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Mar 10 2015

Not Much Of A Mystery At All

The Conundrum of Corporation and Nation

Robert Reich

Sunday, March 8, 2015

The U.S. economy is picking up steam but most Americans aren’t feeling it. By contrast, most European economies are still in bad shape, but most Europeans are doing relatively well.

What’s behind this? Two big facts.

First, American corporations exert far more political influence in the United States than their counterparts exert in their own countries.

In fact, most Americans have no influence at all.



The second fact is most big American corporations have no particular allegiance to America. They don’t want Americans to have better wages. Their only allegiance and responsibility to their shareholders – which often requires lower wages  to fuel larger profits and higher share prices.



(B)ecause of these two basic facts – their dominance on American politics, and their interest in share prices instead of the wellbeing of Americans – it’s folly to count on them to create good American jobs or improve American competitiveness, or represent the interests of the United States in global commerce.

By contrast, big corporations headquartered in other rich nations are more responsible for the wellbeing of the people who live in those nations.

That’s because labor unions there are typically stronger than they are here – able to exert pressure both at the company level and nationally.



Governments in other rich nations often devise laws through tri-partite bargains involving big corporations and organized labor. This process further binds their corporations to their nations.

Meanwhile, American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations.

And top U.S. corporate executives make far more money than their counterparts in other wealthy countries.



And because of the overwhelming clout of American firms on U.S. politics, Americans don’t get nearly as good a deal from their governments as do Canadians and Europeans.

Governments there impose higher taxes on the wealthy and redistribute more of it to middle and lower income households. Most of their citizens receive essentially free health care and more generous unemployment benefits than do Americans.

So it shouldn’t be surprising that even though U.S. economy is doing better, most Americans are not.



(W)hen at global negotiating tables – such as the secretive process devising the “Trans Pacific Partnership” trade deal – American corporations don’t represent the interests of Americans. They represent the interests of their executives and shareholders, who are not only wealthier than most Americans but also reside all over the world.  

Which is why the pending Partnership protects the intellectual property of American corporations – but not American workers’ health, safety, or wages, and not the environment.

The Obama administration is casting the Partnership as way to contain Chinese influence in the Pacific region. The agents of America’s interests in the area are assumed to be American corporations.

But that assumption is incorrect. American corporations aren’t set up to represent America’s interests in the Pacific region or anywhere else.

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