Corprations blackmail and terrorize communities

by Richard Mellor

Afscme Local 444, retired

There’s a fair amount of whining in the big business press today about this deal, or rather, almost deal with Iran.  We have a rare situation with an editorial in today’s Wall Street Journal thanking the French for blocking it. The Zionists are up in arms as they want to be the only nuclear armed power in the region and are calling on American Jews to put pressure on Congress. After all, the Iranians are the terrorists aren’t they, not like the US, spreading peace and democracy around the world for the good of humanity.

There’s all sorts of terrorism isn’t there.  The American revolutionaries were “terrorists” according to the British and we often hear that “One person’s terrorist is another’s freedom fighter.”. What doesn’t get too much attention and would never be described as terrorism is corporate blackmail. What I mean by that is the blackmailing of communities by the 1% and their corporations, that they won’t bring jobs to the community unless they get huge tax breaks and subsidies. One of the worst abuses is the building of sports stadiums and arenas; as of a year ago, the taxpayer’s footed some 71% of the bill on average according to Bloomberg BusinessWeek.

The owners of capital pit one community, one municipality, one state and of course one country against the other, throwing us in to competition for industry or jobs.  Taxpayers, or more accurately, the politicians in one of the two Wall Street parties, offer business free or cheap land, massive tax breaks and have even provided training and equipment to corporations of one sort or another in order to draw them to their constituencies.

Office Depot is threatening to leave Illinois at the cost of 2000 jobs if the company doesn’t get relief from paying state taxes.  With high unemployment nationally, the bosses are in the driver’s seat as the states compete to win their favors. The states are, “battling to lure employers, factories and stores” the Wall Street Journal writes, pointing out that Washington State is trying to come up with almost $9 billion in what they call “tax and policy incentives”.  Boeing has a production facility in North Carolina and there has been an ongoing struggle between the states for the work. North Carolina, a Right to Work (for nothing) state won out on a General Electric facility already this year.

It’s a bit of a catch 22 situation. Illinois has one of the highest tax rates in the nation after raising the rates in the aftermath of the crash and a fiscal crisis. It also has the second highest unemployment rate.  Companies like Navistar and Sears, which threatened to leave Chicago after 127,  years won some $500 million in tax breaks.  This is a company that had $40 billion in sales in 2010 the WSJ points out. Other corporations are threatening top leave Illinois if they don’t get a break.  The choice for some is Florida where the corporate tax rate is 5.5% compared to Illinois’ 7%.

What nerve when you think about it.  The coupon clippers/bankers caused the crisis, we bailed them out, they went and bought more banks with the money and refuse to invest, corporate taxes have to be raised to cover unemployment costs due to their crisis and they threaten to leave town increasing unemployment and poverty if the state doesn't back off.

Capital has no loyalty except profits; it is compelled to seek the best returns. Companies have relocated to the southern states for that reason and they have relocated to China for that reason and from China to Vietnam and Bangladesh.

This is economic terrorism.  Communities are decimated, wages and living standards driven downward and people lives shattered.  In Bangladesh of course, it is even worse as the thousands of deaths from unsafe conditions have shown. That workers in Bangladesh, mostly Muslim and women have waged street battles with company thugs and the police for better conditions, puts to rest the lie that women are timid and all Muslims terrorists. Similar battles have been taking place in Cambodia and Vietnam as production and the industrial working class has shifted from Europe and the US to Asia.

Workers built unions to protect us from competition and the madness of the market, not to facilitate it.  Like the Team Concept on the job (the philosophy supported by every major union official today) where workers in each industry try to outdo each other for who can work fastest and cheapest in order to help their bosses win market share from their rivals, the only result for us is a race to the bottom. The exact same process takes place when the corporations and their political representatives line their pockets through tax breaks, subsidies other forms of corporate welfare.  It’s simply privatizing profits and socializing losses.

The courts will never stop capitalists from moving their capital around simply because it inconveniences a whole community in the form of unemployment and decay; look at Detroit. That was made clear in the cutthroat competition for a GM plant between Ypsilanti MI and Arlington TX. Appeals to the courts fell on deaf ears as a capitalist has the right to do what he or she wants with their capital, society gives them the right.  They are sitting on trillions in cash when we need massive infrastructure investment and jobs but they're not going to invest it if the profits not there and their state machine won't force them.

This doesn’t mean that we don’t raise taxing the rich or a corporate entity at a higher rate, but without an independent political party of our own, we cannot even enforce that;  and even then, the only way to ensure that production is not shifted around depending on the profit margins and what they call maximizing value, is for the corporation to be taken in to public ownership and control.  The mood is such at the moment that its not easy to pass legislation giving corporation's tax breaks they are hated so much but they will find a way. The dominant sectors of the economy including the finance industry cannot be left in private hands if society is to progress because production and distribution has to be planned in a democratic collective (socialist) way. These industries should be taken under workers' control and management with compensation only in cases of proven need.

In other words, if a worker or community business person’s retirement or means of subsistence is tid up in shares of a corporation, these should not be taken in to public ownership, but the likes of Kirk kerkorian Carl Icahn or other wasters who make millions selling and buying shares that sometimes have devastating effects on workers’ lives and destroy entire communities in the process, this wealth becomes the collective property of those whose labor created it. How it is used can then be decided in a democratic way based on the needs of society and not for the bank accounts of the 1%.

Like all of us,  the coupon clippers deserve a secure, healthy and productive life and should be guaranteed it, something they refuse to guarantee the rest of us.