Weekend Economists Ask: "What Were They Thinking?" March 16-18, 2012

[Demeter]

68. Corporate Malfeasance – And Why It Corrupts By John Perkins

http://www.informationclearinghouse.info/article30837.htm

malfeasance n. intentionally doing something either legally or morally wrong which one had no right to do. It always involves dishonesty, illegality, or knowingly exceeding authority for improper reasons. Malfeasance - Synonyms: MISCONDUCT, MISBEHAVIOR, MISDOING, WRONGDOING http://www.merriam-webster.com/dictionary/malfeasance


---For several decades we have empowered politicians and corporate leaders to create a system that is scandalously wasteful, overtly reckless, and we now know – ultimately self-destructive. It is hard for us to admit that we have been hoodwinked. But that is exactly the case. We have been hoodwinked by both the modern-day robber barons and by the very governmental bodies that are charged with preventing such malfeasance. Corporate malfeasance is thriving and we continue to see on a daily basis corporate executives taking advantage of workers and consumers alike. As I've written in my books, more than any other single factor, today's tycoons exemplify the mutant form of capitalism we have misguidedly embraced and been infected with – the exploitation of the many by the few. We accept as "natural" that the CEO's of Fortune 500 companies become as rich as the Gilded Age tycoons simply because they operate under the mantle of publicly traded companies that are supposedly scrutinized by the Securities and Exchange Commission (SEC). We witnessed massive bailouts at the end of the Bush presidency and at the start of the Obama presidency and yet we accept the fact that roughly half the profits made by investment banks were distributed to the senior partners – not to the employees or the stockholders. The Wall Street Journal cited in February that banks could double payouts to shareholders in 2012 alone. According to the story, Credit Suisse analysts expect payouts to reach an "average of 47% of earnings in 2012, up from 23% last year."

Ironically the banks positioned to receive these double digit earnings include some of those we bailed out with our tax dollars in the previous year, such as Goldman-Sachs, JP Morgan and US Bancorp. While this all makes for a potentially stronger rally on Wall Street, it does nothing to help citizens struggling on a daily basis to maintain their homes, their health insurance, and their jobs.

One of the earliest robber barons noted in my book was J.P. Morgan. He set a course years ago that has been followed by many of today's billionaires – of mergers, acquisitions, and consolidations, deals that heap riches on those who mold them but wreak havoc on competitors, workers and local economies. These transactions empower a few individuals with control of resources and markets; the CEOs who end up at the top of the conglomerates are in positions to exert excessive influence over government officials, the press, and buying trends. Because such deals are made on paper- in board rooms, law offices, and at investment banks - they seldom produce tangible goods or services or create new jobs. These paper transactions have played an ever-increasing role in the U.S. economy in recent decades and are a major contributor to the failing of our economy. The March 26, 2012, Forbes Billionaires issue states, "This year, we've counted 1226 billionaires, an all-time high." Those 1,226 billionaires are worth a record $4.6 trillion. The average wealth of a Forbes billionaire is $3.7 billion. Yet, in our country, the U.S. billionaires call for lower taxes on corporations while the middle-class continues to bear the heaviest tax burden when they can least afford it. Those with money and power go to great lengths to cheat our system.......

You and I can make a difference by supporting institutions that call for corporate restructuring and accountability. I urge you to take all this seriously, become more aware of the roles corporations play in our destinies and those of our children. Please support the initiatives of organizations like Corporate Accountability International - http://www.stopcorporateabuse.org/ , and The Center for Corporate Policy - http://www.corporatepolicy.org/action/take.htm .

John Perkins- NYTimes best-selling Author - www.johnperkins.org.