Four Hundred Thousand

Four Hundred Thousand

Kill one man, and you are a murder. Kill millions of men, and you are a conqueror. Kill them all, and you are a god.

-       Jean Rostand

By J.M. Hamilton (9-7-2019)

Remember the name Alvin Kennard.

A name my readers are more likely to be familiar with is the Sackler family.  Yes, those Sacklers…  owners of Purdue Pharma, and the monsters who are said to have created & pushed a national opioid pandemic (via their blockbuster analgesic, OxyContin).

No fewer than 400,000 are said to have died over the last two decades, while the privately held, Purdue Pharma, raked in billions in profits.  By the time doctors and authorities realized that the palliative, OxyContin, was not as originally marketed, but rather, a highly addictive killer – and medical professionals started cutting back on prescriptions – the addicted turned to heroin and fentanyl with highly predictable results.

Four hundred thousand dead and counting.

Let that sink in… and by way of comparison: 620,000 American soldiers are estimated to have died in the Civil War; 405,000 American soldiers estimated in WWII; 116,000 dead American service personnel in WWI; and nearly 60,000 US war dead during Vietnam.

Somebody should warn the profiteers & warmongers at the DOD/MIC, as well as, America’s enemies… they have competition.  That competitor's name is Sackler.  Per the CDC, the Sackler manufactured crisis cost the American economy nearly $80 billion, per annum, in lost productivity, healthcare, and via the criminal justice industrial complex. 

Please remember this $80 billion figure when our crony US courts begin handing out obscenely small fines, to the perpetrators of this artisanally crafted form of American genocide.

With great power comes great responsibility.  American multinationals have seen their power grow extensively over the last several decades.  Power, among US multinationals, has grown in ways too numerous to count, but let’s try anyway.  There’s the buying of elections, via Citizens United.  There’s government and regulatory capture, whereby the US Congress and regulatory agencies are afraid to act in any manner to protect small to mid-sized businesses, the consumer, labor, and the economy – from oligopolistic & monopolistic predations - for fear of upsetting the donor class (i.e. high-net-worth-individuals & multinationals).  Antitrust enforcement?  Forget about it.  M&A and industry consolidation has skyrocketed, enabled by the Fed’s ultra-accommodative monetary policies.

The least understood, and perhaps the most powerful branch of government, The Federal Reserve, seemingly, has a slavish devotion to Wall Street banks & private equity, financial markets, and inflating asset classes for the plutocracy… but everyone else is not so fortunate, as wage & wealthy inequality climb ever higher (In fact, the Fed is, arguably, directly responsible for wage deflation; a period of highly accommodative monetary policy has certainly coincided, if not correlates, with ordinary Americans' diminishing fortunes).  Large scale businesses are nearly always given the benefit the doubt, and a regulatory pass, all too often w/ detrimental outcomes:  See Big Oil; Big Tobacco; Monsanto and its top seller, Roundup; Wall Street banks and private equity; Boeing and the 737 MAX; and the criminal law industrial complex & private prisons (just to name a few examples).

The growth in corporate power & earnings has not been accompanied by greater accountability.  Responsibility seems to be missing w/ the extraordinary power afforded these leviathans, and corporate criminal conduct & social costs are nearly exclusively passed on to our bankrupt federal government & the taxpayer.  And as crony capitalism, industry consolidation, AI, globalization, and automation have done quite a number on job creation… and as we saw w/ the 2008 Wall Street crisis, many of these organizations are considered too big to fail, and their management teams too important to jail. 

This has to end, if large scale business is to redeem itself in the eyes of America and the world.

Now comes word that the Sacklers want to strike a deal.  They want to retain a personal fortune estimated at $13 billion but agree to forfeit Purdue Pharma ownership. They want at least 2,000 lawsuits, brought by various state, local, and regulatory authorities, consolidated at the Federal level.  The Sacklers are offering a $10 to $12 billion settlement, in which they will kick-in between $3 to $4.5 billion, in part, predicated on the eventual sale of a Cambridge, UK based, Mundipharma (a pharmaceutical company also owned by the Sacklers).

And there’s the rub: The Sacklers want to continue their opioid racket outside the US, utilizing their foreign based multinational.  Several state level AGs aren’t having it.  Meanwhile, the NY Times and CBS News report the Sacklers have been syphoning off billions in cash, from Purdue Pharma, and sending same offshore through a byzantine web of companies, LLCs, trusts, and landholdings.

