Esoteric Dissertations from a One-Track Mind

June 27, 2008

Welcome to Corporate America

Filed under: capitalism, politics — Tags: , , — codesmithy @ 9:01 am

There have been three items in the news recently that at first look distinct, but nevertheless related.

  1. The reduction in damages for the Exxon Valdez Oil Spill
  2. The FISA “compromise” and telecom immunity
  3. The failure to close the so-called “Enron Loophole”

First, there was the supreme courts decision to reduce damages by 1/10th the original amount, from $5 billion to $500 million.  As The Seattle Times states, Exxon’s profits were $40 billion for the last-year.

Punitive damages are the only way to curtail corporate negligence, make them internalize the costs.  As The Seattle Times editorial states:

A 987-foot oil tanker runs aground after its captain turns the helm over to an unlicensed subordinate and leaves the bridge….

Thirteen-hundred miles of Alaskan shoreline are fouled, an estimated 30,000 birds are killed, and the rest is brutal history.

The potential for disaster was there. Exxon knew Hazelwood had a drinking problem.  The jury found that the institution had its own dereliction of duty and fined it for its inability to prevent this disaster.  But like most corporations, they fought it.  And after years of fighting, they won.  The people die, the corporation lives on.  This is what passes for justice in Corporate America.

Next we have the FISA compromise, although Obama might consider the prosecution of the telecoms as secondary, I see it as primary concern.  These corporations knew, a priori, that they were breaking the law by allowing government wiretaps.  However, the executive branch went with the carrot and stick approach.  Those that helped the government spy got contracts.  Those that didn’t got prosecuted, like Qwest’s Joe Nacchio.  Now, after a heroic struggle to uncover the wrongdoing, Congress comes in to save the phone companies for their complicity in the misdeeds.  The executive branch gets to say the magic words and the lawsuits are dismissed.  Congress wants to substitute its own ineffectual oversight mechanism.  The prime reason it is so ineffectual is because impeachment is off the table.  The executive only has to resist and obstruct, meanwhile Congressmen of the supposed opposition party lie to their constituents and quickly try to let all players effectively off the hook, but especially the corporations.  This is what passes for justice in Corporate America.

Finally, we have the “Enron loophole.”  One has to be borderline retarded not to see the relationship between high gas prices and the record profits the oil companies keep raking in.  Much like the Calfornia energy crisis caused by Enron, it would not be surprising to find some market manipulation.  To be sure, global demand and a falling dollar are both playing a role.  However, market manipulation is playing a part also.  As Enron proved, energy companies couldn’t care less about the broader economy.  Enron didn’t implode because of their energy trading, they imploded because of the patch work of financial instruments they employed to hide mountains of bad risks from the balance sheets.  Manipulating the California energy market was remarkably profitable.  It just goes to show how deeply unprofitable the rest of the company turned out to be.  Right now, we are allowing a huge wealth transfer from the working people of this nation to the stock-holders and primarily the executives of oil companies.  America’s continuing oil dependence is disappointing, but, right now, American citizens are being taken to the cleaners for record profits of oil companies.  This is what passes for justice in Corporate America.

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