How the Private Sector Failed America

10/19/2012 02:06 pm ET Updated Dec 19, 2012
FILE -This July 28, 2011, file photo shows the dome of the U.S. Capitol in Washington. During his weekly radio and Internet a
FILE -This July 28, 2011, file photo shows the dome of the U.S. Capitol in Washington. During his weekly radio and Internet address Saturday, Sept. 22, 2012, President Barack Obama faulted Congress for leaving town with several pieces of unfinished business on its plate. He accused lawmakers of being "more worried about their jobs and their paychecks" than their constituents, and he said he wants them to come back in November to finish work on a veterans' job plan, farm policy and helping homeowners refinance. (AP Photo/J. Scott Applewhite, File)

U.S. corporations transformed our world. The cost of products collapsed. Productivity soared. Lean and mean supply chains, combined with employee cost management, benefited the entire globe.

The challenge confronting the world now is that neither the gains nor the pain were shared by all. A Robert Casey for Senate advertisement demonstrates part of the problem. The young Green Beret and other military were electrocuted in the safety of their war zone showers. Faulty contractor electrical work was responsible. Without the interference and persistence of a U.S. Senator, the deaths and the grieving families would have been ignored.

Corporate America underperforming and covering up is nothing new. Things were once different. In my youth at the very beginnings of the space race, the Soviet Union launched the first Earth artificial satellite, Sputnik 1. The space race was on. After several failures ending in spectacular explosions, the U.S. launched its own satellite and we entered space and the modern era. Neither corporate nor government cover-ups soiled the picture. Results were what mattered.

Why relate this ancient history? Within months, the federal government cooperated with the private sector to equal, and then surpass, the Soviet Union in space. The race ended with the moon landing. An incredible feat but it is only one of many in our long history. Government and business turned this nation into the world's factory during WWII. Cooperation between public and private sectors did such incredible things as building an ocean-going ship a day. At its peak, U.S. industry produced 9,000 aircraft in a single month. These achievements are being lost in an era glorifying the private sector and demonizing government. Reality is much different.

Now business executives, confronted with the vast treasure rolling into their companies, displayed the flaws inherent in the capitalist economy. Emphasis is placed on profit over ethics. Lacking effective corporate board, union and government oversight, the executives pillaged company gains for personal profit. Absolute power corrupts absolutely.

Before corporate pooh-bahs begin shrieking that only a few 'bad apples' violated the tenets of moral propriety, I point out the pillage was encouraged, aided and abetted by all, from stockholders to consumers to government. Employee protests were demonized as coming from union thugs. Once Reagan crushed the Air Traffic Controllers' union, unions began losing ground. Now, far from being demonized, unions should be boosted up. The alternative is more government regulation.

Weak government oversight, combined with weaker unions, allowed the private sector to transfer labor costs to the public sector. Sounds absurd but this is exactly what occurred. When workers are paid too little to feed, clothe and house themselves and their families, the struggling employees must turn to the government for survival. Food stamps, housing and medical subsidies, all funded by the taxpayer, are required.

The vulture capitalist response claims employees are free to seek other employment. Reality is far different. Employers tend to collude. Just as supermarkets and gas stations watch their competitors, so do employers watch what their competitors pay employees. Further, without resources or savings, many workers simply are unable to relocate to where better jobs exist.

Long ago, a rural school board member told me candidly that his job was to teach the students enough to work but not enough to move away. Often, corporations embrace versions of this myopic strategy. Unless society, in the form of government or public groups like unions and churches, steps forward, vested interests will act to their sole benefit.

So it is with the private sector today. Unfettered by any competing interest group, executives moved into the vacuum created by the weakness of unions and supplemented by the denigration of federal government. Corporations garnered power beyond anything since the robber baron days of the late 19th century culminating in the Citizens United case. The results are many but one is the electrocution death of our soldiers and a cover-up.

When a sense of community exists, the social contract insures a balance is maintained between the competing factions of society. When this contract breaks down, society itself is damaged and decay begins to set in. The United States is seeing decay setting in. Is this the society we want to live in? My answer is a resounding no.