It’s all very interesting, and will soon, undoubtedly, be a case study w/in MBA textbooks throughout academia.  The Sacklers and Purdue Pharma define: The Neo-Gilded Age we are living through, the greed is good mentality, and the profits before all ethos that the Business Roundtable recently denounced.

So how does a society stop this behavior, this pathological illness?  What can be done to set an example & a precedent, so that future Sacklers don’t rack up a body count that makes global war & homicidal dictators look tame, or Wall Street greed doesn’t destroy the global economy, again:

1)  Surrendering all their business holdings is a great start.  JMH is not a fan of nationalization, per se.  Better that Purdue Pharma be set up as a not-for-profit, and remain out of the clutches of government and corrupt politicians (as reported in the NY Times, and many years later, only a small fraction of the multi-billion-dollar Big Tobacco settlement has found its way to educating the public on tobacco related health risks ... and only 5% of the billions allocated for smoking cessation programs has been spent).  Give the renamed Purdue its mission statement and objectives and let ‘er run for the benefit of all (but particularly the victims and their families).  As a writer in the American Prospect suggested, perhaps competing against other pharmaceutical companies, by selling generic medicine at cost.

2)  Criminal charges must be brought against the Sacklers.  What they did is nothing short of mass murder.  Here, there’s safety & strength in numbers & pooled resources.  If enough district attorneys & AGs band together and bring criminal charges… it will send a real message that nobody is above the law.  The Sackler family – up to eight are said to have served on Purdue Pharma’s board, at one time – need to spend the rest of their lives in jail.  Hanging, quite simply, is too good for them.  Of course, round the clock surveillance will be required for these prisoners… after all, we don’t want them pulling an Epstein (or find prison officials caught sleeping on duty, while an “Epstein event” occurs).

3)  All the Sackler family wealth is forfeit.  That is every penny, every euro, every gold ingot, every security/bond, each and every scrap of land forfeit and redistributed to the victims’ families.  Unfortunately, the Sacklers not only looted Purdue Pharma – undoubtedly, in anticipation of their present date w/ destiny - but they sent nearly all the booty offshore.  Which brings us to recommendation number four.

4)  Offshore money is outside US purview, that is outside US judges’ jurisdictions.  So what to do, what to do?  Well, during the 20^th Century, world governments thought it important enough to start up an international tribunal to handle crimes against humanity, genocide, war crimes, and crimes of aggression. Perhaps it’s time to establish an international tribunal against corporate crimes against humanity?  Such a tribunal would have jurisdiction over all states & multinationals and have the ability to confiscate blood money and ill-gotten gains from any financial institution, haven, or jurisdiction in the world, as well as, pass judgement and sentencing for criminal conduct.  If found guilty, clawback provisions for profits multinationals have distributed to shareholders would be key.   (Corporations and multinationals – via free trade agreements - have successfully set up their own rigged extra- judicial bodies, or arbitration panels, w/ which to attack national sovereignty… a manifestation of the profits before people ethos.  These panels will not do.)

 

It really is time to the level the playing field, globally, and set up a supranational court to adjudicate multinational criminal behavior, tax avoidance, and crimes against humanity, and w/ that establish a body of law.

The Sacklers are now social pariahs.  Academia, foundations, the humanities/arts, philanthropies… nobody will take the Sacklers’ blood money.  Their name will forever be associated with ignominy, and carnage & greed on a horrific scale.  (And what's really crazy, OxyContin is a valuable medicine in a doctor's arsenal to control & mitigate pain.  The Sacklers - yes, would have earned less - but all they had to do was effectively/properly warn society of the drug's addictive qualities.)

In a more perfect world, Alvin Kennard would have not rotted in an Alabama prison for more than three decades for stealing fifty-freaking-dollars. 

But what does one expect from a racist Republican state, like Alabama? 

Instead, in a more just society, the Sacklers will take Mr. Kennard’s place and serve the balance of their lives in hell, w/in the US penal system.

That’s the kind of justice Americans crave; that’s the kind of justice Americans are going to need to see, as the first steps towards real corporate and multinational accountability & reform: economically, governmentally, and judicially.

And given that the Business Roundtable has found its conscience… perhaps the nation’s brightest CEOs could advocate same?

