The Kleptocracy giveth,
and the Kleptocracy taketh away…
Insofar
as “synergies,” “efficiencies” and “adjacencies” are a euphemism for job cuts,
2017’s huge merger haul spells trouble. The 10 biggest U.S. transactions to
quantify targets in 2017 expected a combined $7.9 billion of annual savings,
equivalent to the cost of employing 250,000 American workers at the median
wage. Some $3 billion of the proposed savings come from one merger alone:
Broadcom’s $130 billion offer for rival chipmaker Qualcomm.
By J.M. Hamilton (1-21-2018)
One could hear a pin drop last week, w/in C-Suites throughout
the land.
POTUS Trump, once again, made it abundantly clear that the
GOP is racist; and that he entered the White House utilizing a divide &
conquer GOP campaign strategy (and subsequently enacted policies) that has been
in place since Mr. Nixon darkened the White House grounds, as Commander in
Chief.
At issue, in the midst of immigrant and refugee negotiations
with the Senate, Mr. Trump referred to El Salvador, Haiti, and Africa as
“shithole countries.” While it’s true
that many of these nations are economically challenged, it does not take a
rocket scientist to figure out that the U.S., and the West, have played a major
role in the current malaise surrounding many of these countries’ economies: from
a history of colonialism to CIA intervention and meddling, all the way to
multinational exploitation and intervention in local government.
But to Mr. Trump, his classification and designation had a
more racial bent, because it was coupled w/ his belief that we need more
immigrants from Norway (a country that is predominately white).
Like I said, not a word from the corporate & multinational aristocracy. After all,
POTUS Trump had just delivered a huge tax cut.
And apparently, the price to be paid - for what Mr. Samuelson at the Post
referred to, recently, as a “bribe” - is complicity and silence.
And that silence is
both deafening and can be construed as consent:
Qui tacet consentire videtur, ubi loqui debuit ac potuit.
Moreover, the multinational royalty aren’t just remaining
silent, but are endorsing Mr. Trump by opening their checkbooks. Many have stepped forward with one-time
bonuses for their employees, or slight hikes in pay (albeit the pay increases,
in many instances, still will not provide a living wage).
That these bonuses have been coupled in more than several instances, w/ rounds of layoffs or corporate facility closings, means that
the tax cuts provided by the GOP will more than likely be allocated to
financial engineering: job killing M&A; stock buybacks; and further job cuts.
But we don’t have to wonder about this, many CEOs have gone
on record as saying as much.
And hence, the quid pro quo…
You make us, and our shareholders, wealthier Mr. Trump and we’ll trickle
a few bonuses among our employees. These
bonuses – in the aggregate - might spark a temporary economic sugar rush, that
will hopefully help out the GOP’s 2018 reelection prospects (Notice, the
employee bonuses are one time, whereas the GOP tax cut for business is
permanent – that is, “permanent” at least until some future generation finally recognizes
that trickle down is nonsense, and has bankrupted this nation, and mortgaged
their future).
And just like compounded interest, compounded tax reductions
– on this order or magnitude – will mean the kleptocracy’s wealth will explode exponentially over time. Further
aggravating the wage & wealth divide that is threatening to tear Western
governments and society apart at the seems.
More unsettling too, is that several market characteristics
and dynamics are coming together to create the perfect storm, in favor of
multinationals and against labor.
Consider the following:
·
As
noted by JP Morgan CEO, Jamie Dimon, last year, the number of publicly traded companies since the mid- ninties has nearly been cut in half;
·
Entrepreneurship
and the number of startups has been in considerable decline, spanning decades ;
·
Industry
consolidation and M&A has flourished, over the same time frame;
·
Lending among Wall Street banks – a catalyst for entrepreneurship and job growth – has
declined since 2010 (only recently enjoying an uptick); and
·
The
capture of the Federal government by the oligarchy means that law and policies
that protect labor, and labor’s right to organize has been decimated.
All these things combined not only have helped fuel wage
& wealth inequality, but have given large businesses, w/in our cartelized economy, significant
power – monopsony power – over labor.
To such an extent that big and larger business, which
employs 50% of U.S. labor (small businesses, as defined by the SBA, as 500 and
fewer employees - per enterprise, employ 50% of the labor), has grown so powerful that they,
collectively, can make or break an economy, based upon hiring decisions.
It’s important for liberals and for progressives to know and
understand this, as the GOP continues to implode under POTUS Trump.
What may follow, possibly, is the Democratic Party taking one
or both houses in 2018, and possibly, the White House in 2020.
Democratic leadership seems to recognize the damaging
effects of this exceptional concentration of economic power, as they more
recently have adopted positions designed to mitigate the control and power cartels
& monopolies hold over the economy and government, via advocacy for greater antitrust enforcement.
But there is still more work to do and thought given on how
to prevent the kleptocracy from throwing the economy into a tailspin, the
second a future Democratic, or even Green, Administration enacts policies
designed to curtail the power of cartels and monopolies. (Some may recall a taper tantrum a few years back. When the Fed started to back off its hyper-accommodative monetary policies that help fuel the stock market's rise, the bond investment community caused the Federal Reserve to reverse course, and rev up its printing presses, again. Could we expect a tantrum directed at the economy and hiring, if, say, Dems began enforcing & updating antitrust laws? That's not as improbable as some might believe. Think: Capital Strike!)
The kleptocracy is not likely to act favorably or kindly to
anything that upsets the status quo, or threatens their power to mint money (via monopolistic returns) and
control the government. They could act
in ways to deliberately sabotage an administration or political party, the kleptocracy deem to be unacceptable or unworthy.
Given the
precarious position of the nation's finances (thanks to tax cuts for the
wealthy and credit card financed nation building & wars w/out end), a severe recession - orchestrated by
the multinationals - and the resulting diminishment in tax receipts - could
have a destabilizing impact upon the Federal government.
As for our friends, the C-Suite aristocracy… many businesses
talk about accountability, ethics, philanthropy, and responsibility; but
throwing money at a political party – that is based upon the premise of white supremacy – in the hopes of reducing one’s tax bill - is
morally reprehensible, and is not a sustainable business practice.
If business leadership truly wants to be accountable and responsible, they must speak up, frequently and often, against the party of
racism.
After all, misogyny and racism no longer sells.
Misogyny and racism are bad business.
Copyright JM Hamilton Publishing
2018
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