Monthly Archives: July 2022

What Has Reaganomics Wrought?

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By:

Dave Kingsley

“In the Age of Show Business, Public Discourse Has Become Dangerous Nonsense” Neil Postman in Amusing Ourselves to Death

Shareholder Value is the Only Value:  Even the Taxpayer Funded
Life & Death Care in the Healthcare System Has been Reduced to a Matter of
Return on Investment

Welltower, Inc. – one of the major players in the senior living industry – states in its annual report to the Securities and Exchange Commission that the company’s primary goal is to “protect and enhance shareholder value.”  Although Welltower is a dominant force in the taxpayer funded, skilled nursing and long-term care system, nothing is mentioned in company financial reports about a duty to provide ethical medical care to patients.

I consider these nursing home corporations to be no less evil than corporations in the fossil fuel industry, tobacco industry, and the assault weapons industry.  Like big oil, big tobacco, and big firearms, they value people only as consumers with little to no human worth other than parting with their money for the benefit of investors.

Unlike the tobacco, fossil fuel, and gun industries, nursing home corporations earning extraordinary returns from taxpayer funded medical care are excused for their pervasive patient neglect and abuse by carefully selected members – often naïve academics or industry shills – of various commissions (e.g., the recent National Academy of Sciences and the COVID-related Mitre Corporation Commissions).  Without any empirical, scientific, justification, the industry’s propagandistic claims about skimpy Medicaid reimbursement are taken at face value in the media and generally by the public.  The industry has a richly funded a very effective PR machine.

Unquestioned misinformation – whether intentional or unintentional – is creating a crisis in American governance and the well-being of residents.  The anti-vax, anti-science, assault on the public health system during this era of COVID has long been in the making.  What has become known as proofiness (or truthiness) has polluted public discourse.  I have spent untold hours collecting, organizing and analyzing corporate financial reports submitted by nursing home corporations to state and federal agencies.  Much of it is fraudulent, much of it is financial machination, and much of it is laughably ridiculous, but hardly any of it is seriously questioned. So, deadly conditions in nursing homes continue unabated.

“Nihilism, the devaluation of the highest values of Western culture.”  Ashley Woodward in Understanding Nietzscheanism. 

Ronald Reagan Propelled a Destructive Economic & Social Philosophy Forward Through Government Policy:  Trumpism is the Apotheosis of Reaganomics

The previous post by Kent Comfort chronicles the economic revolution that commenced with the Reagan Administration. This post addresses the values wrought by the economic superstructure described by Kent.  A deep dive into philosophical movements that seeped into the American zeitgeist along with Friedman/University of Chicago radical free market nonsense is beyond the purview of this post.  Suffice it to say that Ayn Rand’s philosophy of selfishness, dog-eat-dog capitalism, and Nietzschean ubermensch (John Gault) seeped far deeper into the American zeitgeist than is readily apparent to most observers.  Along with the Randian virtue of selfishness, the nihilism and rejection of Enlightenment values of the postmodernist philosophical movement became de rigueur among intelligentsia – eventually on the right of American politics.

The changes we’ve seen entrenched in U.S. culture over the past 40 or more years can be characterized as the triumph of self-interest over public interest and community, the prevalence of wealth and power over equality, and the weakening of science engendered by disregard of and disrespect for reason and objectivity.  We are in a post-truth age characterized by deceit, manipulation, and cheating without accountability.  Any claim based on pseudoscience is deemed legitimate – especially if it is legitimated by journalists, politicians, and influential voices in academia.

In the winner take all, survival of the fittest, milieu, it is OK to spout falsehoods and engage in practices that would have been otherwise unethical and unacceptable in the pre-Reaganomics era.  Lying, cheating, stealing, and preying on the vulnerable and weak can be justified by absolutist beliefs in abstract principles.  In its most extreme form, Reaganomics is conflated with Christian fanaticism and right-wing, proto-fascist political movements.  Furthermore, extreme principles of the movement include total deregulation and dismantlement of the administrative state except insofar as it can further a free-wheeling corporate state.

In post-truth America, shareholder value as the highest value of business enterprise, doesn’t need to be justified scientifically as beneficial to the American people in general.  Universal human rights of equality and fairness handed down to us from the Enlightenment have been devalued while the powerful and wealthy leverage their power to degrade democratic processes and direct more and more economic resources from the middle- and low-income classes to themselves.  In the long run, we will see an increasing amount of tragedy and farce detrimental to the future of the planet and all living things.

REAGANOMICS, FRIEDMANOMICS, WELCHIANISM

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The RFW Debacle

By:

Kent Comfort

How Ronald Reagan, Milton Friedman and Jack Welch combined to misalign American Capitalism and the Economy

“In the beginning…”, there was Ronald Reagan, Milton Friedman, and Jack Welch. Or at least there are too many people who would like to think that they started a positive economic revolution. We have been living with the damage ever since.

Reagan was a convenient fool and puppet, Friedman was a misinterpreted false prophet, and Welch was just a crook. There you have it, three sacred cows butchered in one sentence!

Each of these men are now deceased, of course, but the legacy of the damage they caused lives on and on.

Reagan was a patsy for the deregulation crowd and that lead to immeasurable loss of many services for the commons. Airlines and railroads are two important examples of industries that no longer serve the public good beyond the extent to which they are forced to. They have been free to strip away humanitarian services and create mini monopolies. A mini monopoly is one which controls specific segments or geographical regions of the markets they serve with the advantage of not having to worry about competitors entering their space. Another prime example of this is the cable TV industry. Your zip code dictates who you have available for your household.

