Killing the goose that laid the golden egg

Capitalism is described as "an economic and political system in which a country's trade and industry are controlled by private owners for profit."  That's it in a nutshell, and it's worked better and benefited more people than any other economic system the world has ever known.  But somewhere along the way our system of classic capitalism has been compromised, subverted, and dare I say even perverted.

My brother and I are the owners of a privately held corporation, meaning the two of us are the only stockholders.  On an almost daily basis we do things above and beyond what is required by any regulation because we feel it is the right way to do business.  This costs us a bit more to deliver our product, and reduces our profits somewhat, but we're still doing OK, and our clients say they appreciate our extra effort and attention.  We'll never get rich doing business this way because we're "leaving money on the table", but we sleep well at night.

Today's publicly held corporations can't afford to leave money on the table.  They must lie, cheat, and steal to squeeze every last penny from their customers.  If they don't, their thousands of stockholders will demand a change in executive leadership and/or dump their stock, possibly tanking the company.  If their product can be made the slightest bit cheaper, they'll do it.  Cutting corners has become a fine art.  Profits come first, always!

Consider this:  Pharmaceutical manufacturers employ tens of thousands of brilliant researchers who spend years developing and testing new drugs that improve our quality of life, and in many cases actually save lives.  They're amazing people doing incredible work.  God bless them!

One of their creations was "opiods", drugs that can help those with chronic pain.  This was a godsend for those hurting.  But according to the new rules of what I call "perverted capitalism", pharmaceutical company executives have no qualms at all about turning these miracle drugs into an addictive nightmare for millions (?) of people.  Opiod abuse has now become a national crisis.  Lives and families have been torn apart, all so the drug makers can maximize their profits.  Shame on them!

And, yes, they know exactly what they're doing.  They know they're producing many times more opioids every year than can safely be prescribed and used by actual patients.  Through their lobbyists they even pushed a bill through Congress last year that prohibited the Drug Enforcement Administration (the DEA) from investigating and interdicting massive opioid shipments to "suspicious" distributors.  Had the drug companies failed, the DEA would have put a huge dent in their profits, and to them their profits are more important than peoples lives.  That's just wrong!

Then we have corporate mergers that have the effect of reducing competition and inflating their bottom lines.  Remember when we had Exxon and Mobil and Chevron and Texaco?  Now we have Exxon/Mobil and Chevron/Texaco.  United and Continental merged to form the new United Airlines.  Delta and Northwest merged to form the new Delta Airlines.  American and US Air merged to form the new American Airlines.  Fares are up, and customer satisfaction is down, but airline profits are at record highs.  

Remember when Macy's, Neiman Marcus, Lord and Taylor, Saks Fifth Avenue, and many others were all independent companies?  Now they're all owned by giant retail conglomerates.  Walmart and Amazon have taken over their sectors, too.  Remember local hardware stores, mom and pop restaurants, community banks, and independent car dealerships?  There are relatively few still in business, left behind in the race to merge, "increase synergy", and maximize profits.

And do I even need to mention corporate subsidies, aka "corporate welfare"?  What the hell is that all about?  Did they think we wouldn't notice?

I've heard it said your "character" is defined by how you behave when no one is looking.  If that's so, then many of our players today have terrible character.

It's no longer about doing what's right, but only about what will make the most money and what they can get away with.  At many businesses today doing "right" will get you fired, that's how cold blooded we've become. We're being attacked from within, and we're losing.  Capitalism in 2017 is NOT your daddy's capitalism!

S

Sir, could you spare a dime for an old, broke banker?

Anti-banker post.  Move on now if you're here looking for butterflies and cute puppies.

Ever hear of the term "corporate welfare"?  Want an example?  After the financial meltdown of '08 the Federales quietly did what they could to get the banks back on their feet.  We know about the bailout loans, but did you know we just flat-out gave them money, too?

The Federal Reserve dropped the interest rate on post-crash loans they made to the banks (a regular occurrence) to 0%.  The banks borrowed by the truckload, which meant the Fed had to sell paper to finance the "deficit" this caused.  Then the banks turned right around, using their free borrowed money to buy government notes which paid them several percent (?) interest.

THAT'S how you re-capitalize a bank at taxpayers expense.

Imagine....free money!  It was a 100% risk free transfer of money from your government directly to the banks.  I would have liked a little piece of that, too.  *Dream on Scott*

~~~~~~~~~~~~~~~

I saw an interesting piece on TV last night about rogue traders.  These are bankers (think: "London Whale") who work with little direct oversight buying and selling things such as foreign currencies, etc.  I have virtually no idea how it works but suffice it to say it amounts to high-stakes gambling with bank money.  

If they lose, they can bring down the bank.  True!  It's happened.  On the other hand, if they win, it's a mega payday for the bank, and the bankers.  Lose, they get a government handout.  Win, and it's party time!

The program interviewed some well known (within financial circles) rogue traders who got caught.  They told of how easy it was to fool their bank's risk management people, the regulators, and how easy it was to hide losses.

Here is what I took away:  It's still going on today.  Internal red flags are still brushed aside....as long as the profits keep coming.

You'd think that after the financial interests nearly blew up the world in 2008, we, the taxpayers who baled them out, would know better than to let them go right back to conducting risky business as usual, but we did. 

Our politicians are stuffing their pockets with bank "campaign contributions" and signing off on whatever the bankers want.  Post-meltdown bank "reform" was a joke. Our regulators are inept.  The bankers are still living extremely well on their ill-gotten gains while the rest of us are struggling to recover from the mess they made.

Remember this:  There will someday, sooner rather than later, be another giant financial catastrophe.  Don't think that things have stabilized and go back to living like all is well.  Scary, but all the ingredients are in place right now.  Don't say you weren't warned.

Now, go have a nice day.  :)

S