Internet oligopolies the same treatment Richard Nixon gave AT&T in the 1970s, then maybe we Americans would have the same superfast Internet speeds and supercheap rates enjoyed by most of the rest of the developed world. For example, South Koreans get Internet speeds two hundred times faster than what most Americans get, and pay only $27 a month for their service. Professor Susan P. Crawford, author of Captive Audience: the Telecom Industry and Monopoly Power in the New Gilded Age and former board member of ICANN, told me that while the average American consumer pays around $90 a month for a cell phone with a data plan, the European average is just $19 (and the coverage is better and the data is both faster and unlimited).
Rising health-care, food, and energy costs can all be traced back to this problem of monopoly in America.
It’s a Second Gilded Age, and it’s headed for another Monopoly endgame. And this time it will be worse than before.
We are no longer dealing with the Robber Barons, who savaged working people through the last half of the nineteenth century. And we aren’t talking about the Economic Royalists of FDR’s day, who plotted a coup. This is a new form of Royalist.
As Pulitzer Prize-winning journalist Chris Hedges told me, “The Robber Barons, however feudal they were, ran their enterprises within the nation-state itself. Now, we have corporate entities which seek the lowest possible wage around the world, in essence the prison labor in China, and are forcing the rest of the planet’s workforce to compete with this slave labor.”
He went on describing the Royalists at work today. “It’s similar to the age of the Robber Barons but in fact worse because there is no loyalty to the nation-state. The corporations are actually hollowing the country out from the inside. . . We’re creating a kind of neofeudalism.”
Global Psychopaths – In his book The Collapse of Globalism, author John Ralston Saul lays out the primary driving ideology of globalism, which was unleashed on the world on a scale not previously seen before with the creation of GATT, the WTO, and NAFTA.
“The force of Globalism,” Saul writes, “through trade agreements, deregulation and privatization, would seriously weaken the ability of nation-states to act with any political independence.”
For most of American history, businesses—for-profit and nonprofit—had mission statements that were broader than simply serving the interests of the shareholders and CEOs, and referred instead to the long-term interest of the company, its workers, and its customers. And perhaps most important, the long-term interest of the nation it belonged to. After all, if your nation goes to hell, so does your market—a collapse isn’t good for business.
But globalism changed the game. Globalism is the breaking down of economic borders. What globalism does is peel away those government protections of national industries, and let global Economic Royalists dive in and feast on the goods. Once government is out of the way, Saul explains, the transnational corporations rise to power. “Richer than a majority of nation-states on the planet, free of the geographical and social obligations of these old states, beyond the embarrassing demands of nationalism, freed in fact from the emotional, immeasurable demands of the citizenry, the transnational would be able to organize world affairs in a more rational, efficient manner.”
Without the “demands of nationalism,” corporations can skate by without hiring American workers, they can dodge taxes, and they can spew toxic chemicals all over our commons. Instead of nationalism, corporations are bound by efficiency, which in turn yields higher profits. And it’s far more efficient and profitable to hire low-wage workers in India, to spend millions lobbying to avoid billions in taxes, and to skirt regulations that keep people working on oil rigs alive and prevent ecological disasters.
Clinton opened the door to globalism, but George W. Bush oversaw the looting of America by global psychopaths.
As a result of so-called free trade, every single month since 2001, our nation has shed, on average, fifty thousand manufacturing jobs. And in that same time period, over fifty thousand manufacturing plants—like the ones that used to line the rail tracks up and down the East Coast—have been permanently shut down.
At a blistering pace, American industries are being sold to the highest foreign bidders, be they Chinese business tycoons, Saudi prices, or Russian oligarchs. In the time it takes you to read just one page in this book, $240,000 worth of American industry is sold off to a foreign interest.
In the past thirty years, foreign investors bought roughly $3 trillion worth of American industry. That means $3 trillion worth of assets that were generating profits for America, hiring American workers, and making things with a “Made in America” stamp on them are now in the possession of foreign nations, so if they continue to operate, all their profits go overseas. It’s like a giant liquidation sale in a nation that’s on the verge of going out of business.
