Business

U.S. Multinationals vs. the Nation: Rich Man, Poor Man

Wall Street pushes for higher public debt ceiling while profits go through the roof
By: Kenric Ward | Posted: April 23, 2011 3:55 AM
Kenric Ward

Kenric Ward

Whatever you think about raising America's debt ceiling, there's a stunning contrast between the credit-challenged U.S. government and the soaring profits of U.S. multinational corporations.

Sorry, liberals, this is not a call for more taxes on greedy, rapacious corporations. At 35 percent, the federal tax rate is already the highest in the world.

But the ironic spectacle of robust private profits in the face of continued record borrowing by the public sector deserves some attention as Wall Street executives demand yet another lifting of the U.S. debt limit.

Warning that the country will tumble into default unless the ceiling is raised beyond the current $14 trillion, financiers echo the dire predictions that pushed multibillion-dollar bailouts to the faltering banking industry.

Are the current apocalyptic forecasts any more accurate than those from the big bankers two years ago? That debate is under way on Capitol Hill.

For now, let's just consider the cavernous gap between the profits being reaped by the private sector's multinational players and the deepening debt incurred by the public sector. How did we get here?

As reported in the Wall Street Journal last week:

"U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy.

"The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That's a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.

"In all, U.S. multinationals employed 21.1 million people at home in 2009 and 10.3 million elsewhere, including increasing numbers of higher-skilled foreign workers."

As U.S.-headquartered corporations move more of their operations abroad to slash work-force costs and open new overseas markets, their profits soar.

In a story headlined "World Revs Up U.S. Profits," the Journal reported that manufacturing by U.S. companies is booming offshore. Intel, Honeywell, United Technologies and others posted sharply higher earnings in the first quarter.

Meanwhile, back at home, where formerly bustling factories and offices stand empty, America's middle class is steadily shrinking. Jobless rates have climbed while hourly wages have stagnated. Even college degrees are no longer a ticket to economic security.

Instead of Henry Ford -- who fueled a thriving domestic market by paying salaries that enabled his workers to afford to buy the products they produced -- today's captains of industry are racing to the bottom.

Companies that remain stateside look to lowball workers and lobby actively for open borders to ensure an unending supply of cheap labor. The same politicians who are driving up the public-sector debt are slavish in serving their biggest contributors (e.g., writing tax laws that encourage offshoring and enable giants like General Electric to get off virtually tax-free).

It's no coincidence that the same Wall Street financiers who are demanding an increase in the U.S. debt limit plump relentlessly for "free trade" and a border-less global economy.

And it's no coincidence that Treasury Secretary Timothy Geithner, who is spinning the scariest yarns about impending government default, was involved in the controversial Toxic Asset Relief Program bailouts while president of the New York Fed. (You will also recall that Geithner had failed to pay his taxes.)

It should be abundantly clear by now that America's economic crises are a bipartisan set-up. "Republican" and "Democrat" don't matter; it's the Money Party that rules.

And the "Hope and Change" promised by Barack Obama? Each day, it more closely mirrors the policies of previous Republican administrations.

Americans could scarcely expect anything different when Obama collected more corporate donations than John McCain.

Back in 2006, then-Sen. Obama railed against raising the debt limit while the Republicans were all for it. Now Obama & Co. are all on board while the GOP squabbles.

In the end, the majority of Republicans will come around, as they always do. The federal government will continue its profligate ways, and the rich will get richer.

After all, as Calvin Coolidge declared: The business of America is business.

Now doesn't "bipartisanship" feel good?

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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.


Comments (3)

LDouglas
6:29AM APR 23RD 2011
Another thought: As far as corporate taxes, IMO, it wouldn't be a bad idea to go back to the way it was during Reagan's term. I don't know the specifics but I do know during that time businesses and corporations could either invest a certain percentage of their profits back into the company and their employees or pay it in taxes.

It seems to me, that was a win-win for the company, employee and the country. It distributed part of the wealth to those who labored for it allowing them to be consumers and taxpayers while strengthening the company through harder workers and less debt for capital improvements, etc.

Probably pretty much as Henry Ford conceived...
LDouglas
6:13AM APR 23RD 2011
Very interesting! Not to give President Obama any sort of pass but I doubt there's any man- or woman despite their best intentions that would be capable of derailing the "Money Party".

It's just too big and powerful and derailing it would mean the loss of wealth- though it's mostly paper wealth- for too many people.

Nope, I don't see "change" happening until the multinationals consume all there is to consume and self destruct. Really, not to be depressing but I think to change it otherwise would not only take a President with the drive, but a willing Congress. And that would take the majority of Congress being willing to sacrifice their money, and live with the backlash and hardship that would be sure to come.

Not that it isn't coming anyway but we can "hope" it continues long enough so that it doesn't come during our lifetime.

BTW, speaking of corporations reminds me once again of the wisdom of our founding fathers- as they had a rational fear of corporations!
http://www.reclaimdemocracy.org/corporate_accountability/history_corpora...
LDouglas
8:42PM APR 23RD 2011
Ron Paul?

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