Lynn Parramore: Capitalism’s Dirty Secret: Corporations Don’t Create Jobs, They Destroy Them

By Lynn Parramore, an AlterNet contributing editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of ‘Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.’ Follow her on Twitter @LynnParramore. Cross posted from Alternet.

Corporations are not working for the 99 percent. But this wasn’t always the case. In a special five-part AlterNet series, William Lazonick, professor at UMass, president of the Academic-Industry Research Network, and a leading expert on the business corporation, along with journalist Ken Jacobson and AlterNet’s Lynn Parramore, will examine the foundations, history and purpose of the corporation to answer this vital question: How can the public take control of the business corporation and make it work for the real economy?

For the last four decades, U.S. corporations have been sinking our economy through the off-shoring of jobs, the squeezing of wages, and a magician’s hat full of bluffs and tricks designed to extort subsidies and sweetheart deals from local and state governments that often result in mass layoffs and empty treasuries.

We keep hearing that corporations would put Americans back to work if they could just get rid of all those pesky encumbrances – things like taxes, safety regulations, and unions. But what happens when we buy that line? The more we let the corporations run wild, the worse things get for the 99 percent, and the scarcer the solid jobs seem to be.

Yet the U.S. Chamber of Commerce wants us to think that corporations – preferably unregulated! – are the patriotic job creators in our economy. They want us to think it so much that in 2009, after the financial crash, they launched a $100 million campaign, which, among other things, draped their Washington, DC building with an enormous banner proclaiming “Jobs: Brought to you by the free market system.”

But the truth is that unfettered corporations are just about the worst thing for creating decent jobs. Here’s a look at why, and where the good jobs really come from.

Taming the Wild Horses

Corporations are kind of like wild horses. They can run you down. Or sweep you around in circles till you’re exhausted. And in today’s world, they’ll surely run off and take your jobs to China or someplace else if you don’t learn how to tame them.

Bad things happen when corporations are unconstrained by strong national policies that force players to think long term, behave decently, and refrain from dumping their short-term costs on the rest of us. They tend to focus single-mindedly on maximizing profits for shareholders at the expense of all else – including jobs. Executives set their sights on a path to short-term boosts in share prices paved with layoffs, wage cuts, and jobs moved overseas, while slashing research and development and investing in the skills of their employees.

The U.S. Department of Commerce found that from 2000 to 2009, U.S. transnational corporations, which employ about 20 percent of all American workers, cut their domestic employment by 2.9 million even as they boosted their overseas workforce by 2.4 million. The result was an enormous loss of jobs nationally, as well as a net loss globally.

In the 1990s, these companies added more jobs at home than abroad. What changed? 1) The rise of India and China, with 37 percent of the world’s population, as hotspots for off-shoring; and 2) the availability of tens of millions of workers in these places, many with college degrees, to do the jobs previously done by American workers.

In India, indigenous companies like TCS, Infosys and Wipro along with transnationals like IBM, HP and Accenture, employ hundreds of thousands of college-educated workers to perform IT services, in large part for American firms. In China, the electronics contract manufacturer Foxconn (headquartered in Taiwan) barely existed a decade ago, but now employs about 1.2 million workers, with Apple its single biggest customer.

And yet Big Business still trumpets itself as the American Job Creator Fairy. Apple has released a report claiming to have created half a million domestic jobs – a highly dubious number which takes credit for everything from the app industry to FedEx delivery jobs (never mind that drivers would be hauling someone else’s gadgets if Apple went out of business). It’s true that in the U.S. managers, engineers and other professionals have found good jobs at Apple. But the non-professional employees are just barely scraping by. A study of the iPod value chain in 2006 calculated that among Apple’s domestic employees, professionals earned around $85,000, not counting stock options, but the retail workers in Apple’s stores earned only $26,000. This is troubling because as Apple has grown in size, most of the employees it has hired in the U.S. work in retail. Are these jobs paths to long-term, stable careers? Quite likely they are not.

While a company like Apple whistles "God Bless America", executives are not going to talk about the job losses induced by off-shoring, nor the horrifically abused foreign workforce that moving jobs to China has produced. And they’re not going to tell us about Apple’s preference for hiring part-time employees who can’t afford to buy health insurance. When such uninsured people have health emergencies, someone has to pay, and the burden falls on the taxpayers.

Here is what Apple executives tell us instead: “We don’t have an obligation to solve America’s problems.”

The Real Deal

Corporate executives have lost the sense that they owe anything to the public. They have forgotten that the 99 percent, as taxpayers, have made huge investments in them. They fight to lower taxes as if all the money “belongs” to the companies. They fight regulations as if the public doesn’t have the right to interfere in their business.

All nonsense.

Despite the anti-government rhetoric from conservative leaders, the truth is that the government, elected by the people, plays a critical role in creating the conditions in which companies can succeed and good jobs can flourish. The government is able to invest in human capital through key services like education. What’s the point of a job if you don’t have an educated worker to fill it? The government also creates job-friendly conditions by investing in infrastructure. How can you get to work if your roads and bridges are falling apart? And it boosts job creation through investing in technology. How could Google create its amazing search engine without state investment in the creation of the Internet? When the government invests in the knowledge infrastructure, businesses can then employ and train people who can, in turn, engage in the kind of organizational learning that leads to that wondrous thing called "innovation."

We learned this once before. After Wall Street financiers ran amok to cause the Great Depression in the 1930s, the government responded by putting in place regulations on banks and corporations, a highly progressive tax system, and a robust social safety net. President Franklin D. Roosevelt created the conditions in which good jobs were possible with programs like the Civilian Conservation Corps and other New Deal initiatives. He focused on the development of highways, railways, airports and parks, investing in the future rather than focusing solely on short-term profits. The GI Bill, rather than leaving graduates with big debts, left them well educated and therefore with a chance of to provide a middle-class life for their families and to retire with dignity.

After victory in World War II, America was able to emerge as the world’s most powerful nation because it had a large middle-class and a strong industrial and technological base. The horses of Big Business were tamed, and they could be harnessed to do useful things for society. Then came the Reagan Revolution and Big Business freed itself from the regulations, unions and taxes that had curbed its worst instincts and it began to shred the nation’s economic and social safety net. The gap in income inequality grew, and jobs were eliminated and outsourced. Long-term investment in innovation and human capital slowed down, while fraud and financial speculation took off.

Today, corporate executives ask for more special treatment and freer rein in calling the shots in our economy, and they threaten to pack their bags if we don’t agree. Some politicians and policy makers respond to this blackmail by saying that we have to create a “friendly business climate” to convince them to stay. But what makes a "friendly business climate"–low wages, minimal taxes and so on — creates a very hostile climate for the 99 percent, which is ultimately bad for everyone – business included. The state of Mississippi and Rick Perry’s Texas, where city and state officials bent over backwards to lure Big Business with subsidies and other perks, are hardly bursting with good jobs.

Many researchers have concluded that tax rates are actually not terribly important to where a company locates. Further, a common rule of thumb for business headquarters location is that quality of life for key personnel is decisive. True, vastly different levels of regulation in the U.S. and China is a problem for which there are no easy answers. But there are real costs to ignoring the environment and keeping workers in a state of misery. If you want job growth, you have to have demand growth: profits and consumption go hand in hand.

That’s why the best way to unleash America’s job-creating potential is to support rights and protections for ordinary people. A climate friendly to the 99 percent is not just fair, it makes the best sense for the economy. We need to remember the complementary roles that government and business have to play in creating well-paid, stable employment opportunities and then ensuring that people can access these opportunities over the course of their careers. To get corporations working for the 99 percent on the job front, we have three major challenges:

1) Education: Young people from low-income groups (especially blacks and Hispanics) need schooling and training to move to good career jobs.

2) Incentives: Corporations must have incentives to retain educated and experienced workers instead of laying them off or off-shoring their jobs. (To do so forces valuable workers into low-skill jobs and wastes their human capital, which was expensive to acquire.)

3) Investment: Executives of financialized corporations who want the government to invest in the knowledge base have to make complementary investments in people that can keep the U.S. economy innovative and generate good jobs. That would mean changing the single-minded focus on boosting company stock prices through buybacks and other financial manipulations that serve the 1 percent but no one else.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Ishmael

    All corporations are evil! Let us be clear their all sorts of corporations — C Corps, S Corps and LLC. Beside that there are sole proprietors and partnerships. Are all of these evil.

    Let’s not get confused, I find that the Chamber of Commerce is a captured entity which only works for the largest corporations. In addition, I do not believe the worker corporations are just working for a few people and there does need to be proper regulation; however, such statements as Corporations are like wild horse or Corporations do not generate jobs really turns me off.

    Who do you think creates jobs — GOVERNMENT! Oh yeah, the Govt might create jobs but it never creates anything of value and it does not do it efficiently. Maybe you should say, “Multinational corporations do not create jobs within the United States.”

    1. Walter Wit Man

      Well, the major distinction between corps and partnerships and sole proprietorship is that corps aren’t personally liable for their actions. They can wrong people, even criminally, and then walk away from the problem without fear of being brought to justice.

