The Neolib Darwin Awards…

The Neolib Darwin Awards… 

SYDNEY (Reuters) - The chief executive of Australia's Westpac Banking Corp stepped down on Tuesday over a money laundering scandal involving child exploitation, just a day after he told staff it was "not a major issue" and that he intended to stay on.

-       CEO of Australia's Westpac exits over money laundering scandal, Reuters

JM Hamilton (11-28-2019)

Nothing quite says American tradition - or a time of reflection or acknowledging the genocide of Native Americans - like Thanksgiving (aka The National Day of Mourning).  So this year, JMH starts a new tradition, The Neolib Darwin Awards.  

JMH firmly believes in a mixed economy: the best of capitalism – highly competitive & innovative markets (the checks & balances in a functioning capitalist system) - combined with government policy, fiscal & monetary, directly aimed at ameliorating the impact of the monopoly/neolib economy we presently suffer.  That is to say, new government policies directly aimed at lifting up the many, in lieu of the redistribution of wealth to the few.

Unfortunately, in business sector after business sector, America’s financial elite no longer believe in capitalism and free markets, but rather, they’ve become addicted to the surest of bets: the crony economy; rent seeking & financial engineering; the rigged economy; government control by the monied elite; the exploitation of global labor; monopoly/monopsony; and regulatory capture… that is, the neoliberal economy.

Fortunately, and this is certainly something to be thankful for, two of three Dem frontrunners get it:  Senators Sanders and Warren have achieved the truly remarkable, the advancement of a progressive agenda that would have been unthinkable a decade ago.  Both Sanders and Warren lead the pack, polling far better than their centrist competitors (save one), by calling out neoliberalism for the abject failure that it is.  Afterall, any economy that leaves the bottom half of society left for dead (via failure to pay a living wage or benefits) is not an economic system worth having.  

Additionally, kudos and accolades to Tulsi Gabbard for bringing well needed attention to that most evil of cartels and their lackeys… of course, JMH writes of the military industrial complex and the US foreign policy establishment, respectively.

That these three progressive candidates have billionaires wetting themselves, and failed former political leadership gnashing their teeth, demonstrates that corporatism & neoliberalism are not only on the ropes but are no longer sustainable.  And so the fight is on: Plutocrats & their minions Versus The People.

In all fairness, these three candidates have had a little help in advancing a highly popular progressive agenda… for nothing preordains neoliberalism’s fall -  and the genesis of a fairer economy - than its practitioners.  Of course, I write of the C-Suite executives – and the billionaire class - who bring immense attention to neoliberalism’s corruption on a daily basis… often w/ catastrophic results for the economy, humanity, the planet, and yes, even shareholders.

So without further ado, this year’s Neolib Darwin Award recipients, the companies & their management teams who place profits before all… even to their own company’s & shareholder detriment.

Boeing:  Nothing screams diseconomies of scale like the 737 MAX.  The plane, and the Boeing management team, are responsible for taking hundreds of lives.  All these many months later, the aircraft is still grounded (apparently, will remain grounded for many months to come).  The corrupt management team that brought this albatross to market attempted to scapegoat pilots for Boeing’s defective aircraft.  Not only has Boeing caused irredeemable reputational damage to itself, but the monopoly has completely discredited the FAA.  No airline, or country in the world, will gaze upon the FAA again w/out questioning the regulator’s credibility.  Gee, if any American was responsible for manslaughter or involuntary manslaughter - for a single individual, let alone hundreds - they’d see real jail time; but instead, the Boeing C-Suite Execs are likely to continue to collect tens of millions in compensation.

Purdue Pharma:  This company and its owners – w/ a little help from their friends, other Big Pharma companies, the US Congress & the FDA – delivered to America a national opioid pandemic.  A pandemic that is estimated to have cost 400,000 Americans their lives and that number continues to grow.  Meanwhile, the rapacious billionaires who ran the company into the ground have offshored billions in blood money.  Essentially liquidating their own company, before America woke up to the mayhem and slaughter caused by the Sackler family.  But fear not, America’s crony courts will likely leave the Sackler fortune intact and the responsible Big Pharma companies fully operational to kill, loot, and pillage again.   When Big Pharma isn’t stabbing Americans in the back with ever escalating drug prices, they are busy getting away w/ premeditated murder.  And yet, not a single Pharma exec has entered a jail cell.

Uber:  Uber defines labor exploitation and has deemed their employees to be independent contractors.  That’s so Uber can escape paying payroll taxes, providing workers’ compensation insurance, and even a competitive wage.  Hence, placing greater pressure on our heavily indebted country’s social safety net & the American taxpayer.  The labor trend established by Uber has become so ubiquitous, among Silicon Valley’s capitalist and the private equity set, that economist have named an economic system after the ride hailing giant, the Uber Economy.  Not so ironically, this Unicorn has never made a dime, nor is it likely to do so anytime soon.  And no few in number courts, global governments, and more than a few politicians have decided that they don’t want to support this business model, which might explain why at least one of Uber’s owners is dumping billions in stock.  Now, there’s a bellwether for failure and a ringing endorsement for exploitation of labor, as defined by the Uber Economy.  It may be time to short Uber stock.