To highlight just how in peril the United States’ economic dominance in the twenty-first century is, consider this trend: In the first decade of this new century, some of the biggest transnational corporations in America—corporations that employ one-fifth of all American workers—have been shipping jobs away en masse. Since 2000, these transnationals have laid off 2.9 million Americans, and hired 2.4 million foreign workers.
Some of the most well known American companies, from all sectors, are contributing to this trend. Caterpillar, Cisco, Chevron, GE, Intel, Merck, Oracle, Stanley Works, and United Technologies have all outsourced at least 45 percent of their workforce to another country. GE has more than half of its workforce in other countries and yet GE’s CEO, Jeffrey Immelt, was appointed to head President Obama’s Economic Recovery Advisory Board to provide guidance on how to fix our economy.
And this outsourcing of our manufacturing base is creating enormous trade deficits.
For example, consider South Korea, where our automobile trade deficit alone is a whopping $10.8 billion. In 2009, South Korea exported $11.72 billion worth of cars into the US economy. We, on the other hand, were only allowed to export about $492 million worth of cars into theirs.
Or India, where in 2010 we ran up a $10.3 billion trade deficit.
Or China, where our 2010 trade deficit is a mind-boggling $273 billion—the largest trade deficit between two nations ever recorded in the history of the world.
Our trade relationship with China is particularly worrisome. While other nations are just banking off our dumb trade policies promoted by American CEOs who’ve sold their allegiance to Davos-promoted globalism instead of the United States, China is preparing to be the next world superpower.
Loose lips sink ships, but corporations that have developed some of America’s most advanced technologies are more than willing to sell off that technology to the Chinese government if they can just have a little taste of Chinese consumerism.
Leading IT manufacturers and defense industries are blatantly helping to grow the technological capcity of China in return for deeper market penetration and higher profits. In 2020, China will roll out it first full-size commercial airliner built thanks to technology largely developed by Boeing and Airbus.
Of course, American transnational corporations have historically cavorted with nations whose interests were similarly opposed to those of the United States—morally at least. American CEOs made deals with Mahmoud Ahmadinejad in Iran—as was the case with foreign subsidiaries of Koch Industries, America’s second-largest private corporation. Other corporate interests worked with Nazi Germany and apartheid South Africa. They signed contracts with dictators like Mu’ammar Gadhafi in Libya (even while our military was bombing Gadhafi).
Trade expert and former Commerce Department official in the Clinton White House Patrick Mulloy wrote in a 2006 report by the United States-China Economic and Security Review Commission, “The interests of the U.S.-based multinational corporations, which have done so much to influence our current policies toward China, are often not aligned with the broader interest of our nation.”
Again, with nationalism off the table, it’s only about profits at whatever cost. Mulloy concludes, “Focused on ‘shareholder value’. . . [corporations] are not charged to consider the larger impact of their decisions on the American economy and workers, and the impetus they give to China’s growing international, political, and military strength.”
Emmon Fingleton, an economist, best-selling author, and former editor at Forbes, who predicted both the Japanese stock market crash in 1987 as well as the tech-bubble crash in 2000, described this wild American sell-off by saying, “For just a few years of profits, America is giving away a technological inheritance that took generations to accumulate. . . the big gainers are . . just a few thousand top corporate executives,” the guys hanging out at Davos, “who reap huge returns via bonuses and stock options,”
Thanks to them, our nation’s current account deficit, primarily our trade imbalance, in 2006 was 7 percent of GDP. That’s the highest peacetime current account deficit ever recorded—second only to Italy in 1924, a year before Benito Mussolini anointed himself dictator of fascist Italy.
There’s a lot of money to be made seeking out cheaper and cheaper labor markets. So wealth was growing exponentially, which made both political parties buy into this new global paradigm.
Columnist Chrystia Freeland nailed this mind-set perfectly in her 2011 article “The Rise of the New Global Elite,” which ran in The Atlantic magazine. She reported that one influential American hedge fund manager argued that it didn’t matter if the US economy was in peril, because “if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.”
