Monday, September 23, 2013
Corporate bureaucrats are robbing us blind!!
Corporations are currently passing on an enormous amount of non-productive expenses, many of which are only designed to benefit those at the top, to consumers. This wouldn't be possible in a competitive market where there was still a significant amount of factory direct and sincere small businesses could access supplies at reasonable prices.
Unfortunately that is no longer the type of market that we have, assuming that it ever was. We had something much closer to that thirty years ago thanks largely in part to the fact that people organized to stand up to corrupt corporations over the decades and reduced the concentration of power with the help of union and civil rights protests and and reform movements.
Then after a larger percentage of the public became complacent corporations consolidated into a relatively small number of Oligarchies, which used to be called Robber Barons. Since then they have sent bureaucratic expenses, that are designed to shift income from the vast majority to the richest people in the country, through the roof and expenses like manufacturing and services that actually benefit the public have been cut to the bone.
When considering whether jobs are worthwhile or not, under the current political end economic environment, there is little or no effort to consider whether or not these jobs actually provide a service that benefits people or whetehr or not they make things worse for people.
When jobs involves selling things based on fraud the customer doesn't get their moneys worth and it makes their life worse but the corporations still make a profit so they consider this good for the economy.
If expenses that benefit society were cut to the bone while expenses that are primarily designed to benefit only those at the top were sent through the roof then it would be a matter of time before the economic system would no longer conduct the most basic functions!
The inevitable result is the vulture charts indicating an enormous wage gap, that we have been hearing so much about, and incredibly low quality merchandise from stores, and unreliable services for many items including utilities and evens, on occasions simple home repairs, often because they can't get supplies as good a quality as they used to.
Contrary to what the media and the economists say or imply it is not more efficient to abandon factory direct options from quality long lasting American made products and ship the vast majority of products half way around the world through multiple subcontractors and replace them three or four times as often due to lower quality, especially when a higher percentage of the products are broken before they're even sold.
A list of growing bureaucratic expenses that these large corporations are able to pass on to consumers without providing a benefit for consumers would be long. The biggest ones as a percentage of their total expenditures would include shipping and distributing costs that have grown dramatically now that most products come half way around the world, advertising which has multiplied much faster than inflation and it has resulted in enormous profits. Other bureaucratic expenses that are also quite large although they might not be as much when calculated as a percentage of the GDP as single expenses would include marketing research, including a growing amount that is designed to manipulate children before thy develop critical thinking skill; analyzing sales to study consumer complacency; campaign contributions and lobbying expenses; legal expenses, including an enormous amount of trade secrecy lawyers to justify keeping all their fraudulent practices secret; public relations expenses; union busting expenses and many other expenses.
As I said some of these expenses might not be as big as shipping and advertising as a percentage of the GDP but the impact they have on the effectiveness of the economy can be large and when there are many different bureaucratic expenses they add up fast. One of the most obvious examples of this might be lobbying expenses which, although they are very large they're only a fraction of a percent of the GDP have an enormous impact on the regulatory system that goes well beyond their initial value and cost the public much more. These lobbying expenses are designed to provide benefits for those that control the lobbying effort but they can use their market power to pass on the cost to consumers although they don't pass on any of the influence with these expenses.
According to Open Secrets.org the amount of money spent on lobbying more than doubled from $1.45 Billion in 1998 to $3.55 Billion in 2010 when lobbying expenses peaked. Since then they have actually gone down a little, or at least it seems this way. 2010 was also the year that they made the "Citizens United" decision so now more of their campaign contributions can be done by organizations that don't report their expenses. We have no way of knowing if they're continuing to increase their expenses, one way or another, even though the reports seem to indicate a slight decline. They have been hiding expenses for so long that it would be unreasonable to speculate about the possibility that they might be reducing lobbying expenses while increasing other expenses that can now be done in secret.
None of these expenses provide any benefit for consumers; however since the economic system has been consolidated into a small number of hands they can add these expenses on to their products or services and consumers have no other place to buy their products or services without paying their prices. They create the appearance of competition by offering them from several different corporations but all these corporations pass on these expenses and they don't provide much real competition. Instead they often use an enormous amount of advertising to make it appear as if they're offering different products.
