This commentary was written
in 2005 and published in my book by the same name. You
can purchase the book Here.
of the dire consequences of
the Bush administration is the acceleration of what I would
call the cannibalization of the American economy resulting in
the destruction of real wealth in its many forms.
This did not start five years ago, but the acceleration
is now hyper.
process goes largely unreported because results are not
directly reflected in national income accounting.
What allows this to happen is sleight of hand
propaganda and accounting coupled
with the fact that principles of economics are not widely
understood by the general public.
of the great tragedies of our time is the fact that US
citizens have been brainwashed over a period of many years
into thinking that capitalism is equivalent to democracy.
It is not. Capitalism
is an economic system and democracy is a political system.
If you look at China and how it is transforming itself
into a real powerhouse, you can begin to understand that
totalitarianism and capitalism can coexist very nicely.
are not democratic institutions and when corporate power
marries political and military power, what that invites is
fascism... which seems to be the path we are now on.
But there is a cost to all of this even though those
who are drunk with power don't understand or care about that.
Their drunken stupor might persist long enough to
destroy an entire civilization if we let them.
wealth is that which adds to the quality of life.
Clean air, clean water, a warm place to sleep, having
food on the table, and being in touch with loved ones are
aspects of real wealth... and so is freedom from avoidable
diseases, unnecessary stress, crime and insecurity.
In other words, those things that provide human beings
with a true sense of security, well-being, and freedom are the main
substance of real wealth.
how is your government and the global economy affecting your
real wealth? Well
some of the choices being made on your behalf can add to your
wealth in one context and destroy it in another.
For example, spend your tax dollars on some weapon
systems and they might
offer insurance against an enemy attack.
Spend money on weapons we will never need or use in
order to provide jobs or to pay off political debts to
unscrupulous individuals and corporations and it
will rob those who pay taxes, those who get the jobs, and
those who might have received something of value had the money
been spent on something else.
you might ask, how can having a job rob someone?
It can by having that person waste a lifetime of hours
doing something meaningless when they could have been doing
something useful with their time instead.
This robs them of their dignity and the experience they
might have had if, in those same hours, they had been employed
adding something meaningful to life.
Dignity is not an economic term and you won’t see it
listed on a balance sheet even though it is an attribute of
corporation to postpone the installation of anti-pollution
devices, might bolster corporate profits, but it is also
likely to diminish the wealth of everyone who lives
added profits will show up as positive numbers on the
company’s balance sheet and on the government’s GDP
report. But the
real costs will not be measured or show up on any official
document of either institution.
fact, to later clean up the accumulated mess that results
might require relatively huge amounts of resources, which
economic activity will then also be added to GDP even though
the entire clean up effort would have been unnecessary had the
original anti-pollution devices been properly installed in the
savings that would accrue to a corporation in such a case will
likely never balance out the real long term cost.
This is the squandering of real wealth and it takes its
toll on real people who otherwise might have lived sustainable
lives had those economic resources been properly spent in the
first place, with the surplus invested at improving education,
health care, or any number of other socially beneficial
endeavors. And of
course if the product or service that the corporation was
involved in was really of little use or social value anyway,
the result is even more tragic.
what does GDP mean really in terms of real wealth.
Nothing… in fact it is now more likely to mislead, misinform, and
when we spend billions of dollars on uncalled for tax cuts or
on military adventures and weaponry, which then proliferate
around the globe causing death and destruction everywhere,
while at the same time diverting funds away from the building
of adequate levies around New Orleans, for example, we are
left wondering why are we so far in debt?
And how come we have to rebuild an entire city now when
some of that money could have been used to keep the city dry
and the rest used to help the poorest of New Orleans’
citizens become independent contributors to society?
American economy is mature now, home of the world's largest
economy as a whole can be expected to grow perhaps at a
sustainable annual rate of 3-6%.
But the investment community is looking to invest in
corporations that will grow 15-20% per year.
There is tremendous pressure on executives to meet
these targets. How
are they all going to do that year after year?
