U.S. Corporations Are Destroying The Economy

By Michael Payne
Online Journal Contributing Writer
Oct 2, 2009, 00:12
Courtesy Of The Online Journal

Over the past three decades, this nation has undergone a transformation that is rapidly eroding the foundation of our economy. U.S. corporations have now taken the outsourcing of jobs overseas to such heights that the purchasing power of American workers is plummeting. Since consumer spending accounts for 70 percent of GDP, the effects of this continued outsourcing have been devastating to our economy.

What a vicious circle this is. CEOs eliminate workers’ jobs by outsourcing them to overseas nations. Workers go on unemployment or take lesser paying jobs. Their income and purchasing power is severely reduced. Reduced labor costs result in more profitability. But as time goes on, the sales of companies’ imported products suffer since the workers who readily bought these products now have to curtail their purchases. To maintain the level of desired corporate profits, CEOs outsource more jobs, lay off more workers, and close more plants. And around and around this goes in one gigantic vicious circle.

This is a very dangerous scenario. Looking at it from a very broad standpoint, if all corporations were banded together in one large conglomerate, they would eventually come to the conclusion that a continuance of their outsourcing practices and labor reductions would result in a classic example of the law of diminishing returns; that there would be a point at which the reduced labor costs from outsourcing would be totally negated by the decrease in consumer spending. Knowing this reality, the corporate conglomerate would be forced to back off outsourcing to save itself, with the full knowledge that it could not exist without the purchasing power of the American worker.

But, that is not going to happen in today’s America since we are dealing with thousands of individual corporations that are in direct competition with each other and they have very specific strategies and plans to increase their own profits. In other words, it is every corporation for itself in this rush to acquire more and more profits and lavish bonuses for CEOs; they could care less about other competing corporations.

Here’s a good example of just how bad this situation has become. Having problems with your computer, printer, or cell phone? Call the toll-free number of the company to get service support and you will be connected with a friendly customer representative in India, Pakistan, Thailand or who knows where. It was not enough for corporations to outsource factory jobs but now they have taken it a step further as they outsource lower level jobs. Is there any point at which this lunacy will finally stop?

The Obama administration and the U.S. Congress know full well what these corporations are doing and the effect that it is having on our economy. But they are doing basically nothing to address the problem and, so, it continues relentlessly.

What should they do in this situation? They need to develop strong, effective legislation to include two key elements. For those corporations that agree to set up programs to bring outsourced jobs back to America, they should be given appropriate incentives in the form of tax breaks. However, in the case of the corporations that will not cooperate and continue to outsource jobs, they must be assessed significant penalties through increased corporate taxes. This must be done just as soon as possible in order to stop the continued bleeding that our economy is suffering.

Even if President Obama and the Democrats finally realize what they must do in this dire situation, they will be faced with the same roadblocks that they are experiencing as they try to enact legislation to reform health care. It will be the same untenable situation whereby critical legislation cannot be brought to a vote in the Senate because of the constant threat of the dreaded filibuster by the corporate-controlled GOP.

I believe that we have come to the point that the party in power in the House, the Senate and the White House, namely Democrats, can no longer be stymied by the threat of a filibuster.

The filibuster is a U. S. Senate practice whereby a single Senator, or his minority party, can block full Senate consideration of a bill or nomination by extending debate on the proposal indefinitely. The resulting filibuster can ordinarily be stopped only by a “cloture” vote, which requires 60 of the 100 Senators (a supermajority) to vote to end debate, and bring the bill or nomination to a final vote.

Can the rules on the filibuster actually be changed? Not only can it be done but it already has been done. Most recently, in 1975, the Senate with a 61 Democratic majority lowered the number of senators to break a filibuster from 67 votes to 60. At that time Senate Majority Leader Mike Mansfield of Montana said, “We cannot allow a minority of senators to grab the Senate by the throat and hold it there.”

And this current Senate must do the same by wresting control from the minority whose only agenda is block any and all legislation that is not beneficial to corporations. What number of senators would be required to break a filibuster, when the rule is officially changed, will be based on determinations made by the Democratic leadership; but, in any event, it simply must be done.

Some may argue with this conclusion but I contend that this nation and its economic system are so dependent upon a solid manufacturing base that, without rebuilding it, we will not be able to return to economic stability. This president and this Congress must come to that stark realization, reject and overcome the power of the corporations and their lobbyists, and create effective legislation to deal with outsourcing.

There is no good alternative. If action is not taken, and soon, then corporations will continue sucking the lifeblood out of this economy until it collapses.

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