It’s time for plutocrats – living in the shadows – to realize that they are not gods, but rather, mere mortals, subject to the rule of law & societal standards.  If anything, perhaps the ultra-wealthy should hold themselves to a higher ethical standard, in regards their business and financial affairs?

Copyright JM Hamilton Publishing 2019

Class Warfare

Class Warfare

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

-       In Class Warfare, Guess Which Class Is Winning – NY Times

By JM Hamilton (8-25-2019)

The Business Roundtable (BR) – a very-much-for-profit entity, consisting of the crème de la crème of America’s CEOs – came out w/ a public policy statement last week, which stood fifty years of laissez faire business ideology - and the profits before all ethos - on its head.

Instead – and obviously feeling the political sand shifting directly under their feet - the CEOs of the BR propose a capitalism that works for all stakeholders w/in American society. 

The BR commits to (read hear) among other things:

·      Delivering value to customers;

·      Investing in employees… starting w/ compensating them fairly (moreover, we foster diversity and inclusion, dignity & respect);

·      Dealing fairly and ethically w/ our suppliers;

·      Supporting the communities in which we work; and

·      Generating long-term value for shareholders … we are committed to transparency and effective engagement w/ shareholders.

The irony for any employee who has worked w/in a Fortune 500 Company surely couldn’t have been lost on anyone.  Employees are constantly told the importance of (indeed, evaluated based upon):  honesty, transparency, delivering excellent customer service, community philanthropy, and the achievement of departmental goals.  The meeting of said goals, directly & indirectly, contributes to keeping ownership or shareholders happy.

Failure to meet any of these expectations is, or can be, often grounds for termination. 

Which begs the question, why would the CEOs of the BR feel the need to restate the principles of capitalism…  unless of course, the C-Suite brass and the ownership class don’t play by the very same rules they demand of their employees and “stakeholders” daily?

That is to say, what has been business as usual in America – under a profits uber alles regime – for the last fifty years (?): not delivering value for customers; shafting employees; dealing w/ suppliers in an unfair and unethical manner; exiting communities, when another city is willing to provide greater subsidies & tax breaks for the new corporate headquarters; and stiff-arming shareholder requests for business plans & information (say, on how management plans on dealing with: climate change, or poisons - passing as products - issued forth by said company)… as well as, busting & closing down shareholder resolutions requesting greater change & transparency?

Well, in a word, “yes.”  If anyone tunes into Bloomberg or reads business news w/ any degree of frequency, the press is replete w/ stories demonstrating how America’s top businesses, all too often, behave in ways completely antithetical to society’s well-being (while profits and wage & wealth inequality soar). 

In brief, the BR’ new policy statement reminds us that the corporate aristocracy has been waging class warfare against the 99% for the last fifty years, and really amped up the blitz w/ the fall of the Berlin Wall.  It further reminds us of our two-tiered societal structure and justice system, often written about in this very blog.  The last fifty years is best defined by the rise of a Neo-Gilded Age, and directly correlated w/ that ascendency, a brewing and ongoing populist revolt.  That is to say, an economy, government, and justice system for the one percent, versus an economy, government, and justice system for everybody else.

Let’s pretend for a moment that this is actually something more than window dressing and platitudes.  One can be forgiven for being cynical.  Afterall, plutocrats have been wringing their hands - since the ’08 crash and their subsequent bailout by the Federal Reserve - and advocating reform (while often lobbying for the complete opposite behind closed doors, or via their K Street minions).

What exactly would the business & financial elite have to do to achieve the aforementioned goals?

Well, for starters, the BR would need to break up the monopolies and cartels many of the CEOs have ownership stakes in and run daily.  There’s no greater threat to community & democracy than unchecked power; and today, there’s no greater unchecked power than America’s cartel & monopoly economy.  Serious competition w/in US business sectors would provide the checks & balances that are entirely missing today (and that our owned government fails to provide), against the unprecedented economic power the CEOs of the BR wield.  And no, American businesses do not need colossal scale to compete on the world stage, contrary to what we are told daily.  Just ask Boeing.

So as to end fiscal, foreign policy, judicial, monetary, and regulatory capture (that is to say, creating a democratic government that responds to the will of the people, instead of an elite few), BR CEOs would, ideally, need to insist upon campaign contribution and political reforms, such as: term limits; limits to the campaign season; and caps on campaign contributions and spending.  Perhaps a constitutional amendment that would reapportion the Senate in a more representative fashion?  Since we're dreaming, popularly elected SCOTUS members, as well as, a popularly elected Federal Reserve decision making body, including, but not limited to, the Chairperson.

