News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to MinneKota@gmail.com

Thursday, January 12, 2012

America, the corporatocracy

So some peons lose their livelihoods and their lives.  Who cares?

That is the attitude that is revealed in the discussion of what venture capitalist organizations contribute to the country.  The argument in favor of them is that they raise money to buy out companies and engage in "creative destruction":   they buy up companies, break them up, and sell off their parts.  They make money by selling off the good parts for more than they paid for them; and they eliminate the bad parts.  Mitt Romney made millions doing this with Bain Capital, and he is said to be the richest man running for president.  The apologists say that with venture capital the money for failing companies comes from the private sector and does not, at least, involve taxpayer money. 


The argument against such capital ventures is posed by people like Rick Perry, who sees the companies as vultures which consume all the good from the companies they  buy, then leave worthless carcasses behind for the rest of the world to deal with.  Newt Gingrich says that Mitt Romney “is gonna have to explain why would Bain have taken $180 million out of a company and then have it go bankrupt, and to what extent did they have some obligation to the workers?”  Even some Republicans see venture capital companies as parasites and scavengers.  The money they make goes to a few of the carcass-feeders and does little to contribute to the economy.

The defenders of creative destruction insists it creates value, but it creates value only for those few in the companies who receive the benefits; it creates poverty and disaster for those who lose their jobs and for the communities where the destroyed companies once operated.  It is clear that in the minds of people like Mitt Romney that their concern is only that the privileged get exorbitant wealth and power.  The people who are damaged by the acquisition of wealth and power are expendable and count for nothing.  To criticize the destructive excesses of venture capitalism, says Mitt Romney, is an attack on free enterprise and unAmerican. 



This is one of the factors that defines the one percent that the Occupy Wall Street movement identifies.  In talking of the poor, Hitler had his useless eaters.  We now have useless feeders off the weak, the dying, and vulnerable.  The GOP has become totally subservient to the useless feeders. 


Another factor is that the profits gained by venture capitalist enterprises gets a huge tax break.  


One must think of those workers in China who threatened a mass suicide after a company they worked for in jobs largely outsourced from America reneged on a wage improvement.  In 2010, fourteen workers in the plant committed suicide because of complaints about wages and working conditions.  One would hope that in America, the workers would take out the corporations before they would take themselves out. 

Aside from venture capital companies, there is a matter of consolidation--mergers and acquisitions--in general that affects business and how it gets done.  These matters affect local communities and individuals.  The question is whether these consolidated business produce good or better products and services or whether their cost cutting also cuts quality.


John Huntsman has announced that he is for breaking up the huge oil companies so that they do not monopolize so much of the economy and to break up the financial companies that are too big to fail.  In his view, these gigantic companies operate on their own whims and jeopardize the economy.


The oil companies and their products and services are an example of where their hugeness affects local consumers.  As one who  traveled extensively for my work, I found that petroleum companies were an essential part of my ability to function.  Both as a customer and one who oversaw other people's travel arrangements, oil companies were a large consideration in they way we operated.  


One of the factors was credit cards.  They made it much easier to pay for, track, and reimburse travel costs.  But there were other conveniences and essential services involved, too.  A card that I used often was Union 76.  They had truck stops and convenience stores located along the major travel routes and some of their outlets had communications provisions.  Before the age of the Internet and cell phone,  Union 76 truck stops operated communication centers where one could stop, pick up, and leave messages as you traveled across the land.  The message service was a way to avoid delays in trying reach people by telephone and lose time and patience by playing phone tag.  


At that time, I had a number of  credit cards from oil companies that stations in Aberdeen and could be used across the land, so that I was always near fuel and maintenance services when needed.  Those cards included Mobil, Amoco, Texaco, Phillips 66, Conoco, and Union 76.  The Mobil station in Aberdeen closed many years ago; it is now the site for Blockbusters.  After the station closed, my card lapsed because I did not use it.  That was an inconvenience because the oases on the interstates around Chicago feature Mobil service products.  


Then one year as I traveled to Michigan, a trip I made a couple times a year, I found that the Union 76 stations were gone.  There was one just west of the Twin Cities where I stopped regularly.  It changed brands to something I did not have a card for.  When I got near Madison, Wisconsin, a Union 76 station where once I checked for and left messages was gone.  When I got to Indiana, the Union 76 station where I regularly fueled up was gone.  And when I got to Lansing, Michigan, the station I patronized there was gone.


The disappearance of Union 76  foreshadowed what was to happen to the places I patronized in Aberdeen.  The Amoco stations were changed to BP, and then BP decided not to do business in this part of the country.  Most of those stations are Sinclair, who turned down a request for their credit card to replace the useless BP cards.  So now I do not patronize those former BP stations.  There are still BP stations in Brookings and Sioux Falls, so the card is useful for instate travel.


Then Texaco was merged into Shell, who automatically issued new credit cards after the merger.  Phillips 66 and Conoco also disappeared completely from Aberdeen, which leaves Shell the only major brand in Aberdeen where I use a credit card.  However, I stopped using the Phillips and Conoco cards anyway because an organization for which I traveled took them off their list of places for which it would reimburse expenses.  They had some dispute with credit policies and products and put those two companies on the "avoid" list.


Most of the gas I buy locally now is from a convenience store down the  street that gives a discount to regular customers who pay cash.  


But the point is that, as with venture capital ventures, mergers and acquisitions among big corporations may pad the bottom line for the companies, but they often represent a reduction in the quality of products and services.  They benefit the stockholders, but ignore the customers. These corporations affect the lives of people by the power and influence they exert on government, but more noticeably by the nature of the presence in local communities.  


The simple fact is that these companies are making huge amounts of money off the people, but are not doing much to earn that money in terms of quality of products and services.  And certainly not in terms of providing jobs. 




Mitt Romney says it is unAmerican to criticize these corporations.   If individual citizens operated like the corporations they would be regarded as very bad citizens, even criminals.  But that is the corporatocracy that America is becoming. 

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