      And partnerships and sole proprietorships used to be far more common and the corporation more rare. Their charters started expanding as well.

      So there is a strong case to be made that corporations are indeed uniquely evil.

      1. Ishmael

        Oh, give me a break. Do you know what an MLP is? That stands for Master Limited Partnership and many trade on the NYSE. Do you think because they are limited partnerships they can be more soulful than a corporation. I have been advising people, corporations and partnerships for over 30 years. There were just as many corporations 30 years ago than now. In fact probably in the scope of business, big corporations were more numerous 30 years ago than now. Small business was not that big of a part of the economy back then. At least it did not seem that way.

        Generally, I would say the real problem is breakdown of honesty and ethics through out our country.

        This article and its supporters seem to have an echo of the communist manifesto.

        1. Walter Wit Man

          I am referring to the traditional partnership.

          The limited liability partnerships and other such monsters are simply another form of corporation, but in another name.

          Our fascist masters are great at weaving an obscure legal web to hide their deceit.

          I think you know what I’m getting at. The firm’s owners must retain liability and be personally bound to the community.

        2. patricia

          There’s a book with your name.

          I also hear an echo: “Caringringring for othertherther equalqualsquals comcomcomunismismism”

          Don’t you wonder where they come from?

        3. nonclassical

          “communism or communist manifesto”…

          as opposed to Italian corporate monopoly-collusion known as police state fascism…

        4. Blunt

          O, please, Ishmael, been out on the Pequod too long havencha?!!

          Let’s get this straight, anything or anyone that or who requires a certain mount of concern, thought and remuneration for the social good is a “kommoniss?”

          Gee whiz, have you experienced anything since 1980? Haven’t you heard, the USSR is no more. There is the increasingly swift slide toward “one big corporation” as the leverage artists and the greed ueber alles volk goose-step their way into a brave new Randian world where, just like in those silly “Highlander’ movie, “there can be just one.”

          Shoo fly, Ishmael, don’t bother me.

      2. dirtbagger

        Owners structure their small companies as sub-S corps or limited liability partnerships because most are well aware that one lawsuit – justified or not – could wipe out all of their business and personal assets.

    2. nonclassical

      ..might do you well (government doesn’t do anything efficiently) to compare
      medicare administrative overhead and private insurance profit$=co$t$…

      and you obviously know nothing of comparative healthcare in comparable western democracies around the world..

  2. Jim

    Here here!

    Workers unite! Where are Lenin and Mao when we need them most!

    Ownership is theft!

    Ban all corporations. They are EVIL. They are sociopathic. Our politicians will save us. They are kind-hearted super people!

    1. Walter Wit Man

      Funny how the reflexively fascist have little understanding of history.

      The corporation was very limited in most of U.S. history. Sole proprietorships, partnerships, and coops are far more responsible ways to form business associations.

      So yes indeed, corporations are uniquely evil because we have designed them this way. We force corporations to engage in actions a human would be reluctant to do. Corporations are not personally liable and are not embedded in the community like partnerships, for e.g.

      Getting rid of the corp is not a bad idea. Maybe we should heavily regulate them again and only grant very limited charters.

      1. SidFinster

        Consider the nature of the corporation – because a corporation separates ownership from control, its managers are charged only with generating maximum profit and nothing else.

        If compliance with the the law is more profitable than violating the law, then management’s fiduciary duty is to comply. By the same token, if ignoring or wilfully violating the law will generate more profit than will complying with the law, then management’s duty is to violate the law.

        The same goes for ethical considerations. A corporation acts in a “moral” fashion if and only to the extent that it is more profitable for it to do so.

        This is the direct result of the separation of ownership and control. However, in this regard, the behavior of a corporation is indistinguishable from that of a psychopath.

        The other fundamental fact of corporate law is the treatment of management’s duties of care and loyalty.

        The leeway which the business judgment rule provides in matters related to the duty of care, and the ability of mamangement to use rational ignorance of shareholder to game the duty of loyalty allows the management to operate largely independent of shareholder oversight – provided that management does nothing which would be seen up set the focus on generating profits.

        1. Walter Wit Man

          Great reply.

          And the corporations are shielded from the intentional torts its employees commit, unless ratified by management. Also, executives and managers are getting awesome liability coverage that they didn’t get in the past, like Corzine evidently has. So the management and executives are guaranteed to win. They get the huge salaries and bonuses no matter what, and are pretty much guaranteed to never have to be held accountable for their torts and crimes.

    2. tech98

      It didn’t take long for the cries of COMMUNISM to start from the Fox News crowd. Sneering reactionaries afraid of thinking, like the poor, will always be with us.

  3. abelenkpe

    “We need to remember the complementary roles that government and business have to play in creating well-paid, stable employment opportunities and then ensuring that people can access these opportunities over the course of their careers”

    Here’s an example of how not to do that:

    “Free Labor is much better than cheap labor”

    Digital Domain’s John Textor Brags to Investors about Exploiting Animation Student Labor

    “Classes starting in the education space, what’s interesting is the relationship between the digital studio and the college. Not only is this a first in a number of ways that we’ve talked about, but 30% of the workforce at our digital studio down in Florida, is not only going to be free, with student labor, it’s going to be labor that’s actually paying us for the privilege of working on our films.”

    1. Walter Wit Man

      Amazing. “And in this case, even better, more than 30% of our workforce is going to be paying us for the privilege to work for our studio . . .” He then goes on to say how he thinks this is a good deal for the student worker and how he would have loved this opportunity to lift himself up by his own boot straps. Yeah.

  4. Woodrow Wilson

    Please, stop cross posting from “Alternet”.

    Especially when an article like this is referencing someone like William Lazonick, professor at UMass. He, like the other academics are pretending to be one thing, but in reality are part of the broken system. In the case of UMass, especially so, as retirement benefits alone are equall to some of Golden Parachutes they claim to abhore, only here, on taxpayers dime.

    1. KJ

      “…. on the taxpayers dime” …. let’s see what else is ‘on the taxpayers dime”: social security, K-12 public education, infrastructure, military, fire and police, whatever regulatory structures exist (however effective or patheticP_ … and so on

      So, taking WW’s suggestion further, let’s ban all posts by anyone or, indeed, about anyone who has any direct or indirect link to ‘the taxpayer’s dime’… that way, we can eliminate all taxation which is the surest way to ‘shrink gov’t and then drown it in the bathtub”… and move forward into a glorious world without any gov’t whatsoever… where all persons are free … and the corporations that are the subject of this ‘to be banned post’ can provide the bounty truly needed for utopia… where, by the way, there would be no ‘economic rents’ because those are surely too analogous to ‘taxpayer dimes’ … and not possible in the govt free utopia proceeding from banning this sort of post

  5. F. Beard

    Who needs jobs? What will the 99.9% do when robots do almost all the work?

    What people need is a just “share” in the automation that was created with their own stolen purchasing power – via business borrowing from the counterfeiting cartel, the banking system.

    The implicit social contract was that the so-called “credit-worthy” would be allowed to steal purchasing power from the entire population to create better, cheaper goods and services and better jobs. Well, it appears the jobs won’t be coming but that’s OK. A “share” in the profits will do just as well. Then we can find our own work to do.

    1. Lidia

      What people need is their own share in the land, from which all wealth arises.

      But that would challenge the unjustifiable system of private property.

      FatBeard, perhaps you are familiar with the religious movements in Latin/South America to reunite the land with the people? It came to a bad end, with nuns and priests and archbishops assassinated.

      “When I feed the hungry, they call me a saint. When I ask why they have no food, they call me a Communist.” (Archbishop Helder Camara)

      1. F. Beard

        Who are you calling fat? :)

        In the Old Testament, agricultural land had to be returned every 50 years to the original owners. It could be redeemed earlier according to the number of crops remaining till the end of the 50 years.

        So yeah, the counterfeiting cartel, the banks, drove American families off their farms so restitution and/or restoration is called for.

          1. F. Beard

            The Hebrews were dispossessed too when they picked up the habits of the folks around them such as child sacrifice.

          2. F. Beard

            After Canaan was conquered, the land was distributed to the 12 Tribes of Israel by territory. Within each territory the land was distributed by lot.

    2. Glen

      What will the 99.9% do when robots do almost all the work?

      Most likely fix robots. Damn things break a lot.

      1. SidFinster

        No, robots will fix the robots.

        Outsourced assemblers in China will make the robots that fix the robots that fix the robots that make the robots.

        The code for all this mess will be written in India. Until they find a robot that can do it chaeper.

    3. jonboinAR

      Who needs jobs? What will the 99.9% do when robots do almost all the work?

      What people need is a just “share” in the automation that was created with their own stolen purchasing power – via business borrowing from the counterfeiting cartel, the banking system.

      Nailed it! Mr. Beard.

  6. F. Beard

    In other words, it ALL goes back to the banks – a government backed/enforced usury for counterfeit money cartel.

    Whocouldanode they would cause such trouble?

    ans: Only some of the greatest men in history from Moses to Aristotle to Thomas Jefferson to Thomas Edison to numerous others who warned us.

