Time to Just Say No to Giant Corporate "Parasites" -- and Recognize Them for What They Are

Sounds like a movie script. Giant parasites stalk the American landscape disguised as benign upstanding participants in the "free market."

The dictionary defines parasite as:

"An organism that lives on or in an organism of another species, known as the host, from the body of which it obtains nutriment."

In fact, there are a number of major corporations in America who do very little productive work -- never making products or delivering services that benefit their consumers. Instead, the profits they earn and the big CEO salaries they pay are derived by sucking or skimming a portion of the dollars they have convinced the Government to send through their corporate accounts -- generally to perform a function that is or ought to be an inherently governmental function.

Ironically, many of these corporate parasites are the loudest defenders of "free markets" and the most vociferous opponents of "government takeovers," when in fact they exist by feeding off the taxpayers.

Three examples have been in the news of late:

1). Banks that provide government guaranteed student loans. The house voted yesterday to end its four-decade practice of subsidizing private lenders to make student loans. Since the 1960s, the government has subsidized banks to lend students money and guaranteed lenders against loss if students defaulted.

But since the early 1990s the government itself has done direct lending for many student loans and avoided paying the subsidy to the banks. Why, after all, should banks take a percentage of every dollar to generate loans if the taxpayers guarantee the loan in full? In fact, it turns out that the government - which, after all, has a responsibility to provide higher education to its citizenry -- can provide loans directly at a much cheaper price than it can through the banks.

In fact it's estimated that eliminating the subsidy to the banks will save $40 billion that can be transferred into the Pell Grant program that provides college grants to moderate and low income students.

2). Private military contractors that provide security services. One of the things that defines civilized society is that the government has a monopoly on the use of lethal force. Yet over the last decade private military security firms have exploded. They have been hired with increasing frequency to do essentially governmental security functions. We've seen the results in the murders of civilians by Blackwater operatives in Iraq. And the growth of free-standing, mercenary armies that are available for hire by governments around the world is a danger to international security.

But these contractors are also economic parasites, since they charge a great deal more to do functions that could otherwise be performed by the government. In fact, most of their personnel are trained by the American military. After they leave the service and go to work making much more than they would if they re-enlisted for another turn with the Army or Marines. Then, the Blackwaters of the world turn around and bill their people out at huge markups so that the taxpayers -- who paid for their training in the first place -- have to pay a corporation for the privilege of hiring them back at much higher rates.

3). Private health insurance companies. These are the granddaddy of all parasitic operations. Remember that every other industrial society has long since decided that financing the health care of its citizens is an inherently governmental function -- that it is cheaper and much more consistent with our values -- to provide health care to all as a right.

With that approach, every other industrial society pays 50% less than we do per person for health care and, according to the World Health Organization, 36 countries have better health care outcomes than we do in the U.S.

Remember that health insurance companies don't provide an iota of health care services. They do hire an army of claims agents to deny claims for coverage, and another army of salesmen and admen to sell you policies that you would automatically have in most other countries. They simply take your money, skim off profits and CEO salaries and then -- once they get their end -- pay for your health care.

We know that the one thing government does very well is managing insurance pools. Medicare and Social Security are two of the most successful programs in history. And the health care financing authorities in countries like France and Spain are pretty good at it too.

The so-called "Medicare Advantage" program is a great example of a side-by-side comparison of how the private insurance companies compare with government run insurance programs. Medicare Advantage was set up by the Bush administration and Republican Congress to allow private insurance companies to skim off a share of Federal Medicare dollars. Originally, the private insurance companies claimed they would provide these services more efficiently than the "government." But it turned out they required a 14% to 19% subsidy above the normal costs of Medicare.

As the Economic Policy Institute has pointed out, "In a nut shell, Medicare Advantage plans are private plans funded through Medicare to provide similar benefits, but at a 14% higher cost on average, according to the Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency. Eliminating these overpayments would free up $157 billion over 10 years, a substantial down payment on health care reform."