If we are truly going to protect the stakeholders in society, the CEOs of the BR are going to want to put a leash upon – if not altogether eliminate - ALEC, K Street lobbyists & the US Chamber.  It’s these bodies that often advocate policies and positions that no responsible company would be caught dead advocating in public, on behalf of their business patrons (that is to say, ALEC, K Street, and the US Chamber are paragons of the profits before all mentality that has crushed the American Dream and virtuous capitalism).

Since we are talking diversity and inclusion – dignity & respect – among all employees, that pretty much rules out supporting the GOP, which is xenophobic, homophobic, misogynistic and racist.  It’s hard to express & achieve the BR’s new goals and support the political party of bigotry.  Isn’t it?

And while we are placing the US and her communities first, the offshoring of jobs to save a buck, the Uber economy, treating employees as contractors & subcontractors… yeah, that has to go.  And the BR, if its genuine and sincere, obviously must see the need to provide equal pay, paid maternity leave, and a living wage?  Right?

How about investments?  Would we expect a reputable CEO and company to be hanging out w/ dictators and despots on the global stage… dictatorships who behave in ways completely antithetical to America’s, and American multinationals', professed values of freedom, human rights, liberty, rule of law, democracy and yes, even – often ignored – egalitarianism?  Doesn’t really work for CEOs to be seen w/ killers, like MBS and Saudi Arabia, does it?

And then there’s crossover investments, and board seats, w/in America itself.  Should the BR’s CEOs have investments w/ gun manufacturers, how about the ultimate earth killer, Big Oil… what about the MIC, which sells death and mayhem around the globe?   Not a good look, and entirely inconsistent w/ the BR’s renewed conscience.  How about tobacco and Big Pharma, which robs the public and the taxpayer, daily.  Perhaps the BR CEOs could recommend ending some of these industries, or current business practices of same, altogether?  At the minimum, boycott & divestment would seem entirely appropriate. 

What of accounting and tax fairness, simplification, and transparency?  There’s little doubt that such reforms would better serve America, her communities, employees, and yes, even shareholders (done properly, it just might spur aggregate demand).  How about a tax on wealth to mitigate the power of the ownership class, who make unseemly demands of BR CEOs… unseemly demands like taking out massive loans on the corporate credit line to finance dividends and stockholder buybacks?  This debt, if history repeats, setting companies up for failure, during the next economic downturn.  What better way to protect communities, employees, and in the long term, shareholder value?  

Limits on the amount of leverage applied to predatory private equity LBOs?  What better way to protect: bondholders, business, labor, stakeholders, and the American economy?

How about trade agreements that dispense w/ dictators, or that are tied to reforming nondemocratic regimes and improving democracy and human rights?  Such trade agreements just might mitigate the mass migrations we are seeing out of the world's authoritarian/totalitarian regimes & failed states.  What about fair trade agreements that mitigate labor, regulatory, and tax arbitrage, and give labor a seat at the table during negotiations?

Et al., et al.

Yes, let’s not be naïve, or take the BR at its word… but let’s be willing to suspend disbelief for a moment and imagine that these CEOs are, collectively, ready for real change.  It took fifty years of neoliberal ideology to create our present mess; it’s going to take a while – and perhaps a couple of progressive administrations – to unwind.

There’s, obviously, a great deal of money to be made in honesty, truth, and transparency (otherwise these smart business leaders wouldn’t be recommending these changes).  But w/in the short to midterm, the transition to a more compassionate & ethical capitalism, like that proposed by the BR, could prove challenging, indeed.  Perhaps the BR could backup their mission statement, w/ an action plan and a timeline?

At the end of the day, actions speak louder than a press release.

It would be presumptuous for JMH to assume to speak for all Americans….  However, my guess is the majority of Americans would gladly support the aforementioned reforms.

Would it be better if these leaders – and the ownership class - took these actions upon themselves, or wait for a nonviolent political revolution that insisted upon changes, perhaps even far more draconian? 

That’s the multi-trillion-dollar question.  Isn’t it?

After all, class warfare, ultimately, is bad for: America, business, capitalism, and profits.

Copyright JM Hamilton Publishing 2019