Wednesday, February 9, 2011

Corporate Loyalty to the Global Market, not the U.S.

Charles Hugh Smith presents an excellent analysis of why the U.S. middle class is being destroyed, at his website here:
In a nutshell, corporate profits are now increasingly from overseas consumers, almost half of all revenues.  Due to the logic of corporations, being abstract entities whose sole purpose is to deliver profits to shareholders, they have no loyalty to America.   
Yet, amazingly, they are allowed to make contributions to political candidates.  In fact, they have come to dominate the political process, hijacking the national parties so that the government essentially becomes captive to their globalizing agenda. 
As Smith puts it:
The erosion of the American middle class is of little concern for one simple reason: it no longer matters much on the global stage. All that Global Corporate America needs from America is a stable foundation that won't offer up any surprises or spots of bother.
Policy Reforms Needed
Obviously, corporations should not be allowed to make campaign contributions.  This is a basic no-brainer.  Only U.S. citizens should be allowed to make campaign contributions.  Corporations, which by definition, have no loyalty to the U.S. should not be influencing its economic policy.
Corporations should also be taxed differently.  A sliding scale of taxation should apply based on the percentage of U.S. domestic workers.  Perhaps the percentage of revenues from foreign sources should also be taxed at a higher rate.  
Our tax policy should reward domestic businesses, and handicap corporations that offshore jobs. 
There seems to be little hope of reform at this point, as economic elites have utterly hijacked the political process.  As Smith points out, the irony is that increasingly, it is international profits which allow global corporations to exert greater influence on domestic policy:
The concern for domestic jobs is mere political expediency. U.S. corporations are pulling $500 billion in profits from non-U.S. sales, and they hold $1 trillion in stashed overseas profits in various tax havens. All the growth in their revenues and profits are coming from non-U.S. sources. Spending $3-$5 billion on lobbying and campaign contributions is an "investment" with extremely high returns: for that small sum, U.S.-based global corporations make sure the U.S. government and citizenry don't become overly burdensome or obstructive.
Something needs to be done, and it needs to be done now.   We are in desperate needs of a people's political uprising to challenge the unholy alliance that has hijacked our political process.  Unless people start to organize in their own self interest, we will continue to get more of what we are getting: the cancerous growth of poverty.   

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