Ok, maybe not the real end, such as the Mayan Calender running out so we’re all going to go “pfft!” some day, but interesting national stories that do show that, essentially, we as individuals have little real power to protect ourselves against the corporate masters increasingly turning themselves into feudal lords.
Consider this story in the NYTimes (click!) about a woman who had a “angus select” hamburger and was paralyzed by the resulting e-coli which, the story makes clear, even following FDA food preparations guidelines might not have prevented because the stuff is so dangerous.
I was struck by several things in the story — the comparisons to practices in Upton Sinclair’s “The Jungle” are inevitable and reasonably accurate. The statements by the head of the FDA that he can’t require better testing because it might make things hard for the industry, and he can’t do that, of course. Which raises the question, who’s on our side if our own govenrment doesn’t put our safety first?
One thing the story doesn’t say out loud, but should, is the fraudulent use of the word “angus” to describe that meat — Angus cattle allegedly taste better, and you see it hyped all over, with “angus burgers” costing more than regular ones, although I can’t tell any difference. As we see in this story, so-called “angus” cattle are never mentioned in the supply line, and who can tell the breed of all those scaps and leavings they mix together, dose with amonia and then package up all pretty?
Makes one swear off hamburger – or at least only buy hamburger from a butcher who makes it himself.
Another story is this one also in the NYTimes, about the Simmons Mattress company and its fate, facing bankruptcy, after being the subject of 20 years of financial manipulation by the captains of the financial world.
Essentially, the company was bought and sold by a series of investment firms who piled the company with the debt they’d used to buy it, then turned around and sold it to someone else who also piled on more debt to buy it — a mirror of the housing market, using the same idiotic assumption that value would always go up so it was Ok to keep milking the process.
The victims in all this were the employees who actually made the product, of course. All these managers managed to make the company look good on paper, for a while, and they lined their own pockets. It was all a Ponzi scheme, however, that broke down the minute the housing bubble burst and all the paper profits inflating everything disappeared.
What does this mean for us? Newspapers around the country were bought and sold in a similar process that has now left them so loaded with debt that they can’t react to lean times the way a company could if it were properly managed with an eye to protecting not only the stockholders but the employees. Housing market? We all know how that went, and is going.
The entire nation went on a borrow-and-spend bender, and these are all just symptoms. Getting back to responsible financial practices is going to take time and dicipline. Meanwhile, as this story makes clear, the captains of industry are already trying to find other ways to mile Simmons of more money. And, heck, why not? The process worked for them. It’s only workers who lose jobs, and who cares about them?
Kyuule
on Oct 6th, 2009
@ 12:02 pm:
Has this country EVER had responsible business practices? It seems like all there are many “fights” these days. Whether it be the marijuana industry, raw milk industry, environmental industry, genetically modified food, ect. If you take a step back and look and each one of these issues, you will see that they are all fighting the same fight!! A fight where our government has passed laws to “protect the consumer” while benefiting the businesses that push these laws forward in the first place. This practice in no different then it was when our country was founded. He who has the money owns the power. I cringe every time I think that this is the type of country we live in…I hope that you are right and we can work toward changing this. But as I see it, the “war” between citizen and country is just begining to heat up.
flatlander100
on Oct 6th, 2009
@ 12:19 pm:
Yes, the Simmons story in the NYT was fascinating. Especially fascinating was the news that these “private equity” flippers [companies, not houses] actually could not lose no matter how bad their decisions were for Simmons. One group bought Simmons on borrowed cash, and when they had the company, promptly approved a special dividend to themselves to cover the entire cost of the purchase [dividend raised by Simmons floating more debt]. And of course they drew fat bonus and fees all along the way. Result: company bankrupt, investors screwed, and the pirates who arranged it all lounging on the deck of their resort home in Jackson Hole. [Times had a picture.] On a break, apparently, from their palace in Florida.
What I wondered as I read it is this: don’t company stockholders and bond holders have some kind of civil recourse against the looters? During the time they owned the company, didn’t they have a legally enforceable fiduciary responsibility to the stockholders certainly, and the bondholders as well? Yes, investing is a risk, but there’s a difference between management making poor business decisions [think Chrysler], and management looting the company and loading it with millions upon millions in debt in order to pay themselves special fees and dividends.
Used to be traditional that when a ship was sinking, the Captain was the last person to leave it. But for American captains of industry, it seems, when a company is sinking, they are the first ones off, and they take the contents of the safe with them, and poke holes in the rest of the lifeboats before leaving.
Worth remembering too, this is the “private sector” that Bennett, Hatch, Bishop and Company keep telling us knows how to do things much more efficiently and much more intelligently than the government ever could.
Probably they’re right if the activity they’re thinking of is looting.
Gerry
on Oct 6th, 2009
@ 12:52 pm:
Remember, Kyuule, the first Federal Takeover was of Interstate Commerce – some States were exploiting others.
laytonian
on Oct 7th, 2009
@ 10:22 am:
I’d like to know why we “celebrate” these business “geniuses” such as Mitt Romney, for buying, gutting, and then often reincorporating the pieces in tax havens.
Bain Capital (Mitt Romney’s old company) is part of the mess surrounding another mattress company: Sealy.
Here’s how it works:
First, you get some rich friends (or are born with them).
Then you get one of them to set you up with your own “company”.
You then scout for businesses merged by other failing capitalists, that you can dismantle and reinvent.
Remember what Leona said: only the little people pay taxes.
http://www.latimes.com/business/la-na-mittoffshore17dec17,1,4761345.story
Excerpt:
But aides to the Republican presidential hopeful and former colleagues acknowledged that the tax-friendly jurisdictions helped attract billions of additional investment dollars to Romney’s former company, Bain Capital, and thus boosted profits for Romney and his partners.
Romney has based his White House bid, in part, on the skills he learned as co-founder and chief of Bain Capital, one of the nation’s most successful private equity groups. His campaign cites his record while governor of Massachusetts of closing state tax loopholes; his involvement with foreign tax havens had not previously come to light.
In the Cayman Islands, Romney was listed as a general partner and personally invested in BCIP Associates III Cayman, a private equity fund that is registered at a post office box on Grand Cayman Island and that indirectly buys equity in U.S. companies. The arrangement shields foreign investors from U.S. taxes they would pay for investing in U.S. companies.