Now the private insurance industry is battling tooth and nail to prevent a public health insurance program from competing for its non-Medicare business. They want to continue to skim their share off of every health care dollar they can.

In fact, they hope that the final insurance reform bill will require people to buy their products without any competition from a public plan or rate regulation to limit the amount they can skim into the hands of Wall Street investors and CEO's.

That's why President Obama has proposed that the final health insurance reform bill include a robust public health insurance option that doesn't leave us with a mandate to buy insurance from a monopoly of private insurers (that are, by the way, also exempt from the anti-trust laws). That would just guarantee a government-mandated stream of revenue on which the private insurance companies can feed.

Of course, corporate parasites like these have always existed. But they have burgeoned over the last several decades as some of the best and brightest graduates of our universities have been convinced that they would be "chumps" to go out and create products and services that provide value to the economy. Much better to work for a corporate parasite that can make huge sums of money simply by convincing government to keep directing huge streams of revenue through its corporate coffers and then slicing off its share as the money comes by.

It's time for the age of the corporate parasite to come to an end -- otherwise, we're the "chumps".

Robert Creamer is a longtime political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

 

 

Comments

[ScribblerG]

If it's a choice between big corporations and government, I'm not sure I want to live in this kind of world at all. Let's get the govt out of all of the above and we won't need to contract firms to do the work. Just a thought...

[stevendedalus3]

It's the old middle man syndrome, exemplified phantasmagorically by Wall Street's investment bankers,brokers and traders.

[Kye154]

This is a pretty good commentary, and I applaud it. Noam Chomsky and Ralph Nader have been saying this for years about the problems of corporates running every facet of American life, while in many cases being subsidized by the government, to evade paying taxes, and hire lobbiests to trample over every other Americans rights. Then, corporates have the audacity to take your money and jobs overseas whenever they wish, and leave you, the American taxpayer, to clean up their mess they left behind. They provide absolutely no allegience to this nation, and do very little to help America as a nation. Corporates are strictly profit oriented and they don't think twice about predatory practices against people. The banks, mortgage companies, and Wall Street are prime examples of how they get bailed out of their problems, while common Americans are left fending for themselves the best they can. Corporates need to be outlawed, and the current batch of corporate execs taken out to the back alley to be summarily shot for the financial condition they have left this country in.

[django707]

Seconded!

[balancedsolution]

Corporate parasites have changed the way America looks.

Go into any suburban town and they all look the same, with their Home Depot, Costco, Walmart, Best Buy, Starbucks, Mall Stores.

What a country. We have lost more in the last 25 years than just money...we are losing the culture that each nook and cranny of the country provided.

In the name of profit. Squeeze each penny out. There's a social cost to that though. Each town loses it's identity.

It's all one big big box country.

Me sad.

[UKOH]

Right on!

As a European living in the USA I note with concern the sameness of the USA.

In any European country travel 100 miles and you will have come across many villages, towns and cities all with their own very unique character.

Travel 1,000 miles in the USA and with each city you come to it is so much the same as to make you wonder if you ever left!

There are some great exceptions of course, starting of with San Francisco. Also my own little University town in Ohio is deliberately kept to have its own unique character - which is why i live here.

It is no coincidence that when Europeans visit they find San Francisco the most European-like of the major USA citiies.

[kold]

where is john galt, and what's he supposed to do? if he does anything close to what rand imagined, there is a war coming for us soon. if he does anything to avert it, what would it be? perhaps saying no to interceptors in europe? perhaps saying that peace concerts aren't to be overestimated? perhaps going slowly, knowing the game better than anyone, knowing it's not a game, unless for those who will be overcome by it, the parasites. don't you believe there is john galt? well, let's see.

[John Rett]

Is it funny how all the Examples include a Government involvement that resulted in corruption or excessive costs... so is it really Corporate Parasites or special government favorites? that leads to this problem.

[LeftRight]

Considering that the government program is running just fine until the Public/Private Partnerships come about, it's the corporations who are getting the partnerships..... Whether that's because they are corrupt or because they are favorites isn't really important.

