Self-Interests: Corporate and Financial Institutions can also be a Threat to National Security

Self-Interests: Corporate and Financial Institutions can also be a Threat to National Security
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The last weeks seemed to be a rerun of the 2008 financial crisis with its ups and downs, breaking news and international consequences. The S & P downgrade of the US credit ranking can be challenged for its timing but not for its underlying reasons. The sky rocketing debt, the absence of any sustainable sources of growth in sight and the despicable show that the congress gave on the debt ceiling raise, contributed to fill doubts about the capacity of the US to tackle efficiently the current crisis and quickly get back on track.

The crisis was triggered by the rigged games of a gambling financial system that TARP funds kept afloat. The same financial system that refused to ease credits and loans in order to foster consumption, restart the economy and re-establish confidence. This situation was perfectly presented by Charles Ferguson’s Oscar wining documentary inside job.

Last week’s stocks turmoil demonstrated again the irrationality and the irresponsibility of the financial markets. An incredible speculation fueled by rumors let to the worst losses on the Dow and international markets since 2008. The gambling phenomenon has now spread to nations and their capacity to handle their debt.

Let’s put it this way, free markets have clearly shown their limits to generate wealth for their constituents. Corporations and financial institutions fulfill their own interests independently from any consideration on the impact of their actions on their economic, social and political environment. Corporations are transnationals, overcoming frontiers and most regulations. Corporations drive politics and shape World Trade Organizations. Corporations wanted to access the closed Chinese market and they did it in December 2011.

Corporations outsourced most of US manufacturing jobs to China because of its low cost of labor. Technologies were sold and exported to increase bottom lines and please shareholders. In the early 2000’s, a whole system was built in the US with the illusion that the country could use China as a factory while focusing on financial services to generate wealth. The winners of this deal were clearly the corporations and China but certainly not the US citizen.

Currently one man in five is unemployed, 8 millions lost their jobs during the 2008 crisis and only about 1 million people have started working again. It’s not a question of specialization or qualification that macro-economists often raise to explain unemployment. The country has about 7 million qualified people that were already working before the crisis who can’t now find a job, any job. The different budget reductions that have been agreed to raise the debt ceiling and the subsequent agreements of the next months will reduce definitely the upwards debt trend. Nevertheless, they don’t underline a clear growth strategy to generate wealth.

The Republican party is hammering the Democratic administration on its capacity to tackle the crisis and reduce the unemployment. Arguably, they don’t have neither a clear strategy to do so. The idea of reducing federal expenses and ease taxes on wealthiest Americans and corporations to generate a US growth is doubtful. Today’s trend is to go East and invest in low cost labor countries and there’s no sign that this trend will be reversed. The jobless recovery trend that went on during the last couple of years after the 2008 crisis is symptomatic of this corporate unwillingness for a more equitable distribution of investments and profits. How can we win if most of us is loosing? How do corporations expect to continue generating increasing profits if the citizens can’t spend and consumptions is stalled? There’s must be a better deal that going to such uncontrollable extremes under the banner of an unbridled capitalism celebrating free markets.

Only a pragmatic and intelligent “Made in USA” strategy will allow the country to again create, design and innovate locally to generate jobs and export tangible values not only financial titles. The example of Germany in current’s weakened EU is eloquent. Germany has a strong manufacturing industry with important exports to China.

The idea seems incongruous but is it wrong to demand from US corporation to have a sens of national interest when elaborating their business strategies?

With its state owned capitalism, the Chinese government enforces a clear and strong pressure on Chinese corporations to serve their national interest. Why can’t this be the case in the US?

In a New York Time’s post, Drew Westen summarized what most of the citizens that elected President Obama expected from him when taking power. A clear and though stand on what the country has undergone because of the gambling game started by an irresponsible financial system. Unfortunately this didn’t happen.

We reached a situation where corporate and financial actions have a major and critical impact on the country’s economy and stability. It’s thus legit to state that, when not thoroughly assessed, their actions can be a thread to the national security. The country would certainly not tolerate that groups of interest jeopardize its stability.

I read again the following quote for President Lincoln and I felt that the seeds for this endemic problem where present with the birth of the nation. It is time now to fix things and force corporations and financial institution to act responsibly. United we stand divided we fall.

“I see in the near future a crisis approaching that unnerves me and cause me to tremble for safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic destroyed.”

ABRAHAM LINCOLN, letter to Col. William F. Elkins, Nov. 21, 1864

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