And yet, millions were being uprooted around the world as a result of these new globalized markets. Subsistence farmers in South America and India were shut out of trade, put out of business by massive transnational agribusiness, and forced into the slums.
Meanwhile, entire communities near Detroit and Camden that once buzzed with manufacturing plants and middle-class trappings were also leveled by the forces of globalism.”
(THE REPUBLICAN PARTY, ALONG WITH SOME HELP FROM FORMER PRESIDENT BILL CLINTON, HAVE BEEN SHIPPING JOBS TO THE THIRD-WORLD ASIAN COUNTRIES. FOREIGN INVESTORS HAVE BOUGHT UP $3 TRILLION OF OUR INDUSTRIES in the LAST 30 YEARS, WHILE, AT THE SAE TIME, OUR INDUSTRIES ARE SHIPPING JOBS OVERSEAS. THE FOREIGN PEOPLE BUYING THEM ARE CHINESE BUSINESS TYCOONS, SAUDI PRINCES OR RUSSIAN OLIGARCHS. THESE EXCEPTIONALLY WEALTHY BUSINESSMEN HAVE A CHEAP LABOR MARKET WHICH MAKES IT REALLY APPETIZING FOR THE BILLIONAIRES TO GO AFTER THIS CHEAP LABOR MARKET. THEY ARE JUST ADDING UP THE ADDITIONAL DOLLARS THEY ARE GOING TO HAVE IN THEIR BANK ACOCUNTS BY ELIMINATING OUR MIDDLE CLASS AND UNONS. THIS IS NOT JUST TAKING PLACE IN THE ASIATIC COUNTRIES BUT EUROPE AS WELL, SUCH AS THE PIIGS COUNTRIES (PORTUGAL, IRELAND, ITALY, GREECE and SPAIN), THIS MASTER PLAN, WHICH IS BEING DEVISED OVER IN DAVOS, SWITZERLAND, IS BEING ENGINEERED BY THE TRANSNATIONAL CORPORATIONS. THE NAFTA, GATT AND WTO TRADE AGREEMENTS HAVE ALL BEEN LOBBIED AGAINST BY THE WORKING CLASS AND I BELIEVE THAT’S WHY WE’RE HAVING THESE CIVIL WARS ALL OVER THE WORLD BECAUSE IT’S EXACTLY LIKE THE BOOK WE READ TITLED “PLUTOCRATS: THE RISE OF THE NEW GLOBAL SUPER-RICH and THE FALL OF EVERYONE ELSE” BY CHRYSTIA FREELAND, CAUSING THE WIDENING GAPS, WHICH ARE GETTING WORSE AND WORSE EVERY YEAR, CAUSING THIS PRESSURE COOKER EFFECT TO BLOW UP IN 2008, WHEN GEORGE W BUSH WAS PRESIDENT AND POSSIBLY AGAIN IN 2016 BECAUSE, WHILE PRESIDENT OBAMA DID SLOW THE PACE DOWN IN THE CATASTROPHE, HE DIDN’T DO IT ANYWHERE AS FAST AS PRESIDENT FRANKLIN ROOSEVELT DID, WHEN HE CHALLENGED THE ROYALISTS AND TOLD THEM WHEN HE CAME DOWN ON THEM, “THIS IS OUTRIGHT WAR.” BECAUSE THE 2008 CRASH REALLY HASN’T SOLVED ANY PROBLEMS IN the GROWING, TOXIC DERIVATIVE MARKET, WHICH IS CONSIDERED AS A WORTHLESS CURRENCY. NOW YOU HAVE THE BITOCIN, WHICH CHINA AND RUSSIA HAVE QUESTIONED THE BITCOIN, AFTER THE MT. GOX EXCHANGE IN JAPAN WENT BANKRUPT. UNTIL WE ADDRESS THE CURRENCY WAR, WHICH IS REALLY THE PROBLEM AND ASK—WHAT IS A REAL ASSET?, NOTHING WILL CHANGE.
LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AARP Members