[arlandbaee]

When profits become more important than the product and the customer, we all lose.

[Wonderwheel]

Three cheers for Robert Creamer who pins the tail on the donkey of for-profit parasitic corporateering by the very people who feed the anti-government hysteria.

[skwan91607]

Recently Americans as well as the world have witnessed the economic policy of Trickle Down Economy promoted by Bush Administration failed miserably, a financial meltdown. Such Free-To-Do­-Everythin­g-Wrong-Pr­ivatizatio­n-Capitali­sm or unchecked environment for business activities is a self-trapped to bing in a disaster as what we had encountered. The short-sight idea of bringing foods to everyone's table as Bush proclaimed before is not a reality, but an allusion from a self-claimed "Great man" of son-of-god. That simple minded idea "Market-Wi­ll-Correct­-Itself" is a wrong assumption. Further down widening gaps between Rich and Poor is going opposite to the main goal of Capitalism. Rather a building up mIddle class is the proved way to lead to a meaningful Capitalism as history shown us already.

[ZalaK]

What puzzles me is the public reluctance toward altering what has become obscene corporate opportunism. This exploitation/ indulgence seems "matter of fact" now - transforming the outlook of entire nations - at the expense of middle class prosperity. Defending such monopolies, seems absolutely counter to what supposed free nations and capitalists uphold. Yet in most discussions, the fear of any change is palpable..­..socialis­m is demonized as though that's somehow the problem. When in fact it (or at least increased regulation) may be something of a solution. Very creepy, this "Ministry of Truth" perception. What exists, is labeled the opposite and defended as such.

[dieselis]

I'am apalled and taken back seeing whats occuring in our nation. How can we be so stupid? These communist corporations under the guiese of free markets control everything. Yes that means you. Were stuck with labels according to political, religious, social, ethical or racial preferences. Then they kick back and rob us blind by controling all the money through the federal reserve system. Along with practically owning our government by proxy through lobbyist. Isn't it about time for us to stand up to these people regardless of the consequences? Or do us c0mmoners continue to fight one another while they get richer? Were entertaining them and stockpiling their accounts while we can't even make ends meet. Were all in the same boat yet we continue to bash each other as our liberties, substance and way of life is being stripped off. So these communist corporate hoards can view the tyranny they inflict on us from their mansions and lofty penthouses. Should we attempt to stand up to these bullies? Or are you happy to be an all day sucker? Perhaps we'll continue to look to our government. BTW. Hows that working out for you?

[cabanas]

It is also time to say no to political parasites. No government takeover. I lived through one and is not pretty. Government should stay away from controlling a lot of aspects of our lives. Government does not know how to manage anything because they use blank checks to finance projects. That is why we are now trillion of dollars in debt and still counting since Democrats want to pass the healthcare reform.

Only six months into this new Administration and we are already deep in big _____. And please spare me the lecture is all because of Bush. Bush might have gotten us here, but how Obama gets us out is all on him. I hold him responsible for the wasted money in the stimulus package, the fact that he is not holding mortgage companies and banks accountable for how they are not using the money to help the people, the fact that he allowed General Motors double dip into the stimulus package money because of labor favoritism. I hold him responsible for not doing enough for the middle class and saying with actions the hell with them.

Whey people are so upset with him? It is not because of race, it is because on his watch they are loosing their jobs, their homes, and all we get in return are lectures and teachable moments. If I wanted lectures, I would have gone back to school. WE want action, not lectures. Enough already.

[jayjay4142]

We are losing our jobs due to NAFTA, CAFTA and GATT . The corporations are daily shipping our jobs out of this country because they get labor for 50 cents an hour in some cases. If we had higher tarriffs on goods coming back into this country, maybe we could save some jobs. How about corporations who get corporate welfare from us and send all of thier jobs to other countries. How about the offshore accounts they have to keep from paying taxes to this country. We working people are our own worst enemy because we allow the lobbyists and corporations to get by with anything they want to and scream Socialism if the government wants to make them play fair so that small business owners do have a chance. Yes Capitalism is a good thing, but there should also be someway to have a level playing field.