One of the simplest examples would be health care insurance which does absolutely nothing, directly, to provide health care; instead what they do is control the financing of the health care and they often use this control to influence the decisions that should be made by doctors and patients. They use money that they get from premiums to lobby to prevent people from hearing more about a possible Single Payer Health Care System that could work much better. The media collects money for these advertising so they have an incentive to withhold discussion about a Single Payer system and the politicians collect an enormous amount of money in campaign contributions from health care companies so they have an incentive to avoid discussing it. Candidates that do discuss it can't collect as much money and the media won't give them any coverage as indicated in the past presidential election when Rocky Anderson and Jill Stein both advocated for Single Payer Health but neither of them could get coverage or invited to the debates controlled by political bureaucrats.
Another simple example would be the amount of money that factory workers get compared to the amount of money corporations pay for advertising. Advertising is biased and doesn't provide accurate information to the consumer so that they can make informed decisions but the cost is passed on to them any way. And they pay much more for advertising in many cases than they do to the people that manufacture goods. The typical percentage that is paid for advertising from retailers could be anywhere from one to five percent or more in some cases; yet the workers in the sweatshops that make our products generally get less than one percent of the retail cost of goods. Manufacturers often also pay for advertising so the cost of that is also added to the price in addition to the amount of advertising expenses from the retailer. In one of the most famous cases Kathie Lee Gifford collected three percent of the price of her clothing line and the workers in sweatshops were getting a fraction of one percent. Advertising, whether it is from Kathie Lee Gifford or not, adds nothing to the value of the product except hype while the work that the manufacturers do creates the real value. Anyone that has paid attention to the quality of merchandise over the past few decades might have noticed that some common items are much lower quality. And anyone that pays attention to news about labor practices, especially from Wal-Mart, might know that they've been reporting many stories about their efforts to cut costs; what they don't mention nearly as often is that this results in lower quality.
It doesn't take a genius to figure out what is going on; they're spending much more money on ads to convince us we're getting quality products than they are to actually put quality in their products!
When was the last time you hired an economist?
The vast majority of bureaucrats including economists and many other professionals aren't hired by the majority of the public nor is there many if any ways for the public to hold them accountable; yet they control an enormous amount of the information that we make many of our decisions based on.
When was the last time you heard an economist, politician or a someone from the commercial media inform you that they've been sending their own expenses through the roof and that they have an incentive to withhold the information that you need to make decisions.
The vast majority of these people are not accountable to the public yet their pay comes indirectly from the public, since the oligarchies control the the economic system. Instead they're only accountable to corporate board members. In many cases the bureaucrats also add an enormous amount of waste for work that ahs little productive value even though the workers are doing sincere work, like shipping when it goes half way around the world. A modest amount of shipping and distribution is necessary even when it is combined with some factory direct; but excessive shipping and handling for the "globalized economy" is bureaucratic waste!
Our politicians have pulled a bait and switch; they have warned us about how we had to implement capitalism because the version of communism by the Soviets was dominated centralized government control of the economic and political system with little or no local control or input then they created a system with centralized corporate control of the economic and political system with little or no local control or input
I have written more about specific bureaucrats in the following blogs and will be following up soon with one about union busting consultants.
Copyright Bureaucrats do more to protect their own wages and control the distribution of educational information than they do to protect the income of writers.
Political Psychologist Are Suppressing Democracy by studying how to manipulate people with political ads and encourage them to base their decisions based on superstitions and stereotypes instead of their own best interests.
Why Do We Have Trade Secrets? Defense of fraud? trade secrecy laws do more to prevent the public from accessing the information they need to make consumer choices than they do to encourage innovation, which they actually discourage since innovators don't have access to the information they could use to innovate.
Santorum etal endorse Health Care Waste and Fraud; Even after the 2012 elections politicians have been doing what they can to avoid discussion about Single Payer Systems which work much better in many other countries but are hardly discussed in the US.
The following are some additional related articles or organizations promoting Single Payer Health Care:
Walmart rocks Parliament even after retail FDI vote Lobbying is integral to business, its legality a matter of perception: Experts "Lobbying is not the same as bribery, said a bureaucrat." Even if it accomplishes the same goal?
CEOs Plundering Corporate Coffers
Physicians for a National Health Program
Medicare for All
An Insurance Bureaucrat Speaks Out
In Corporate Hands, Health Care Bureaucracy Blooms