Well most can't... at least not without cheating...
a corporation’s true function in life, and the reason they
were granted a charter to do business in the first place, was
theoretically so that they would contribute something of real
value to the economy and to society.
growth accrues through innovation, improvements in efficiency
and ends with consumer wealth and satisfaction... what we used
to call progress. You
find examples in every industry, but it’s becoming harder
and harder for most companies to be good corporate citizens
and still grow at these high rates.
computer you buy today is vastly superior to what you could
have purchased just ten years ago.
You can get several thousand songs on a portable player
that can fit into the palm of your hand.
A telephone now weighs just a few ounces, can go
anywhere, and doesn't require a hundred thousand telephone
poles and a million pounds of copper to complete a call to
your mother. These
are examples of what progress and the accumulation of real
wealth looks like.
if a company has to cheat in order to grow... if it actually
produces a net loss to society... that's not real growth.
That’s just a stealth transfer of wealth from the weak and
vulnerable to the rich. So
when a corporation installs TV sets in schools where they use
stealth advertising to promote unhealthy foods or other
products to impressionable youngsters who then develop
lifetime consumption habits that will shorten their lives,
increase their medical bills, dim their intelligence and
corrupt their values... that might look good on some corporate
balance sheet, but it leaves society with such unimaginable,
immeasurable and unmanageable costs, that if we
directed all of our available resources to make up for the
losses incurred, we would never have enough money to do it…
and we don’t. This
is an example of an economy and a society cannibalizing itself
in the pursuit and production of illusions.
are devouring our accumulated wealth right under our noses.
When corporate executives don’t have the talent, the
courage, or the integrity to grow their businesses “the old
fashioned way” — by earning it through innovation,
dedication, and simple hard work — but instead look for
short cuts, like using their resources to corrupt the body
politic or engaging in questionable marketing schemes in order
to gain special undeserved favors and incentives, every aspect
of society is diminished.
When an executive’s life becomes the pursuit of
bottom line goals at any cost, rather than simply contributing
to life through the successful production of goods or services
that add something tangible to life, real wealth is inevitably
what do we have now? What
we have are once-forbidden and socially undesirable mergers
taking place, resulting in a reduction of competition,
innovation, and real value added services.
Which is to say, real wealth is being destroyed.
Real wealth has physical as well as social and
spiritual attributes. The
media, for example, has the potential to educate, facilitate,
and inspire society in its pursuit of real wealth.
But now instead, we have radio station owners, for
example, who own more than a thousand stations where they
broadcast dumbed-down news and programming that replaces the
public’s need to know with their own selfish desire to grow.
forms of mainstream media, now owned by big corporations, are
also engaged in this same destruction of the public wealth.
They’ve lost their ability to function as the vehicle
by which we as a people can find out what we need to know and
understand in order to maintain a vibrant democracy.
We have instead a military-industrial-corporate-complex
dominated government that is now powerful enough to corrupt
this media and also shape foreign policy… and they use that
power not for the good of our country or humanity but rather
to accumulate even more power for themselves and to transfer
more public wealth into their own coffers.
happened when capitalism married government and gave birth to
defective offspring. Like
church and state… when you fail to keep Capitalism and
Government separate... what you get is the corruption of
both... and freedom, democracy, and real wealth is sacrificed.
In fact, what I am describing is the destruction of a nation
as we thought we knew it... the slow but accelerating decay of
its infrastructure and social fabric.
We are a super powered political economy intent on
consuming itself. If
allowed to continue, eventually the decline in real wealth
could make most of us so poor, economically and socially, that
we will no longer recognize the country we now live in.
now have in America more millionaires than ever before.
But among the rich nations of the world, the real wealth of
most Americans lags behind most if not all of them… higher
infant mortality, lower life expectancy, higher cost and lower
availability of health care, poorer health, less financial
security, more criminal incarceration, a failing educational
system, unfair tax policies, extreme gaps between the rich and
poor… all the result of a corrupt system that is destroying
the real wealth of most Americans.
system is broken. Only when enough citizens begin to
understand where, how and why... will we really try to fix it.
link will take you to my basic strategy for fixing it: