The Corporate Flaw

Corporations have a few advantages, and one of those advantages – limited liability – has slowly but inexorably also become the greatest flaw of the corporate culture. This means that shareholders may take part in the profits through dividends and stock appreciation but are not personally liable for the company’s debts… or for any crime or action taken in the interest of the shareholders. Generally, the law has also held that a corporate official cannot be held personally liable for an action taken in the best interests of the corporation.

In practice, that means that if a corporate official decides that a cheaper part is in the corporate interest because it will reduce costs and increase profits, so long as the part is not known to be defective, that official cannot be held personally liable if the part fails and causes multiple deaths. This is what happened in the Ford Pinto gas tank scandal or more recently in the 2009-11 Toyota “sticky” accelerator problems.

Over the years, as I noted in an earlier blog, California’s electric utility, PG&E, engaged in numerous unsafe and unethical practices which led to massive environmental problems and practices as a result of groundwater contamination with chromium six, and affected at least 2,000 residents with carcinogenic effects, effectively resulting in the almost total depopulation of Hinkley California, and costing PG&E over a billion dollars. In 2018, shoddy PG&E practices led to the Camp Fire, which destroyed 18,000 structures and killed 85 people, and required an $11 billion settlement with insurers. Yet in more than 20 years of environmental and technical problems, not a single official or executive has been held personally responsible, and now PG&E has filed for bankruptcy because it fears it cannot pay what it owes in damages. Even if it can, none of those executives will be held responsible, and the shareholders, not the executives, will pay.

Drug companies can raise prices to astronomical levels in the name of profits, effectively depriving uninsured or underinsured or poor patients of live-saving medications, and not even the corporation can be held responsible for the resulting deaths.

Financial firms can take incredible risks and nearly destroy the financial structure of the U.S., if not the world, cost tens of thousands of people their homes, and tens of thousands their jobs, and the government bails them out – and not a single executive was personally held responsible.

Talk about risk free! A poor man shoots someone over a few dollars and spends years, if not his life, in prison, while executives make decisions that kill scores of people, and they get rewarded.

Or am I the only one who thinks this is a bit unbalanced?

Of, By, For… Whom?

In his Gettysburg address, President Lincoln promised that “the government of the people, by the people, for the people, shall not perish from the earth.” It’s certainly a great promise about government, but exactly how true is it today?

Well… there’s certainly one aspect of government that tends to get overlooked, and that’s how much government does for corporations and wealthy individuals,from the Department of Agriculture (USDA) to HEW, the Department of Defense, and the U.S. Postal Service.

The USDA offers more than $20 billion annually in farm subsidies of various sorts. Three quarters of the richest farms receive federal farm subsidies, and one quarter of the 400 richest Americans [as defined by the Forbes 400 List] received federal farm subsidies, including at least four billionaires. Under Federal Crop Insurance programs, the top ten percent of farms receive payments 141% higher per acre than the national average for all farmers, and those in the top ten percent receive 70% of crop insurance payouts. Not only that, the Crop Insurance is issued by 16 insurance companies who also receive as a group on average an annual subsidy of $1.5 billion. And 99.5% of the $12 billion in payments from Trump’s program to cushion the impact of Chinese tariffs on U.S. farm goods went to rich white farmers.

Then there are agricultural import quotas and tariffs. Sugar import quotas and subsidies cost Americans over $4 billion annually, and that money goes largely to three companies through inflated U.S. sugar prices. The same problem exists with rice, which increases U.S. consumer rice prices by roughly 40%.

And while there’s been talk about the high cost of pharmaceuticals, until recently hard numbers have been hard to come by, but the House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, showing that the U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices charged in those countries. That doesn’t even include comparable cost savings for Medicaid.

As I’ve noted elsewhere, the U.S. Postal Service continues to subsidize bulk commercial and advertising mail, as well as undercharge Amazon for package delivery. Several news sources claim that it isn’t so about Amazon, but they don’t understand the fine print. Fixed costs are allocated on a model, and under that model roughly 5% of USPS fixed costs are allocated to package delivery when almost 25% of USPS volume is now in package delivery, and the USPS is running annual deficits of several billion annually, which have to be made up by the federal government.

Then, there’s what government does for the fossil fuel industry. According to a new report from the International Monetary Fund, the U.S. has spent more subsidizing fossil fuels in recent years than it has on defense spending, The IMF found that direct and indirect subsidies for coal, oil and gas in the U.S. reached $649 billion in 2015. Pentagon spending that same year was $599 billion.

And how did that happen? The fossil fuel industry spends some $40 million dollars on campaign contributions to members of Congress every election and another $300 million in lobbying Congress.

And, of course, despite the new tax law, which was supposed to result in a better tax system, an in-depth analysis of Fortune 500 companies’ financial filings finds that at least 60 of the nation’s biggest corporations didn’t pay a dime in federal income taxes in 2018 on a collective $79 billion in profits, according to the Institute on Taxation and Economic Policy.

Now…what was that about government of the people, by the people, and for the people?

Slippery Slopes?

The other day, I had a discussion, if one could call it that, with a friend who loves his guns, and who, while not a member of the NRA, worries about gun control just like the NRA does. His basic point was that responsible gun owners aren’t the problem. He’d be perfectly happy with background checks, and requiring a gun operating permit/license and an exam requirement, but he thinks that prohibiting “assault rifles” wouldn’t do that much because there are other “sporting rifles” that can do the same thing. They just don’t look as ominous and don’t carry the name of “assault rifle.” He feels the same way about limits on clip or magazine capacity. And that means, in his view, that one limitation or restriction on weapons and/or ammunition will lead to another and another, because those restrictions won’t be all that effective.

Leaving aside the obvious point that it would be difficult enough politically to enact more than one assault rifle or magazine/clip size restriction, let alone a series of such measures, this line of argument leads back to the NRA claim that guns don’t kill people, but people kill people. In a way, proponents of background checks are agreeing with that NRA claim, because they’re saying that a restriction on who can carry firearms will reduce deaths from guns. So… if that’s true, why don’t we just avoid the issue of which guns are more lethal and should be prohibited and go the other direction – require a state or federal gun operating permit, which includes gun instruction requirements and passing a federal use/safety exam, as well as firearms insurance? Perhaps it also, like a driver’s license, should have licensure levels.

After all, right now, one of the largest problems with guns is that people who shouldn’t have such weapons do in fact have and use them. There really are only two effective solutions – either remove all the guns or regulate the people using them.

In peacetime, at least, cars kill more people than guns do, and we haven’t banned cars… but we have put restrictions on drivers, and required automobile registration, insurance, and safety features. So why not do the same for guns? As my friend, the gun-lover, pointed out, a truly responsible firearms user shouldn’t have a problem with such an approach.


What’s all too often overlooked by both left and right in the political name-calling and ego-bashing that passes for political discussion by the far right and far left is the issue of equal opportunity, what it is, what people think it is, and what each side passionately declares it should be.

More than a few partisans on the left confuse opportunity with outcomes. They believe that if outcomes are not equal, opportunity is not equal. They don’t put it that bluntly, but they certainly give the impression that they believe unequal outcomes reflect unequal opportunity. Now, on a large scale, unequal opportunities will definitely result in unequal outcomes, but because individuals differ in vastly in innate abilities, genetics, environment, and upbringing, the reverse is not true. Unequal outcomes do not necessarily prove unequal opportunities, and that’s why a closer look at the situation is necessary.

That being said, today in the United States, our current culture has enshrined and neglected to remedy, and in a number of cases, made opportunity for people even more unequal.

When business and industry pollute, they worsen the environment, and they do so in a manner most detrimental to the disadvantaged, because higher levels of pollution weaken health and actually impair intelligence. So when a business fails to comply fully with health and safety standards, or when government does not insist on adequate standards, the salaries of executives and the profits of shareholders are literally subsidized by the negative impacts on the health and intelligence of those too poor to move away from polluted areas and often without options for a healthier workplace. And because executive offices and the homes of those executives are usually removed from the factory floor, workers face less healthy work environments than do executives.

Given the way school systems are funded, the children of more affluent parents have not only better health, but better education opportunities. The same holds true for health care. And because poorer people often cannot afford the best of diets, that lack of balanced nutrition hampers the development of their children.

In a real and absolute sense, the most basic of opportunities, simply to grow up healthy with an opportunity to learn and develop, is heavily biased toward the more affluent members of society. Yet too many initiatives to create more equal opportunities for those whose opportunities are blighted are decried as social engineering.

But isn’t allowing excessive pollution for the sake of profits and higher incomes for executives also social engineering? Isn’t gerrymandering school systems by income levels to keep out the less affluent social engineering? Isn’t rigging healthcare based on income social engineering? Today, it’s accepted practice, at least by Republicans and conservatives, that corporations and moneyed individuals can engage in such social engineering, but that government shouldn’t.

But, if government doesn’t… just how long will the increasing numbers of the disadvantaged, and their numbers are increasing as the middle class continues to vanish, how long before they decide not to accept the current charade of “equal” opportunity? How long before matters get even more violent?

Hypocrisy and Incompetence Compounded

Earlier this week, Trump threatened to withhold $19 billion over the next three years in highway trust funds for roads and highway infrastructure if California doesn’t drop its efforts to require higher car and truck mileage standards in order to reduce automotive emissions and pollution. Ever since the Nixon Administration, under federal law, the federal government has permitted California to require higher standards because of its greater auto emission and air quality problems.

The Trump Administration has claimed that it will withhold those funds because the state hasn’t fully implemented some 130 air quality state implementation plans (SIPs). Federal law requires states with dirty air to come up with plans on how to reduce pollution, but those plans must be approved by the EPA. EPA has a backlog of such plans awaiting approval, and California’s 130 SIPs account for about one-third of the total.

What’s totally ridiculous about this is that these plans have been submitted to EPA, where they have languished for years because EPA is supposed to review them, and then accept, reject, or propose modifications. EPA has not taken any of those actions, as required by law.

Now, EPA Administrator Wheeler has demanded that California withdraw all 130 and resubmit them because California isn’t meeting air quality standards, despite the fact that 85% of the population — 34 million people — breathe dirty air.

Wheeler’s letter to the California Air Resources Board totally baffled state regulators and even former EPA officials who say the backlog exists because the federal government has not approved the plans and that what EPA is now doing is basically punishing California for EPA’s own inaction.

On top of that, during the Trump administration, EPA has rolled back or is in the process of rolling back twenty-four air quality regulations that would reduce air pollution, including a rule limiting methane emissions on public lands, including intentional venting and flaring from drilling operations; a rule designed to limit toxic emissions from major industrial polluters; a rule requiring fewer emissions from new power plants and expansions; a rule requiring newly built coal power plants capture carbon dioxide emissions; a rule setting strict limits on carbon emissions from coal- and gas-fired power plants. In addition, EPA has proposed rolling back all mileage standards for new cars and light trucks, which would significantly increase auto emissions and pollution nation-wide.

So after taking all these steps to increase air pollution, Trump now wants to make it harder for California to clean up its air… and wants to withhold federal funds because California isn’t complying fully with federal law because EPA hasn’t done its job.

Talk about incompetence and blaming others for it!