      1. F. Beard

        Correct you are!

        That’s one reason God doesn’t give us commands until AFTER we show we need them – to not give us ideas!

        Another reason is that some of the crap we pull is something that would never occur to Him before hand!

  7. diptherio

    The corporate structure will remain a tool of the .01-1% until such time as that structure is adjusted in such a way as to give workers and affected community members at least as much sway in corporate decision making as stockholders and COs. Imho, limited liability should only be granted to worker owned and managed businesses (WOMBs). Turn the corporations into democratic co-ops and see how long off-shoring and out-sized executive salaries last.

  8. Damian

    The existence of corporations have nothing to do with lost jobs in the millions – there were corporaitons 50-100 years ago with no effect on offshoring jobs

    the fact is congress, clinton and the federal government of the USA put in place the WTO and GATT treaties that allowed the importation of goods without TARIFFS -which created a cost differential between the chinese et al made goods and those produced by US workers

    they could have limited the WTO to comparable wage countries like western europe to limit the potential comparative advantage of the third world countries

    the transfer prices are all rigged to place profits offshore and untaxed

    without a tariff or a VAT that discriminates – ALL JOBS outside of services locally will be sent offshore in the next ten years

    there is no reason to produce anything in the usa – only R&D will be effective in the USA

    1. jake chase

      Yes, the real problem is a failure of democratic government. We elect one charismatic charlatan after another and think it matters whether he calls himself a Democrat or a Republican. Without exception these “leaders” are all stooges of big money, which today means giant corporations (really their executives) for whose benefit government actually is enormously effective, indeed it works like a charm.

      Those who romanticize corporate leaders of the forties and fifties similarly misunderstand that the game simply shifted once technology made third world outsourcing possible. Before that big unions got wage gains for a relatively small population of screw turners and machine watchers, whose prosperity was achieved largely at the expense of unorganized workers. I recall watching those union parasites bust heads of VietNam war protestors in 1970 and my thought was ‘those guys don’t realize their days of prosperity are numbered’. Perhaps if they had known their real interest was not allied with war mongers and looters, politics in America might have developed differently? But it didn’t.

      1. SidFinster

        Since when were our charlatans charismatic? To me, they come off as 169% pure used car salesman.

        Clinton was the worst, at least to me. The gelatinous bastard was like a continuous ad for “Smilin’ Bill Clinton, the Walking Man’s Friend!” The guy who would say anything, promise anything to get you to sign the papers on that Yugo.

        1. Walter Wit Man

          We are supposed to be impressed by Clinton and Obama precisely because they are such hucksters. We are encouraged to join forces with these hucksters so we can use their huckster abilities to do good. That’s the trick.

          But of course Bill and Barack would never actually use thier skills to help little people.

          Progressives fall for this trick when they pretend to believe Obama’s promises (“Obama said he supports the public option and while it’s been disappointing Obama hasn’t done more to help let’s not attack him and let’s help convince him to fight for us. I know. Let’s write him a letter.”)

        2. jake chase

          Sid, you obviously have higher standards. But it is amazing the number of otherwise intelligent people who have voted for these clowns and continue to defend them. Believe it or not we still have people in this country who believe the process and the Democratic party. You can expect to start hearing from them very soon. They will be telling you how much worse the Republican candidate is. They will be asking you for money. (Well, not real money; maybe $100) They think everything would be hunky dory if Gore had gotten one more vote (from the silent Justice).

  9. Lidia

    Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue. –Thomas Paine

  10. Rick Caird

    Every single job these corporations “destroyed”, they created in the first place. What? Are we supposed to be Europe? Create once, destroy never?

  11. JamesW

    “For the last four decades, U.S. corporations have been sinking our economy through the off-shoring of jobs, …”

    And please let us not forget how the use and abuse the US foreign aid programs, firstly to build so many of those foreign factories, production facilities, R&D labs, service centers, etc., etc., to which they offshore those jobs, and also create any new ones at.

    Plus, secondly, many of the foreign aid is laundered and returned to the US as congressional campaign contributions, i.e., Other People’s Money being used to buy up those congress critters.

    Excellent blog post!

  12. JamesW

    “Corporations must have incentives to retain educated and experienced workers instead of laying them off or off-shoring their jobs.”

    Actually, I strongly disagree with this, it is too much like the typical USCoC (US Chamber of Commerce) talking point.

    They now have plenty of incentives, what they require, what the rogue American government must now do, is stop with the tax breaks for offshoring jobs, stop with the US foreign aid to build those offshore facilities, and all thos “shell” companies, who have the majority of their operations overseas — must be offered the choice of either joining them completely — offshore ALL the operations, including those headquarters based here — or else they must return those jobs here.

    Economies are systems, not one-way pipelines benefitting only a select few, while the rest of us pay.

    1. Historicaecon

      Incentives, like efficiencies, only exist within a system. The key is to restructure the system itself. This is where the New Deal is a good model. Roosevelt and his cohort were institution builders, and the structures they built are still the best part of our regulatory apparatus today. Tweaks are for suckers. What we need is a complete restructuring.

  13. allcoppedout

    Much the same is true in the UK. What all our political parties promise is rescue by the private sector cavalry. Government won’t create jobs but it could stop the current financial frauds and insist on a private sector based on reasonable wages and returns and the investment of these returns. The UK is already at the bottom of the race to the bottom in financial fraud and finance as ultra anti-progressive wealth redistribution. Missing in this analysis is the question of how much work we need to be doing given productivity increases and how we have been suckered.

    1. Ishmael

      Allcoppedout — I agree that the fraud should be investigated and punished. I believe in the US, easily 10,000 plus people would be convicted. As part of their conviction they should be stripped of double of their earnings from the fraud. That would stop further fraud in the future. I would also not import from countries that basically violate our own minimum wage and child work laws as well as environmental laws. It is foolish to pass such laws and then import from countries that have looser standards. Finally, I would also prosecute all fraud. You lied to get a mortgage — fraud and you should be prosecuted, period.

      Finally, the govt spending needs to be reigned in to a mathamatically sustainable level. Currently, even if you took all the money of the 1% it could not support the level of spending. Unless you do that you are moving towards an implosing like happened in Greece.

      1. Hugh

        You are remarkably consistent in your intellectual dishonesty. Banks and mortgage underwriters had the legal departments, experienced professional staff, and accountants. But you would equate their culpability in making millions of fraudulent loans with those they suckered into them. Nice trick if you could have gotten away with it.

        As for your comparison of the US with Greece, all it shows is that you have no comprehension of the difference between being sovereign in a currency and not being sovereign in it.

        1. Ishmael

          Hugh — Talk about consistency, Hugh you are a socialist communist forever. If people could not do the match and know they could not afford the house then they deserved to lose it. The world does not exist to carry the stupid on its backs. Sorry, all of you utopian one world skittle crapping unicorn worshipers. See Hugh things these people should now get their houses for free and the working people pay for it for them.

          1. F. Beard

            Sorry, all of you utopian one world skittle crapping unicorn worshipers. Ishmael

            Do you think there is no alternative to fascism but Communism? Also, it is the central bankers who desire a one-world system and currency to eliminate, they think, those embarrassing Depressions they cause.

          2. Up the Ante

            I’ll pretend I’ve been snagged by some of your statements.

            As JamesW said above, “Plus, secondly, many of the foreign aid is laundered and returned to the US as congressional campaign contributions, i.e., Other People’s Money being used to buy up those congress critters. ”

            As an example, how many congress creatures have played the role in not only looking the other way, but assisting, Iran’s nuclear program ? Presidents, even ?

            The Proliferators/Nuclear Secrecy Cult now would have us believe the true purpose of govt. is the paying of nuclear dues.

            Skittles, oh yes. Like Barney’s “discretion” ?

            secrecy, looting of economies, skittles, snagged

          3. Lloyd C. Bankster


            I like the way you talk. I hate pandering to workers and would like to see their wages cut by 50 to 75 percent.

            If they don’t like it let them sleep in cardboard boxes for the rest of their short miserable lives.

            How’s about joining Justice Scalia and me for a round of golf at the Sebonack this weekend, followed by a dinner of caviar and spotted owl?

            Tee time’s 11 AM, and we’ll be sending Stretch Hummer Limo to pick you up, complete with 2 Plasma TVs, a Laser light show, 8 bar areas, and a lighted dance floor.

            See you there!

      2. Susan the other

        Ishmael: “Even if you took all of the money of the 1%, it would not support the gov’t level of spending.” Very insightful. Because unless we create jobs and an economy that can support the required level of spending, we are definitely going have to go after every penny of the 1% and then some.

      3. jonboinAR

        I would also not import from countries that basically violate our own minimum wage and child work laws as well as environmental laws. It is foolish to pass such laws and then import from countries that have looser standards.

        I agree. All you're doing in that case is guaranteeing industrial arbitrage, moving factories and jobs, along with the pollution and the exploitation of labor, offshore. We simply have to mandate minimum standards for the factories that produce imported goods. They will squack, but what can they do about it, not sell to us?
        I can't see a downside. It will help them, by developing a viable middle class, as well as us, by protecting ours.