Westpac: Not all evil originates from US multinationals.  The neolib economy is global, and that means corruption spans the planet.  Take Westpac for example.  Westpac is Australia’s number two lender and was recently caught engaged in 23 million money laundering transactions, including transfers related to child abuse.  The American born CEO of Westpac, per Reuters, told his staff that it would all blow over – demonstrating the height of arrogance – before he was sacked.  Of course, we could replace Westpac, as sure as the sun rises tomorrow, with any Wall Street bank, when it comes to what appears to be nonstop criminal activity.  So little has changed since 2008.  In fact, if anything Wall Street and the bank majors have only become more emboldened & nefarious, in the avarice they direct at the citizenry by the minute.  And just as we can count on major multinational banks to engage in all manner of criminality, we can expect owned regulators to slap fines – many years later – on these same banks that have no material impact upon bank earnings worth billions and billions.  Do these apex predators see jail time?  Not under the centrist/neolib regime.

Apple, Exxon, Facebook… the results of the slow-motion train wreck that is neoliberalism can be seen daily in the nation’s papers and the ruin they wreak upon the economy, democratic government, the planet, and our civil liberties.  The economic fallout: a lack dynamism; stunted innovation; a drag upon the economy and growth, by rent seeking multinationals; tax avoidance on a scale that only can be described as malice; fewer jobs and opportunity; and global governments so weighed down by debt that central banks have adopted monetary policy designed to keep the whole house of cards afloat.

The profits before all ethos, and the growth at any cost mantra (despite declining population and demographic trends) are leading crony capitalism and neoliberalism to a very bad end.

And for this, the unmitigated greed of the billionaire & monopolist class, we should be grateful.  For it is their very greed that will bring an end to neoliberalism and eventually, bring reform and the progressives to power.

Copyright JM Hamilton Publishing 2019

Corruption, Faux Civility & Monopolies...

Corruption, Faux Civility & Monopolies... 

And if you gaze long into an abyss, the abyss also gazes into you.

-       Friedrich Nietzsche

-        

By JM Hamilton 11-16-2019

Our society is mired in corruption and we’ve grown numb to it.  Here in America, corruption is codified (written into the law) and so omnipresent that we’ve become inured.  It’s the background white noise of exceptionally low expectations that makes slaves of us all.  The billionaire class has rigged the system so nefariously  -– fiscal, foreign, judicial, monetary, regulatory, and tax policy capture -– that it would take an army of Elizabeth Warrens and Bernie Sanders', perhaps a decade or more to resurrect & restructure the economy and the government (so that it serves the people, not just an elite few).  That assumes Congress and SCOTUS are willing to be something other than obstructionists.  That doesn’t mean that we give up, however.

At the top of the list of the darkest of hates: rent seeking monopolies and utilities have come to dominate the American economy, and w/ there financial might own the government.  Some of this blog's earliest pieces inveighed against cartel and oligopoly (read here and here).  And in an April 2015 piece, Fear and Loathing at the Clinton Foundation, JMH wrote: “… there is no greater threat to America, her economy, and free enterprise, than monopolies and cartels.”

That’s why it was so refreshing last week to see both the NY Times and the Washington Post come out w/ opinion pieces on economist Thomas Philippon’s new book,  The Great Reversal: How America Gave Up on Free Markets.  In his new book, Professor Philippon asserts & documents that free markets – defined by competition – and originally championed by America - have become a defining European economic characteristic.  And conversely, America has forsaken competition, and has adopted – a once well-established feature of European economies - monopoly and oligopoly.  Ironically, monopolies are privately held utilities - where the means of production are placed into the hands of the very few - and define socialism by private proxy.

Odd how the billionaire class becomes upset when socialism – Medicare, Medicaid, or Social Security – benefits society at large.  However, this same billionaire class has zero issues with socialism, when the US government authorizes & underwrites: the creation of predatory monopolies; Wall Street banks are bailed out; corporate welfare is bequeathed by our bankrupt empire; and the Federal Reserve inflates and backstops markets. 

All of which, makes the kleptocracy, who thrive from the redistribution of wealth to themselves, wealthier than the pharaohs.

The NY Times and Mr. Philippon estimate that monopolies cost the average American $5,000 a year in rent seeking expense, that is to say, the costs of goods and services would be considerably lower and more innovative, if cartel, monopoly, and oligopoly hadn’t come to dominate the American economy.  Throw in both real and social costs passed onto society by these same utilities (see Big Pharma and the opioid pandemic), the opportunity costs of austerity forced down the throats of 99% of society (by the billionaires and their congressional lackeys), and an educated guess is $5,000 doesn’t begin to cover the exogenous and endogenous costs, generated by cartel & monopoly.  Not to mention a pending planetary apocalypse, and the annihilation of humanity generated by another cartel, Big Oil.  Some things are priceless.

