I have great respect for the free market system though I grew up in a country unafraid of the occasional brush with socialism.
The US, on the other hand, prefers to let the markets rule, though who knows what would have happened had the federal government not intervened effectively in the financial and economic crisis of the past five years.
Where needs must the devil drives, you might sigh, and the less government the better! But no matter what your ideology, you have to wonder how we ended up with an economic system so seriously out of whack?
Despite the unemployment rate remaining unconscionably high, large companies are making money hand over fist and sitting on mountains of cash. Apple has so much in reserve that they could buy every person on this planet a $20 dinner and still have a wad left over to toast us all with some top shelf champagne!
There’s something intrinsically wrong with this scenario, particularly when the $137 billion they currently have in pocket is projected to grow to $170 billion within the year.
And it’s not just Apple: Microsoft, Google, Pfizer, Cisco and a host of others are hoarding almost unimaginable amounts of cash at a time when common sense – patriotic or economic – would dictate that some of these reserves be invested in job creation.
But why bother investing in America? Steve Jobs himself thought President Obama hopelessly naive for suggesting that a portion of Apple’s overseas manufacturing be returned to the US. Bigger profits are, after all, the name of the corporate game and much more likely to be realized in lower wage countries.
That may, however, be changing. With American productivity soaring, there’s less need for workers, leading to greater competition for jobs and thus lower domestic wages.
The question is – when are Americans going to wake up to the new reality? This is no longer your father’s capitalism; rather it’s a new corporate system where super-executives are paid in the millions while everyone else scrambles to scrape out a decent living.
Politicians have been slow to curtail the new order since both parties are dependent on the financial crumbs falling from corporate tables. This was highlighted when Mr. Jamie Dimon, CEO of JP Morgan Chase, lorded it over the Senate Banking Committee’s members as they sought to make sense of the multi-billion dollar trading - aka gambling - losses incurred by his company. The senators’ obsequiousness is understandable, however, given that the bould Jamie controls millions in annual campaign contributions.
There’s little sign of the corporate noose loosening. With the housing market rebounding unemployment rates will inevitably creep down towards “acceptable” levels, but most new jobs created will be low paying. According to the New York Times the preferred new worker is a “22-22-22” - a twenty-two year old college graduate who will work twenty-two hours a day for twenty-two thousand dollars per annum.
What to do? Well, the first step is to figure out how democracy should deal with the new economic reality. Both Roosevelts dealt with comparable crises in the course of their presidencies, is it too much to ask that the President, Congress and the Supreme Court provide us with some safeguards from a rapacious corporate culture?
Corporations and their executives must be made realize that they are partners with US citizenry – not its masters. A little fiscal carrot and stick might help: overseas profits should not need repatriation before taxation, while socially conscious companies could be rewarded with tax breaks for investing stagnant cash reserves in job creation.
We, as consumers in a viral, social-media culture, should also appreciate that we wield considerable power – a boycott of companies who think only of their bottom line would work wonders in refocusing corporate goals.
But first things first - we need to recognize that we have drifted into a new economic world order that has little interest in our welfare or that of our children – only then will we come up with the appropriate solutions to this growing threat to the common good.