  14. Ishmael

    How can the public take control of the business corporation and make it work for the real economy?

    What a statement that is. That is basically saying they want to nationalize private propery. Yup, that has worked out well in other places. By the way I have lived in worked on four continents and was involved in business in Argentina in the late 70’s.

    By the way, Corporations or similar forms of entites have been around at least since the 1700’s. It was the reformation and the getting rid of anti-interest laws that allowed the pooling of capital to form the forerunners of the modern corporation. Corporations creat the jobs and they should have the right to destroy them. Otherwise you end up with a structure like the USSR where “they pretend to pay us and we pretend to work.” People who do not like that can get out and work for themselves. I do!

    Now the comment above about foreign aid building factories is bogus. I have won lots of bets on that one. Ninety-five percent of the foreign aid in the budget is given to Israel (most of it) and Egypt and that is mainly spent on military equipment. The remainder is chump change.

    This whole article reaps of Looserville!

    1. wunsacon

      Don’t be so juvenile.

      >> Corporations creat the jobs and they should have the right to destroy them.

      What creates “jobs” is “demand for goods/services that you can’t or prefer not to do on your own”. This says nothing of what kinds of organization we allow, favor, or should favor to deliver those goods/services.

      Why do so many jobs “belong” to corporations? If there are economies of scale to be had, then by definition large organizations are more efficient. (The efficiency benefit might be split between profits, an improved product/service, or labor — making some corporate jobs more highly paid than sole proprietorships.) Further, to better protect their shareholders from liability, large organizations prefer organizing as corporations. (This “feature” has become a “bug”. I favor eliminating the corporate form entirely and forcing businesses to reorg as partnerships.)

      >> It was the reformation and the getting rid of anti-interest laws that allowed the pooling of capital to form the forerunners of the modern corporation.

      You’ve been given a Rorschach test and that’s what you come up with. At best, it’s just part of the picture.

      Have you thought about farm automation and mandatory schooling? We went from having a population of people whose sole job was “feed myself” to having (by now, in the US) a mere 1% of the population feed the rest. Concurrently, mandatory schooling (anti-child-labor laws) increased the average person’s potential contribution. So, instead of a nation almost exclusively living off the land, we raised a creative class of people.

      But, really, there are many reasons why we are where we are.

    2. F. Beard

      How can the public take control of the business corporation and make it work for the real economy? Ishmael

      I agree. However, if all the common stock of the corporations were nationalized and equally distributed to the population what difference would that make to the running of the corporations? None?

      1. skippy

        One infection to bind them all, make complicit, unclean.

        Skippy… everyone bongo bongos each other equably?

        1. F. Beard

          Well, I’d sell my stock in banks, abortion clinics, private prisons and other objectionable corporations. Other could do the same.

          1. skippy

            Profit motivation says no.

            Skippy… even church group / investors are down with it, good luck with that.

          2. skippy

            Taptiklis poses some problems with this, saying that this process of categorising human needs allows humans to be regulated and administered by purely rational means, and leads to the acceptance of the possibility that all needs can be monetised.

            According to Taptiklis, one of the most important implications of Maslow’s hierarchy of needs is that it weakens the idea of human society. Each person is a walking bundle of needs, concerned about needs at one of the levels on the hierarchy depending on their maturity. The relationship of these individuals to others is about how those others can fulfill their needs.


            One of the major controversies in developmental psychology centres around whether development is continuous or discontinuous. Stage theories of development rest on the assumption that development is a discontinuous process involving distinct stages which are characterized by qualitative differences in behaviour. They also assume that the structure of the stages is not variable according to each individual, however the time of each stage may vary individually [1]. Stage theories can be contrasted with continuous theories, which posit that development is an incremental process.[2]


            9 Conclusion

            1) How does the method relate to the result?

            a) The Advice of the Wise lacks the information, for which personality traits (risk profile) and environment (culture) the advice is best suited.

            b) Positive Psychology devaluates retreat-oriented ways of living.

            c) Philosophical novels are free to describe a peculiarity in ethics instead of giving a complete picture.

            d) Sociology doesn’t investigate the relation between individual life stories and happiness.

            e) Happiness economics cannot interpret the historical and cultural context of happiness

            2) Does the variety of methods lead to moral relativism?

            Methodological pluralism is neither a reason for moral relativism, nor a reason against it. The variety of methods simply enhances the capacity to check arguments on both sides.

            3) Can moral universalism be founded on reason?

            a) The cultural diversity of moral rules is a fact.

            b) There are strong arguments for non-absolutism and value pluralism. The term reason can be associated with both life-friendly and retreat-oriented ways of living.

            None of these arguments excludes moral universalism. The normative force of reason restricts happiness at the cost of others and happiness at the cost of ones own future self.


            Skippy… Maslow was only interested in pidgin holing humanity for a buck, go fish in some one else back pocket.

            PS it scares me…. that you believe such garbage, pyramids representing humanity’s construct.

          3. F. Beard

            Well, I’m pretty sure I would sell stock in companies I found abhorrent but let others do as they think best.

          4. skippy

            “I found abhorrent”… beard

            Skippy… in a nut shell, there you are, all supported by *your* interpretation of a massive word salad and garnished with any bias confirming material you can find.

            PS. I have more respect for Hubert Spencer…

            Although what characterized the development of organisms was the ‘tendency to individuation’ (Social Statics [1851], p. 436), this was coupled with a natural inclination in beings to pursue whatever would preserve their lives. When one examines human beings, this natural inclination was reflected in the characteristic of rational self-interest. Indeed, this tendency to pursue one’s individual interests is such that, in primitive societies, at least, Spencer believed that a prime motivating factor in human beings coming together was the threat of violence and war.

            Paradoxically, perhaps, Spencer held an ‘organic’ view of society. Starting with the characteristics of individual entities, one could deduce, using laws of nature, what would promote or provide life and human happiness. He believed that social life was an extension of the life of a natural body, and that social ‘organisms’ reflected the same (Lamarckian) evolutionary principles or laws as biological entities did. The existence of such ‘laws,’ then, provides a basis for moral science and for determining how individuals ought to act and what would constitute human happiness.


            Skip here…. bloody arm chairs…eh. He should have at least done some field study… sigh.

          5. F. Beard

            in a nut shell, there you are, all supported by *your* interpretation Skippy

            Actually, I have always found abortion abhorrent. I did not need a “word salad” to realize that (in fact the Bible says almost nothing about abortion).

            But keep studying what other humans think about life and have no opinion of your own?

            Btw, I have noticed a lot of idea lifting from the Bible so you have probably been influenced by that “word salad” more than you know – 2nd, 3rd, 4th etc. hand.

          6. skippy

            What you call the bible is a continuation of older beliefs with further extension as time and other[s hands having a go, all with region centric bias. There are heaps more older and interesting beliefs out there, they just never left home as they were not part of a market based ideology. Seizing the opportunity a particular point of humanity’s expansion offered, it was the vanguard to opening up new markets…eh.

            Skippy… humans have been terminating pregnancy for eons, more than not for sound reasons. Hell most non middle kingdom based ideology’s permit sexual practices which greatly reduce the need. Breeding programs… it works till it doesn’t… and then its damn hard to do a U-turn.

            PS. Beard you need to look at all the planetary history, other wise its just a mystic myopic exercise searching for validity and not allowing empirical discovery.

          7. F. Beard

            What you call the bible is a continuation of older beliefs with further extension as time and other[s hands having a go, all with region centric bias. Skippy

            Since all of mankind derives from a single male (from genetic evidence about 44,000 years ago – that would be Noah) and from a single female (about 120,000 years ago – that would be Eve) then it is to be expected that ALL human cultures would share some similarities.

            BTW, have you watched the latest South Park? I’m not sure it actually rained frogs; I should check that. That show never fails to amuse.

          8. skippy

            You have to be kidding.

            The title “Y-chromosome Adam” is not permanently fixed on a single individual. Because knowledge of human Y-chromosomes is still incomplete, Y-chromosome Adam’s DNA sequence, his position in the family tree, the time when lived, and his place of origin, are all subject to future revisions. In addition, demographic changes during the course of human evolution would have frequently caused the title of Y-chromosome Adam to change hands.[3] The following events would change the individual designated Y chromosome Adam:


            Skip here… “The title “Y-chromosome Adam” is not permanently fixed on a single individual. Because knowledge of human Y-chromosomes is still incomplete,”… snip.

            Why don’t your go learn a bit, understand actual science, before stampeding off uttering patently false claims to support your ideology… FFS.

            Skippy… and some wonder how we got into this mess…. in the first place… Gawd heads with armchairs!!!!!!!!

          9. F. Beard

            Why don’t your go learn a bit, understand actual science, before stampeding off uttering patently false claims to support your ideology… Skippy

            I have a BS in science and read Science Daily daily and Poor skippy. Your grave can’t be that far off and you still have no hope.have for years. I’ve learned for instance that the origin of life is still a major problem despite valiant attempts to rule out a Creator. And little things about when oxygen first appeared are still subject to revision as is much else.