Interestingly enough, some billionaires say they get it.  The crony system the plutocracy has created – the enlightened acknowledge – has been a disaster.  The profits before people & planet ethos has paved a highway to perdition.  Trickle-down is a disaster because the elite don’t spend the money, but rather invest it in rent seeking ventures, like monopolies & private equity …  meanwhile, as the last several decades have shown, very little is trickling down to the people.   Hence, the rise of populism, which is, ironically, destabilizing the very rigged markets the elites worship.

And the last decade has revealed the true nature of central banks.  By adopting a low interest rate regime, issuing massive sums of debt & liquidity, and expanding their balance sheets to prop up financial institutions and inflate stock markets & asset classes…  central banks are complicit in contributing to a debt bubble, the plutocracy's continued rise, and allowing politicians to ignore catastrophic public debt.  (In short, if central banks raised rates – a la Volcker – it would force politicians to deal w/ the public debt crisis.)  The inflating of asset bubbles and the wall of money created by central banks - none of this is written into the Fed’s or central banks’ mandate - all fall under a deus ex machina: price stability.

The bottom line: central banks serve banks, the billionaire class, private equity, and utilities, exclusively, and are key to the trickle-down economics many billionaires are coming to realize is a disaster in the making.  It wasn’t that many years ago that a Mr. Bill Gross (of PIMCO fame) indicated that economies and markets may eventually face a financial supernova.  The pile of negative yield debt has only grown more catastrophic & insidious, since Mr. Gross issued that warning.

Other billionaires have gone megalomaniacal, drunk upon their own power and the idolatry generated by their coterie of sycophants that cater to their every whim.  These plutocrats, many engaged in predatory speculation and mere looting, really believe the world and the planets rotate around them.  Stephen Schwarzman once compared a tax increase proposed by the Obama administration to the Nazi march across Europe.  Other billionaires – seeing the writing on the wall and the progressive wing ascendant w/in the Dem Party - have entered the presidential campaign fray.   This, of course, reeks of desperation.

Increasingly, Americans are waking up to the fact that the enemy is not their brothers and sisters - of differing genders, nationalities, and skin tones - but rather, the elite at the top of the Ponzi scheme.

And yet, the Dem incrementalists – despite the civil war surrounding the Obama years – insist that we join hands and sing kumbaya with the corporate zealots and the plutocracy’s errand boys & girls: the GOP & centrist Dems.  We must be civil, the establishment intones.  

But as recently pointed out by Sarah Kendzior on Twitter:

There’s an insistence that we play nice.  But there’s a difference between nice and good.  What we have to do now is do good.  Be morally sound instead of valuing ‘civility’ above all else.  Civility is a cloak for corruption.  - @gaslitnation

W/in my lifetime, we’ve seen civility worn like a cheap suit jacket over the shoulders of American presidents & assorted political opportunists.  The very civility & failed centrist orthodoxy that has consigned this nation to endless war and multi-trillion national debt (while giving the shaft to the bottom half of society & labor).

In short, the time for civility has come and past … it’s time to build a body of law concerning white-collar crime and prosecute and incarcerate sociopathic billionaires and C-Suite denizens, when and where appropriate.  It seems, in most cases, that behind every great fortune is either a great crime or a monopoly; and the economy is littered with industries that desperately need to go the way of the buggy whip or are in need of serious reform.  It’s time to demonstrate that political malpractice & white-collar crime not only does not pay, but they often have far more serious consequences & repercussions for the economy, the planet, and society than the crimes perpetrated by ordinary Americans.  And it's long past time to break up cartels and monopolies, which are nothing more than organized crime.

It’s time to place Sanders or Warren in the White House; and it’s time to go to war on right-wing centrism and the advocates of a faux - civility/faux - responsibility first mentality.  After all, the plutocracy has been waging war against everyone but themselves, since time immemorial. Many failed leaders – worried about their legacies – are admonishing progressives that they must be “realistic.”   But what’s more realistic: doubling down on failed neolib/neocon policies and watching populism boil over; or rebuilding a country & economy – as many billionaires acknowledge needs to be done – that works for everyone?

The political center – the kleptocratic agenda – has little more to offer Americans than failed trickle-down policies.  It’s a dead end.  True, there are still many Americans with a vested interest in the status quo, and failed centrism.  A group of citizens that will become an ever-shrinking minority, as automation, AI, globalism, monopolies, and private equity continue their march.  

Those with a vested interest in the status quo (indeed, all Americans) - outside of the billionaire class - must be protected, while the economy & society are rebuilt for a better future.  It’s absolutely critical.  To ignore any human is to ignore them at our, collective, peril. 

Copyright JM Hamilton Publishing 2019