[LeftRight]

Really? What government takeover were you subjected to? The fact of the matter is that liberals see that there are some places that work better when done by business, and that there are some places that work better when done by government, and we're tired of seeing the business run it all!

[pinkibus]

I say no to WalMart.

I say no to forestry - - I use recycled paper and wood.

I say no to oil - no car.

I say no to car manufacturers - no car.

I say no to clothing manufacturers - buy good stuff and wear it for years.

I say no to credit cards - don't use them.

I say no to food giants - buy local and freeze and no - zero - packaged food. ( I lie - once a year ice cream but it is locally made and you would die for it.)

I say no to canned anything and bottled water. I hate being ripped off.

My furniture is antique - getting more valuable by the day.

I am not a good consumer. The only big corporation that would like me at all is the one delivering the internet, t.v. and telephone. And it makes me pretty mad so I may switch when I find one that hasn't off shored.

I say no to big pharma - even prescribed drugs can be obtained by getting no name.

I say no to energy consumption - low energy appliances, never use a drier, good windows and insulation. And a tankless water heater. When I have to turn on a light it is a low energy florescent. I even have LED's

I don't buy the latest gadget - no flat screen, no iphone etc.

Corporations don't get much from me. Except when the government uses my tax

[norkas]

The promise to many politicians from big corporations that they or a family member will have a job as consulting etc when they leave office is not new but has been offered over the decades and abused.

Not every lobby is bad but if we saw everyone that gives campaign money to politicians and what they are asking for Dems - Reps - ind - would all be mad and find a simple way to stop those at the door that do not represent us.

Many in big business and employ many people that need work so instead of wishing they were out of business that can look at a better way to serve us. If not the backlash would cause them to replace there often demented ceos and others or change.

These problems are not made for just pone party but all of us and the abuses that are in our face shows how truly stupid or criminal minded our politicians are.

This is a time to rise for WE THE PEOPLE , it starts with petitions asking congressman , senators and others to dump there support of wasteful corp. programs and drain Americans and are viewed as there personal bank roll.

[django707]

I'm with you, pinki!

[politicky]

Let's hope Sotomayor understands this. It's possible. I wonder if she will find like minds on the court?

Sotomayor Issues Challenge to a Century of Corporate Law
http://online.wsj.com/article/SB125314088285517643.html

[Elle Bach]

Ginsberg seems game. (Looks like the women on the court may well keep the court grounded on this one!)

The flesh and blood “person” label, with all attendant rights and responsibilities for the "corporation" is an absolutely ludicrous notion, and characteristic of loopy, greedy Republican think..

Illuminating discussion of all the absurdities that would result from such a thing is here:

http://www.pbs.org/moyers/journal/blog/2009/09/balancing_big_money_and_free_s.html

Example:
“It is ironic that this issue will be decided by the Supreme Court. The same institution that is singularly most responsible for the modern corporation. By twisting both the word and spirit of the 14th amendment, passed to end slavery and guarantee the rights of individuals, the supreme court created the limited liability corporate individual while never helping a single former slave.
Corporations are immortal individuals instilled with more privileges and less responsibilities than any natural individual who is "endowed by their Creator with certain unalienable Rights". When was the last time a corporation sat on death row? When was the last time a corporation was responsible for someone's death?

The question here is; do we continue on with this masquerade?
Do we give back the first amendment rights we took from corporations in the past hundred years?
Should we go even further and finally extend to them their long overdue right to suffrage?”

Scary stuff.

[Claire66]

Corporate use of tax dollars is the RESULT of "big government" and the opposite of free market capitalism. A smaller federal government with less power would be unable to fund these parasites, and the corporations would then have to compete on an even playing field with everyone else. This would benefit all Americans, because competition in a free market raises quality and lowers prices. That goes for education and health care too, just like any other good or service.

[LeftRight]

Yeah, because that works SOOOOOOO well every time it's been tried, like say, the LAST EIGHT YEARS.....