            And my claim is not false or at least was not when I read it several years ago. It may or may not be obsolete now. I notice you did not mention Eve’s age which comes from mitochondrial DNA if I recall.

            But keep studying skippy and never reaching any conclusions. But deep down, you expect God to forgive you anyway, don’t you? For your intellectual integrity?

            Well maybe He will. Why not?

          10. F. Beard

            Oh, please pardon the unintentional paste. I thought better of it but I see an accident has thwarted my better judgment.

          11. skippy

            I prefer learning, changing, adapting, as new information becomes available.

            Where you and yours resit, twist, misconstrue, any thing and every thing, to fit a preexisting view point of the cosmos. Developed at a time when humans did not understand hardly anything about the what was under – over their heads, let alone them selves.

            Eve? Please… go finish the simple wiki page, then look at about 10 other publications to cross reference, its right there, plain as day. BTW there is still a huge amount of work to do, so its a bit early for summations.

            Skippy… Your welcome. Having been corrected for error (intentional or not), of which you extrapolated data completely out side its boundary’s. Vapors will do that to ya tho.

          12. skippy

            “an accident has thwarted my better judgment.”… beard.

            Do you own your own thoughts – acts or not?

            Skippy… ownership society ahahahahahah!… Till it might bite a chunk out of their ass ROFLOL!

    3. F. Beard

      It was the reformation and the getting rid of anti-interest laws that allowed the pooling of capital to form the forerunners of the modern corporation. Ishmael

      Common stock companies DO NOT require usury. The common stock itself is a form of money that can be exchanged for labor and other real capital.

    4. Glen

      Learn some history from the Founding Fathers:

      When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country’s founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.

      Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end.

      “Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.”

      George Santayana

      1. just me

        Thom Hartmann Unequal Protection table comparison showing before and after 1886 corporate personhood, at (Before 1886: When Only Humans Had Human Rights, vs. After 1886: After the Corporate Theft of Human Rights)

        And Hartmann wrote article “The Real Boston Tea Party was Against the Wal-Mart of the 1770s” at — he had found a rare first-person account.

        1. Glen

          Nice to meet a non-savage.

          Most Americans have completely forgotten American corporate history, and like you note, WHO we were fighting against in the American Revolution.

        2. ohmyheck

          Thanks, just me! I remember seeing that before, and have been searching for it. I mis-remebered the date, I thought it was in 1881. 1886, a year that shall go down in infamy!

    5. Susan the other

      One of the most productive things we could do right now, if we had actual legislators, is single payer health insurance. It frees up corporations to invest in their own enterprise, not in the medical industrial complex. Corporations are busy devouring each other for no productive purpose. That should change.

  15. Saint Torum

    By the way I lived and worked in Castro’s Cuba, and a few additional years in the US Penitentiary system manufacturing furniture for socialist bureaucrats- before I saw the error of my ways and embraced American free enterprise. If there’s any hope it comes from the smartest minds at Broookings: hard work, patience, patriotism and a can do attitude are what separate us from the pogroms of Stalin. This country is headed to Looserville because the train is barreling down the left side of the tracks and liberals only want to make sure the train cannot run right, with truth and justice and freedom. Pay your mortgages and manufacture furniture if you need to – I did it!

    1. wunsacon

      >> US Penitentiary system manufacturing furniture for socialist bureaucrats-

      So, experience in an embargoed country and “prison labor” convinced you to insult anyone criticizing the way corporations are run today? LOL. Yeah, there was no middle ground…

    2. F. Beard

      Pay your mortgages and manufacture furniture if you need to – I did it! Saint Torum

      That’s all well and good if there is sufficient demand for new furniture.

  16. Hugh

    There seem to be a lot of corporatist trolls on this thread. I guess it struck a nerve. We live in a kleptocracy and corporations are a primary means by which our elites loot the rest of us. So it is pretty much axiomatic that they are not going to create jobs, look after their workers or the communities in which they operate, or really do anything otherA than loot their workers, their customers, all levels of government, even their investors if they can.

  17. GoAheadEnvyMe

    A war between capital and labor has always existed. At this time in history, capital appears to be winning, if not already having won…

    1. Up the Ante

      “At this time in history, capital appears to be winning, if not already having won… ” so said the propaganda leaflet.

      “Capital” also has posters of itself with a self-served gun in its mouth.

    2. Susan the other

      There are various forms of capital. Money is one. Credit is one. A peaceful, functioning civil society is one. Labor is the biggest form of capital. A clean environment and the maintenance of it is imperative to capital – without it there can be no “capital” at all. To reduce “capital” to just one piece of the puzzle – to only consider capital to be “money” – is as nuts as it is stupid.

      1. Up the Ante

        “To reduce “capital” to just one piece of the puzzle – to only consider capital to be “money” – is as nuts as it is stupid. ”

        This renders the process of thinking about capital to be an invitation to consciousness, and there the entertainment begins as consciousness is defined.

        1. F. Beard

          This renders the process of thinking about capital to be an invitation to consciousness, Up the Ante

          Not necessarily. If we had true liberty in private money creation then the distinction between money and real capital would become very plain. The only money then that would necessarily be capital would be fiat since it is required by government for taxes. Private money forms such as gold and silver coins could easily drop to their mere commodity value in the presence of more sensible money forms such as common stock.

  18. wunsacon

    We should not even care about “jobs”, per se. We should care about standard of living / qualify of life.

    Machines are going to be doing everything, within 30-40 years. Nobody should waste their time showing up at a “job” to earn their daily bread. If today’s Tories (aka “right-wingers”) insist in 40 years that human beings “earn” their living by some mechanism familiar to us today as a “job”, then these Tories will be watching lines of “unemployed” starve.

    I would hope that’s impossible. But, given the absurdity and inhumanity of many Tory arguments, I concede it’s possible.

  19. Trestle Rider

    This article is the biggest piece of crap I have read in years. One unsupported opinion after another, each a fantasy. Corporations have not been sinking our economy, they, like water flowing downhill, seek maximum profit and make their expeditures go further. Part of international relocation is because that is where the customers and economic growth is. A business will naturally fight all forces that prevent its growth, so what? It would be crazy not to.

    Here is news for the author. A healthy company makes profits. Weird isn’t it. And no, it does not intentionally do so at the expense of people.

    As for large scale electronics manufacturing in Asia, there have been plenty of contract manufacturers in Taiwan, Japan, and Korea since the 70’s and 80’s.

    Horifically abused foreign workers? Completely psychotic. Most electronic manufacturers are Taiwan companies that were part of the contract workforce in the 80’s. They are familiar with, and have applied western working conditions and rules for decades, including China. The uneven working standards are mostly in Chinese tier 2 subcontractors, not multinational behemoths like Foxconn, Flextronics, Jabil, or Quanta. The author wouldn’t know because I doubt she ever left the US.

    Yes, government should regulate, and tax, and tariff, and set up the conditions to benefit all, particularly those in society that are easily harmed. Even nasty Republicans, eyes roll, know this as well, despite the author’s foaming at the mouth against all things conservative.

    1. F. Beard

      And no, it does not intentionally do so at the expense of people. Trestle Rider

      Actually, it is a “Tragedy of the Commons” situation. Businesses that do not borrowing from the government enforced/backed counterfeiting cartel, the banking system, are at a disadvantage to businesses that do borrow.

  20. F. Beard

    “Corporations are not working for the 99 percent.”

    Then nationalize their common stock and distribute it equally to the entire population. At the same time, the entire population, including non-debtors, should be bailed out equally of all debt to the counterfeiting cartel, the banking system. That would prevent the cash hungry from having to sell their stock just to eat or avoid homelessness as apparently happened in Russia.

    The above would be a combination debt and property return Jubilee ala Leviticus 25 except updated for modern circumstances.

    1. Defiant

      Greece, a country who tried to support a free for all system, will likely try to bail itself out soon, let’s wait and see how this goes, but I have a gut feeling it won’t be pretty and all the people supporting that system will see for themselves that it does not work.

      You cannot create wealth by destroying it, the limitation of currency is what gives it it’s value. Bailout out everyone will not only have a 180 degree effect in terms of economic growth (the currency becomes worthless), our country will probably be in total chaos at that stage with no government/judicial structure in place.

      The truth is that a capitalistic society looks for maximum productivity gains regardless of location. The direct benefict is not directly towards the 99% as you say, but overall, society benefits most as companies will have to invest, whether it’s in the US or China, it is a gain to society as a whole. The fact that the company choses to create a job outside of the US or any country for that matter, does not matter, what matters is that the job was created. Now.. there are multiple small changes that our government can do to prevent some job losses, mainly tax rules, and help bring some jobs back. But this will not fix it all.

      In a capitalist society, there is no “saving” jobs mentality because “saving” jobs really destroys them. For instance, keeping GM looks like we “saved” jobs, but a simple analysis will reveal that we are shifting the cost from one side of the economy (tax-payer) to this zombie corporation (GM). The question than becomes, do we as tax-payer want to keep the corporation even if our taxes went up by 40 billion, while GM gets 10 billion of “””””free””””” funds from our government. Would 40 billion in the hands of responsible tax payers not benefit society more than the 10B that GM just got? I will take my bet with the millions of tax payers that have not proven to fail over GM that has proven to be a failure.

