Afternoon Snack
Money, Power, and the Institutions that Wield It
Essay by C. James Block
Drawing by Bethany Hammond, entitled "Business District"
Recently, the United States economy has been rocked by the largest financial crisis since the Great Depression. A vast majority of Americans lay the blame for this collapse at the feet of greedy Wall Street bankers. These titans of thievery hold their share of the guilt, but they are merely greedy pawns in what has become a much larger, institutionalized con game. The orgy of thievery visible on Wall Street is only a symptom, not a cause, of the nation's economic woes.
The fundamental fact ignored by the mainstream media's commentators and columnists and the government's regulators and lawmakers is that the current economic crisis has been brewing for many years and was only exacerbated by Wall Street machinations. The underlying causes of the financial collapse are rooted in the economic damage the U.S. has sustained over a period of more than thirty years. These wounds were inflicted by three economic ogres that live under the names of Trade Imbalance, Bean-counting Management, and International Monopolism. Trade Imbalance is the most visible monster draining the life out of the nation's economy. Often going under the aliases of "Free Trade" and "Globalization," Trade Imbalance wreaks its damage by slowly sucking wealth and resources out of the U.S. economy. Every year, the U.S. has a trade deficit amounting to well over one trillion dollars. This wealth is destined to never return, and with it go millions of wealth-producing jobs in industry due to outsourcing and bankruptcies resulting from foreign competition. These jobs are partially replaced by wealth-draining jobs in service industries and government, while the remainder of those left unemployed are destined to survive on savings and government support for the rest of their lives. As the cycle goes on, Trade Imbalance grows, more money and jobs disappear, and the nation is left in ever worsening economic straits. Trade Imbalance benefits in part from the actions of the second economic ogre, Bean-counting Management.
Bean-counting Management has insidiously grown in the U.S. business world through the gradual takeover of corporations by accountants and financiers. In the past, successful businesses were run by managers who could see the overall picture in a company and were able to make decisions that led to long-term growth and stability. However, this type of manager was edged out by a new type of manager. This new executive, while an excellent director of finances, was unable to see the long-term benefits of a decision and instead was content to find short-term ways to maximize profits. One company that suffered from this new managerial style was General Motors. As documented in automotive pioneer John DeLorean's memoir On a Clear Day You Can See General Motors, GM was gradually run into the ground by poor decisions made by management, including cheapening products as much as possible to make a quick buck while sacrificing long-term market share. Today, the businesspeople who form the ogre Bean-counting Management are concerned with little besides the Almighty Dollar. Their actions directly benefit Trade Imbalance, as they have no moral or ethical qualms about outsourcing jobs or bankrupting companies in order to fatten their own pocketbooks, thus leading to and expanding Trade Imbalance's hold on the U.S.
Both Trade Imbalance and Bean-counting Management are powerful in their own right. However, International Monopolism is the brains behind the other two fiends threatening the economy. International Monopolism, like Bean-counting Management, is made up of businesspeople. However, its devotees are the few men and women who cling to most of the world's vast wealth. They hold the strings of Bean-counting Management and, as the owners and manipulators of corporations, are the true beneficiaries of its actions. Through lobbyists, they hold the strings of politicians in Washington, as evidenced by the legions of lobbyists working for the financial industry alone. If any citizen questions this logic, they merely need to turn on their television. While billions are given to corporations like Goldman Sachs and American International Group to keep them afloat, there is no real plan by the government to keep its citizens employed, as industry's inexorable march out of the U.S. continues. While the public is kept occupied by meaningless debates between pundits, entire companies are stolen from small shareholders, as was the case in the GM bankruptcy. Millions of stockholders—both retirees with pension funds and small investors—were completely wiped out, while bondholders, mostly large institutional investors, and the government itself divvied up ownership with the unions. This feast by International Monopolism will lead to more and more centralization of the economy, in turn subverting the free-market system and stifling democracy.
Where is the knight in shining armor needed to combat these three seeming juggernauts of economic destruction? What are the solutions to the troubles cited above? The spring 2010 issue of the Imagineer will strive to analyze these issues through interviews with renowned economists, successful businesspeople, and well-known activists, as well as offer some possible solutions to these issues.
Next: "Sexy Things, Animal Progress" short story by Christie Craig