      You can argue that the jobs are still there, but time will tell that GM will go bankrupt anyway, as they now live in this “we are entitled” vacuum.

      Capitalism works best than any other system out there. The issue is not capitalism, it is government interrupting real capitalism for personal/power gains. As far as banks, banks will do what our lovely government allows them to do. They mostly hand hold with our government and lobby for rules that benefit them.

      The issue in terms of inequality can be more summed up by the excess credit creation, resulting from our government borrowing to support the programs most likely called success by socialists. Credit makes people feel like they afford things, when in fact their purchasing power is pulled from under them. That is not a net result of capitalism, but a net result of a fiat system.

      1. F. Beard

        Bailout out everyone will not only have a 180 degree effect in terms of economic growth (the currency becomes worthless), … Defiant

        That would depend. If the bailout was combined with a ban on further credit creation then the bailout could be metered to just replace existing credit as it is paid off with no net change in the total money supply (reserves + credit). Thus the currency should not be expected to change in value.

      2. F. Beard

        That [credit creation] is not a net result of capitalism, but a net result of a fiat system. Defiant

        Wrong. Credit creation can occur with any money form that is mutually acceptable to the banks. In the past that was gold and silver, what you might call “non-fiat” even though they were just another form of fiat (a very expensive form).

        1. Defiant

          Bailout out everyone will not only have a 180 degree effect
          Can you quantify the amount of existing debt in the system? that should give us a rough count on how much debt will have to be forgiven. That’s not even accounting for giving money to people. I respectfully disagree and am 100% confident there will be a collapse in the currency.

          You state I am wrong on fiat, yet you end up agreeing. Not arguing your response.

          There are so many different variables associated with making such a bailout everyone form of solution that I dont thinkt it’s hopeless to even discuss, amongst what is a fair share, etc..

          Abolish the fiat regime and let failed companies and institutions fail. This will restore confidence in our system. Bailing out everyone will have the opposite effect. Bailing out wall street did not work, bailing out companies did not work, bailing out people will not work. We are going in circles when we call for no bailout of wall street, yet we call for one for ourselves. Where does resopnsibility reside?

          1. F. Beard

            that should give us a rough count on how much debt will have to be forgiven. That’s not even accounting for giving money to people. Defiant

            The debt would not be forgiven; people would be given money to pay it off. Per Steve Keen:

            A Modern Jubilee would create fiat money in the same way as with Quantitative Easing, but would direct that money to the bank accounts of the public with the requirement that the first use of this money would be to reduce debt. Debtors whose debt exceeded their injection would have their debt reduced but not eliminated, while at the other extreme, recipients with no debt would receive a cash injection into their deposit accounts.

            The broad effects of a Modern Jubilee would be:

            Debtors would have their debt level reduced;
            Non-debtors would receive a cash injection;
            The value of bank assets would remain constant, but the distribution would alter with debt-instruments declining in value and cash assets rising;
            Bank income would fall, since debt is an income-earning asset for a bank while cash reserves are not;
            The income flows to asset-backed securities would fall, since a substantial proportion of the debt backing such securities would be paid off; and
            Members of the public (both individuals and corporations) who owned asset-backed-securities would have increased cash holdings out of which they could spend in lieu of the income stream from ABS’s on which they were previously dependent.

          2. Defiant

            can you elaborate on what this would do to prices and economic stability?

            Would this not have a hyperinflationary shock in the system? I think it does, if disposable incomes rises dramatically. Credit is not the same as money.

            What is the effect on the value of money being held by investors/corporates/banks/etc?

            If the net is negative, you are actually penalizing the institutions/individuals that have saved.

          3. F. Beard

            can you elaborate on what this would do to prices Defiant

            If no more credit creation was allowed and if the bailout was metered to just replace existing credit as it is paid off then the effect on prices should be nil.

            and economic stability? Defiant

            Economic stability should improve since credit creation is a cause of the boom-bust cycle. Usury is too but that could be eliminated by allowing non-usury money forms such as common stock to compete with it.

        2. Defiant


          Let’s see…

          How much housing debt is there? 15+ trillion

          How much student loan debt is out there? ohhh 1+ trillion.

          How much consumer debt is out there? about 3 trillion..

          If you factor in other public debt, we easily go above beyond 100 trillion.


          How much actual currency is out there?? I believe the number does not exceed 2.5 trillion in my estimates.

          Perhaps this still does not make sense so let’s take an example.

          Say you are a company owing 1 trillion and making payments of 100 billion a year (the amount does not matter) to cover your loans+interest. Under your theory, this company will be provided with the amount of the loan (1 trillion). All is still well. Today, the company received the payment (1 trillion), paid off the loan, and now has 100 billion disposable income as it no longer has to pay off the loan. The institution that was paid off has 1 trillion in their books also.

          As we all know, money seeks profits, hence, the company with 100 billion will use that cash to invest/purchase things/etc, and so will the company with the 1 trillion. This inevitably drive up prices, as money is freed up. Not only that, this is actually a catch 22 scenario – by trying to resolve all, until you go to the supermarket and a loaf of bread is selling for $100,000. In other words, you just made matters 100x worst. Interest rates will soar at the same time – as inflation (expansion of money) drives up costs. If this worked, than Zimbabwe would be the best heaven on earth – instead, people were fighting for a loaf of bread.

          The value of items is much easier to understand if you break it into units instead of dollars. Say, a loaf of bread costs about 5 minutes worth of x type of work, etc, etc. The amount in terms of dollars is irrelevant.

          1. F. Beard

            Say you are a company owing 1 trillion and making payments of 100 billion a year (the amount does not matter) to cover your loans+interest. Under your theory, this company will be provided with the amount of the loan (1 trillion). Defiant

            Wrong! I said the entire population, not companies. Also, the bailout would be metered to just equal total loan payments; it would not be a lump sum to payoff all principal in one fell swoop. Perhaps that is Steve Keen’s idea – a single lump sum to everyone but it is not mine. I prefer a metered bailout to avoid drastic changes in the money supply.

    2. F. Beard

      Also, I am not calling for an end to corporations but that their common stock be equally distributed in a one-time releveling combined with fundamental reform.

      1. Defiant

        Hahaha –

        Is this supposed to be fair?

        I mean, do you believe stealing is right or wrong?

        If you believe that is wrong – whether a rich person does it or a poor person does it, it is stealing..

        Taking something, like company shares, that are not yours and giving it to people that did not buy it is stealing.

        Or am I missing something here?

        1. F. Beard

          Or am I missing something here? Defiant

          The corporations were built with the population’s own stolen purchasing power via corporate borrowing from the counterfeiting cartel, the banking system, and other raids on the public commons via government privilege. It’s time for restitution and fundamental reform.

      2. Defiant

        i see – so companies will be in debt but individuals will be bailed out.

        That amount will still cause a huge fluctuation in money supply and result in net wash out. Meaning, free money will be equal to no money. You are transferring funds from one side of the balance sheet to the other, but in your theory, money is created out of thin air to pay for debt.

        Since debt is not the same as money, money chases goods and we end up in the same issue. A rise in prices will wash out the “free” money. I hope you get my point, there is really no free money…

        You did not answer the question I posed about company shares. Is taking something from somebody and giving it to another not stealing?

        In other words, you state that the company was built on stolen wealth, I disagree, but let’s say this is true.

        You now take from the company and give it to people that had no stake in bulding the company – hence, stealing again.

        Where does the stealing end?

        You state that companies have stolen via the banking cartel, and in some respect, you are right. In my opinion, and Marxists will conviniently ignore this fact, there are 2 forms of tax in society, and both are stealing the wealth – as you state.

        Tax # 1 – is the tax you all know about – you pay your local, state, federal taxes. Not all taxes are “stolen”, individuals and companies are willing to pay taxes for some services and if the individuals and company agree that a certain tax is positive for society they will ask to be taxed to receive it. This includes firemen, hospitals, etc. The cost for a tax payer to pay for, say a public employee’s salary, their pension, health costs, etc, is never reavealed, all we know is that costs keep going up. In the mean time some of these folks get to retire at 45, with a multi million dollar pension, while the tax payers keep paying until the last day they breath. This is theft. Should the tax payer be presented with a cost/benefit analysis (we are paying after all), the vote would be overwelmingly against such theft.

        Tax #2 – is the one you are in some way alluding to. It is called the inflation tax. The rich and wealthy corporations have access to money and credit. As the banking cartel cheapens the value of money, via lower rates and easy credit rules, these rich and wealthy corporations will use that money to invest. Their investments will rise in value, while the population keeps the devalued currency as they need the money to survive, cannot invest and cannot keep up with inflation. As the fed issues more credit, the population will go from being able to purchase, say a car, to having to borrow a huge amount to purchase the same car. Just look at the last 40 years. Our fathers/grandfathers were able to purchase a house, a car, and other items that we now have to borrow to purchase. This is silence theft.

        As you can see from the 2 taxes, the corporation nor the rich are directly responsible, but do benefit. I can hit the lotto today and I should share no blame for famine and hunger in the world. I can, if I chose, help a few poor people.

        The issue lies withing the fiat banking cartel that continues to devalue the currency day by day. The rich, the banks, the corporations with cash benefit greatly from the controlled demolition. But to make the story complete, me, you, my brother, my sister, my father, we are all responsible because we see happening – it is as clear as water – and we chose to ignore it. We will continue to ignore it.

        Till this day – the Fed continues with the same policies – and you know what is the demand of most people – print more and give us some. That is the demand. Paul Krugman thinks we are not printing enough. What was the definition of insanity again?

        I am not sure about the others on this board – but I see clearly where we are headed – and it looks like a massive wall – and we are a mosquito driving at 250 MPH.

        1. F. Beard

          I hope you get my point, there is really no free money… Defiant

          Wrong. In this special case there is. Consider: 97% of the money supply is “credit” which was created from nothing as it was lent and which goes back to nothing as it is repaid. So:

          1) Ban further credit creation. This would be massively deflationary as existing credit is paid off with none to replace it.

          2) Create new US NOTES and distribute them equally to the entire population, including non-debtors, at a rate metered to just replace the amount destroyed in 1) above. Continue till all debt to the banks is paid off.

          The above would simply replace the 97% of the money supply that is credit with real legal tender and eliminate all private debt in the process with NO significant price inflation risk.

  21. Anarcissie

    ‘This article is the biggest piece of crap I have read in years. One unsupported opinion after another, each a fantasy.’

    And most of the comments as well. Well, this used to be a fairly intelligent web site. There goes the neighborhood….

    1. Walter Wit Man

      Oh boo hoo.

      Why can’t this place be more like the Wall Street Journal? No respectable rag would ever question the core assumption that corporations are inherently good!

      How dare you!

  22. El Guapo

    Mention the word “corporation” and the Koch sucker paid trolls pounce. At least I hope they are getting paid. Fascist scum.

    1. SidFinster

      Do not flatter yourself. I am certain that the Koch Bros and others like them have better uses for their money than paying agents of influence to post here. They could easily flood the site if anyone cared.

      Besides, a true believer “troll” is far more useful than a mercenary paid by the click.

      And you’d be shocked how many Americans believe the sort of nonsense that our trolls spout.

  23. Doctor Brian Oblivion

    Applying the death penalty to a couple of the worst offending and most externality tossing corporations might realign corporate priorities, at least temporarily.

    It is certainly true when Apple executives boldly state “We don’t have an obligation to solve America’s problems.” The United States has no obligation to honor their charter or to allow them to be parasitic at home and destructive abroad. Fuck Apple. And I kinda liked them a decade ago. Oh well.

    1. Defiant

      I think we need to be careful what we wish for, because we might just get it.

      Death sentence might sound like a good solution – until the judge/czar in power decides that you are the problem.

      The issue at hand here is not to make a knee jerk reaction and shoot at the first thing in sight, but to apply rules of responsibility going forward. I agree that some corporations abuse their power, but OUR government is the one allowing it.

      The people have not say in what the Corporation does, but we sure as hell can get a politician out of office. Why are we neglecting this power and chose to look at the wrong bullzeye?

      The issue is not the corporations, but rather the policians that sleep in bed with those corporations and let them do whatever they want.

  24. Conscience of a Conservative

    I agree with much of what you say, but disagree that taxes don’t matter. We have very high corporate tax-rates and then give much of that back through deductions and credits, the result is a tax code that looks like an imbroglio to anyone other than a skilled corporate tax-accountant. Companies will always need to open over-seas subsidiaries to enter new markets and to tap the best resources for a given problem, but what we have today goes far beyond that. Companies frequently game the tax-code through transfer pricing and allocation of costs in such a way that they deduct the costs here and earn the profits over-seas. The IRS is simply out-gunned and can only go after the most egregious cases where the assets transferred are not properly valued. If we earnestly fix the corporate tax, reducing the rate, removing deductions and broadening the base, companies would lose the need to arbitrage tax rates resulting in profits trapped overseas and less jobs here.

    1. Conscience of a Koch

      “We have very high corporate tax-rates” – false, wrong, debunked, propaganda, and dumb. The average is 13 percent.

        1. ohmyheck

          Thank you!

          Jeeeeeezus. I cannot believe that anyone still spouts that “US has the highest corporate tax rate” propagansist BS. “Facts? What facts? Who needs facts when we’ve got Fox News?” (I guess some links to support the fact that that is propagandist BS would help, though)

          And then we’ve got, “It didn’t work in Argentina” BS. Jeeeeeezus. No shit, sherlock, because TPTB freaked out and sent in the CIA and Milton Friedman to make sure it was a failure.

          Do ANY of these Corporatist Defenders ever read Naomi Klein? Maybe NC needs a Mandatory Reading List before being allowed to post here. That might weed out Teh Stoopid…

      1. French Tickler

        Whenever I get depressed about personal tax rates, I go out and buy myself a brand new hat. That helps cheer me up.

      2. Conscience of a Conservative

        We have very high tax rates and very low “effective” tax rates for those who know how to game the system, which is typically the large multinationals who prosper more on their knowlede and contacts of Washington than on allocation of capital

  25. Jane

    This article’s initial claim (about corporations destroying jobs) is true. The reasoning and conclusions present a slew of fallacies. Here are the big two:

    [1] offshoring. This has indeed cost the US some jobs, if we are really insistent on thinking about national job markets rather than, say, the global job market (which, if you’re going to toss around “moral” a lot, is probably an obligation). But in truth a greater percentage of jobs have been lost in the last forty years — the post-Fordist era — via automation. Far greater, on the order of twice as many or more. Corporations are compelled by the market to outcompete each other by being more productive, More productive is defined in part by the ratio of output to labor-hours, which is to say, by the decreasing amount of labor in the processes as the are made more efficient through technological and organizational advances. Successful competition is job loss. Remember, hacks, that this is a relative number; the total number of jobs can expand as the population and sometimes the economy expands. It’s the ratio of labor hours to output overall which drops, and when the economy as a whole isn’t growing (or even when it is), this manifests as unemployment. That is the labor market story of the last forty years, not offshoring.

    [2] This reminds us that the question of this supposedly “moral” sort of corporation we desire is a hoot. Because none of the corporations replace labor with more productive machines or processes, leaving people unemployed, because they are immoral, or the wrong kind of corporation. They do it because they have to compete to stay in business. If the shop down the street ups productivity and decreases unit cost, expelling workers in the process, you must do the same or exit the market. No moral or ethical component to it — that is itself the peculiar fantasy of a certain class of people who would much rather blame supposedly maleficent individuals than admit to a larger structural dynamic.

    But that’s not how we were trained to analyze situations, was it?

    1. KJ

      Jane: look at the final link today (candle problem)… it would appear that “Company X” did not reduce labor with more productive machines and processes”. Rather, it appears Company X did this to meet stock price targets set by the CEO who, in turn, would personally benefit. It is possible, by the way, that the CEO (and Board) chose this path because competitor stock prices were also targeted by competitor CEOs/Boards with the same motivation of personal benefit.

      This is not to say that there are not examples of companies who invest in/develop/deploy more productive machines and processes in order to ‘beat the competition’.

      It is to say that universalizing that context/motivation as the sole, 100% explanatory factor unemployment is simplistic.

    2. Susan the other

      We were trained to see a balanced economy that created its own demand. We never expected that “productivity gains” would destroy the system because it destroyed demand. The Achilles Heel of capitalism?

      1. F. Beard

        We never expected that “productivity gains” would destroy the system because it destroyed demand. Susan the Other

        The “productivity gains” were financed with the workers’ own stolen purchasing power. Now the (ex-?)workers can’t afford the output.

        It all goes back to the counterfeiting cartel. Why are people wed to the idea we need “credit”? We need just money creation, not theft of purchasing power by the so-called “credit-worthy”.

        1. Anarcissie

          People can create their own money (write checks or i.o.u.s, for instance), but then use of that money depends on people believing in it — that is, credit.

          1. F. Beard

            but then use of that money depends on people believing in it — Anarcissie

            How does one compete with a government privileged banking system?

          2. F. Beard

            I can think of ways of doing it, but you’re still going to have a debt-credit system. Anarcissie

            I don’t consider fiat spent into existence as “debt” since no usury is required and repayment (taxation) is not an absolute requirement for all fiat created Likewise for private money, common stock spent into existence does not require usury nor is redemption for the goods and services of the issuing common stock company required.

            Actually, any money spent, not lent into existence is not debt, imo.

          3. Anarcissie

            A unit of money is a claim on something, ultimately labor. Someone will eventually have to go to the trouble of producing goods or services in exchange for it, or at least people must believe they will. Otherwise people will stop believing in it, and it will become useless. So it is exactly like a credit-worthy debt, and if it walks like a debt and talks like a debt, I’m willing to call it a debt, regardless of who issues the units of money.

          4. F. Beard

            Otherwise people will stop believing in it, and it will become useless. Anarcissie

            Not necessarily. Saddam Husein’s money retained valued even after he was deposed.

      2. James Sterling

        Marx predicted these things would happen. He called them “crises of overproduction”, where capital would be so good at making workers produce more for less that eventually there would be no one to buy what was being produced: the capital enterprises would have left their own workers insufficient money to buy each others’ products.

        (notice that it’s a tragedy of the commons: it benefits any individual capital enterprise to screw its own workers, if the other enterprises do not. And it does not benefit any enterprise to unilaterally be virtuous, if all that happens is another enterprise eats its lunch)

        1. Defiant

          Perhaps the Weimer Republic was built on the wisdom brought by Karl Marx. We can see that this went extremely well…

          To answer the question about the crises you refer to above. You state that workers would produce more for less..

          I am confused as to how this is bad?? Let me explain…

          If a company spends 100 on labor/raw materials to sell a widget for 150. But because of productivity gains, the company now builds it for 50 labor/raw materials.

          How is that bad for society? Would the company not want to sell the product for 100 and outsell/gain market share from the others? Would that not be a net gain for society?

          Now, if while all this happened, the Banking cartel/Fed cheapened the money – what you will see is that the cost of the widget will rise while the salaries remain constant. A net loss.

          The issue is not the corporation for not selling it cheaper, it is the act of making the money cheaper, forcing the company to cover the inflation rise.

          Politicians and the fed are the issue, not capitalism, not corporations. Let the irresponsible fail, let the responsible take charge and lead us out of this mess.

    3. Conscience of a Conservative

      Here’s a question. You are the owner of Pear computer and want to compete wiht Apple. You design a good product and alread make cpu’s. You need a screen and you have three choices.
      * buy the screen from a Taiwanese company
      * build a subsidiary in China an purchase from it-this
      option has higher start up costs than the first but
      will result in more profits if you reach volume
      * build a plant in the U.S.-this option has a higher cost
      than the 2nd choice.

      It seeems that nobody cares if an American company engages in the first option, but will scream bloody murder if the company chooses the second option, while if option three results in higher prices, then Pear computer can’t sell their product based on price.

  26. Jack Straw

    Apparently, Dickens never makes clear clear what business Scrooge is in, but it is a small business. I have no abiding love for megacorps – and have never worked for one – but small biz isn’t always a workers’ paradise, either.

    I owned a small business for ten years and employed a few dozen people at its peak. For a variety of reasons, I compensated my employees at the high end of the industry scale, and provided a much more attractive place to work than most of my competitors. That definitely cost me dollars, but there were highly significant intangibles that made doing that very worthwhile to me. I didn’t do it for the warm fuzzies, although I have personality traits that made it appear that way. “Intangible” may be a misleading word, as the benefits have been incalculably high.

    IMO, the benefits of limited liability for small businesses, particularly the type I had, are limited. I was in a lawsuit-prone industry, and I was wrongfully personally named a few times despite being incorporated. In fact, we beat back the trolls 100% of the time in litigation, but the nuisance cost of these cases was pretty significant. That is, it was frequently way more cost-effective to just write out a $2000 check than be on the hook for $10k of defense costs (about 40 billable hours). The few “hell-no” cases I wouldn’t settle added up to about $100k in legal fees – or about two median salaries for a year.

    Just because I was incorporated, didn’t mean I didn’t have personal liability up the wazoo from personal guarantees, contingent liabilities, wind-up costs, etc. One the one hand, the day my company went under was one of the best days of my life – ten years of headaches that didn’t go away at 5pm weren’t my problem anymore (I had one real vacation in ten years). On the other hand, being a small business owner, especially in the kind of business I was in, was an incredibly sweet deal. I paid a lot of taxes, but I got incredible tax breaks as well. My effective tax rate was about half of what a comparable gross would be as an employee.

    I am not a natural business person. It was a totally accidental development, but I was pretty good at it. I consider my very fortunate to have had the chance to do it, to last as long as I did, to have passed on skills and knowledge to employees who are doing pretty well now, and to have not lost EVERYTHING in doing so (but I did lose almost everything).

    There’s a lot to be said on this, and there are a lot of assumptions people have that don’t hold up. But, the one thing I never did in ten years was intentionally create a job. Well, actually I did once. I hired a homeless guy and paid him pretty well and he did a good job for about five years, until I found out that he had stolen a bunch of money.

    See what happens when you try to help somebody?

    1. Fred Businesickle

      I was a business owner, forthright and upstanding, I decided to bestow my hard earned wealth upon a drunk and forlorn ne’er do well. As the story goes, he could ne’ver take to instructions and was immoral, uncooth and laid in the bed that he hath made himself. Eventually, he helped himself to cake while on the clock, further verifying that the lost and beyond repair don’t even appreciate $7 per hour.

  27. Anarcissie

    If corporations actually destroy jobs, some explanation is needed.

    I assume most corporations are creations of capitalists, and are set up to serve their desires and interests. The motivating desire of capitalists, as a class, is to maintain and increase their power, wealth, and social status. We can call this result ‘profit’. The defining method of doing this, for a capitalist, is the exploitation of the labor power of a class of workers.

    The fewer workers which the capitalist exploits, all other things being equal, the less profit the capitalist acquires. Of course, some capitalists can exploit more efficiently than others, but there is going to be some upper limit on the degree to which the capitalists can raise their efficiency. So, by destroying jobs, they are destroying their own business and raison d’etre. This principle becomes especially valid for the class of capitalists as a whole.

    I am oversimplifying here, but even so I think I have pointed out an important discrepancy between theory and observation (as given above) which needs to be explained.

    1. Defiant

      I agree with you. If all corporations did was destroy wealth, than why does it seem that their wealth keeps growing higher and higher.

      As I stated on my post to a few partners on the board, the issue is not the corporation, it is the politicians that allow them to roam wild.

      For instance, companies offshore jobs because some politicians decided this was a good idea and decided it was so good that they deserved a tax cut. Law and behold, companies started to offshore jobs and after years and years of the same policies, guess what? Nobody cares about the law… the companies are the bad ones becuase they are offshoring our jobs. Nobody looks at the policy in place and the politicians responsible for it.

      Think about this for a minute. Would we/companies be as interested in working if everything was free? Of course not.. It’s easy to stand here and say, but we have all these things that would be all free… No we wont, companies would not have organized and built all those things. Food would not be as easy to come by, etc, etc…

      So gree is not all bad, as long as we reward responsibility and let irresponsibility fail. Wealth serves as a monivator to start a corner bakery and grocery store or dealer or supermarket or clinic or school. Would you take your hard earned money, invest in a corner bakery if you would be forced to give away the bread?

      Can anyone explain what the motivator would be in a Marxist society?

      1. Anarcissie

        You’re agreeing with my question? I was hoping to get an answer, an explanation. I have wondering about it ever since I worked for a company that went through a lengthy process of laying off its employees (applauded by the stock market) until finally there were no more employees to lay off, and it went out of business. This, to me, was anticapitalism; the point of capitalism, I thought, was to obtain a profit from the exploitation of labor, not to eliminate the labor.

        1. William

          Capitalists engage in the accumulation of property. Having to deal with other human beings can be a real nuisance, so they avoid it when possible (financial capital is much preferred to human capital).

          1. Anarcissie

            Agreed, there are capitalists who exploit the working class, and there are capitalists who exploit other capitalists — the category of finance capitalists. However, this seems to beg the question, since the destruction of the host by the parasite/symbiote only leads to the destruction of the parasite as well regardless of whether it is done directly or indirectly.

            This suggests that there is some kind of pathology going on, as in the fable of the frog and the scorpion. Human beings are supposed to be smart enough to escape such instinctual traps, but maybe they can’t do it.

            In that case, we could look upon finance capitalism as nature’s way of getting rid of capitalism, and attempts to regulate and humanize capitalism as hindering this process.

          2. Up the Ante

            “.. this seems to beg the question, since the destruction of the host by the parasite/symbiote only leads to the destruction of the parasite as well regardless of whether it is done directly or indirectly.

            This suggests that there is some kind of pathology going on, ..” Anarcissie

            Let’s wrap it up here. As you say, the question is begged — PROMIS software was loosed, the banksters were threatened.

            Now they expect us to believe malicious software can not be defeated by hardware. Seriously, how dumb is that, to expect us to believe the looting we observe is not a reflection of more out of sight on a ‘higher’ level ?

          3. Anarcissie

            So, it’s terminally self-destructive and accelerating, which could have interesting implications in several areas from theory to politics to commerce to personal conduct. No?

            I mean, why worry about New Deal 2.0 and other social-democratic patches if the whole structure is coming down?

      2. William

        Dude, you have to be willfully ignorant to not see how much human activity goes into producing for use, not profit. Raising a family, growing a garden, creating works of art, volunteering labor to the community, and open source development are some examples. The primary reason people can’t engage in more labors of love is our outdated economic system.

  28. Rotter

    We need to bring back the good old fashinoned solutions that worked so well in the 20th century to keep pathologically narcissitic “capitalists” on their good behavior – a few miles of brick wall and a couple hundred thousand Moisin Nagants

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