Friedman preached, do anything you want, buyer beware! He included a safety valve in his self-proclaimed predilections that everyone fails to mention if they even knew about it. He realized that many of his ideas contained considerable risk to American society. To protect those members of society who were not equipped to enter the business scrum, he advocated for a version of what we today call UBI, or Universal Basic Income. But his intentions were not necessarily noble. Rather, if the masses could count on some level of economic safety net, the business bandits could go about the task of creating metaphoric strip pits anywhere and everywhere they desired for their personal gain.

Welch rose to the top of a corporate mountain, namely General Electric, and drove it upside down in the ditch while trying to reinvent ancient accounting principles, and pile up a strange combination of acquisitions to create the impression of rapid growth. He ran for the hills just before the consequences caught up with him. For greater details about this travesty, check out a recent book titled “The Man Who Broke American Capitalism” by David Gelles. This might be the best biography about Welch ever written.

The ”everyone else is doing it” momentum took over for the following decades leading up to present time. Welch declared that American business only had one obligation. That was to serve the shareholders. It could be said that because this view became the norm, the words shareholder and stakeholder became no longer interchangeable. The American capitalism model damage is continuing unabated to this day. It does not matter which of the two political party monopolies are in the majority, neither has been willing to give up the largess they collect and instead focus on working to end these rotten practices.

That is an abbreviated overview of how we got to the low point we are at today. Let’s look at the four primary elements of the current capitalist system and how they harm more than help most of us.

They are the formula, the impact, the culture, and the future.

The Formula –

The American business formula can be boiled down to a simple equation: Deliver the least possible value for the highest possible price. If you pause for a moment to think about that statement, it is probably very easy to identify examples you encounter every day.

The skill required by a business entity to benefit from this formula demands that they do not take either end of the equation too far. On the low value end, if that is taken too far, loss of sales results. The same outcome applies to trying to charge too much for the value delivered. The practice becomes one of trying to balance both ends without giving up sales and consequent profits.

Let’s not forget that an important element of this formula has been the suppression of middle-class wages. They have actually gone down when adjusted for inflation, while the executive suite has been raiding the corporate coffers on a level not even imaginable prior to the RFW (Reagan-Friedman-Welch) era.

When one’s master is the shareholder, this is the only perceivable option. If a business is not beholden to masters who would dump their shares in a blink if they do not think it is making enough money, it can instead focus on delivering as much value as possible for the lowest price possible to earn a sufficient profit to sustain the business. That is truly possible and it is more typical of the way business was done before the advent of the RFW era.

A successful business could build a great reputation and be rewarded with repeat business from a satisfied customer. The profits from such high operating integrity could be reinvested both inside and outside the business to grow owner wealth over time. The quarterly report was never a necessity or useful tool.

The Impact –

The long-term impact of the above-described formula has been analogous to the well-known aphorism of the frog sitting calmly in the bottom of a pot of slow boiling water. Many would agree to the fact that the water is boiling today.

What is at the root of the impact? There has been a continuously growing gap between the value of a service and commodity and the escalating prices for them. Consider the “Made in” label on nearly any item in your house. “USA” is nearly non-existent. In fact, it is a selling point to proclaim a product as made domestically today because it is so uncommon.

Of course, the initial benefit to the product originator has been marginally reduced manufacturing costs. America has endeavored to impose regulations on child labor and other forms of involuntary and exploitative servitude that corporations have a history of not hesitating to deploy if there are no barriers. The amoral culture and policies of major corporations give leeway to these practices in the name of growing their profits for the Welchian philosophy of shareholder first no matter what. And China apparently does not aggressively enforce even the most lenient policies they proclaim regarding inhuman workplace conditions. American corporations do not interfere with Chinese labor practices and economic practices. The American people who consume the output of Chinese factories enjoy the perceived low out of pocket cost and do not question or challenge how or why they benefit from that. That is the nature of slow-boiling pots of water. The short-term benefits cloud the horizon of long-term damage.

Is this practice limited to only the multi-national corporate giants? Unfortunately, the answer is no. Here is a story that has been duplicated nationwide for decades. Yep, it is another slow-boiling pot story. Only this time, it is about a thriving midwestern family-owned multi-generational business that produced a globally popular product that you, the reader very likely have in your toolbox as you read this. If you don’t, then you may not even have a toolbox. This is the Vice Grip story. You have a pair, right?

The invention of this remarkable tool was accomplished by William Peterson in the late 1930’s. The product went through a series of refinements through the World War II years and began achieving popularity initially with farmers following the war. The location of this business was in the small agricultural community of Dewitt, Nebraska. The business grew and thrived under the able management of Dewitt’s son and two grandsons. They were a very generous family who employed and promoted people within the company until they had over 300 souls toiling away to supply a hungry market for a great tool. Community families prospered, sent their children to college, and everything about this saga epitomized the American dream. Until…..

Later generations of the Peterson family chose not to continue working in the business. Going away to college and seeing new horizons has a way of doing that to young people from small towns. So, the company was put on the market for sale, and according to the story it was a quick and easy sale. The new owners decided to close the Dewitt factory and move manufacturing to…wait for it….China! Those 330 employees were suddenly out of work. Multiply that number by and average household of four, and the negative impact to a small community is clear. Dewitt, Nebraska will never been the same.

A superbly handcrafted and high standard tool became a lower grade high volume throwaway tool, and copious profits were piled up consequently. If you were fortunate enough to have in your possession a Dewitt manufactured version of the Vice Grip, you probably still have it and it is still working as designed. If you have the Chinese made version, find and original version to compare it to. It will be clearly different.

This decline in value offset by increase in cost is not limited to your personal toolbox or any other product in your household. Consider your experience today with what is fictionally called customer service.

When you have the misfortune of needing to call your source for service, most often the individual on the other end of the call is offshore, entirely ignorant about the service or product you are having a problem with and trying to search for answers on their computer literally as they speak with you. You are nearly always placed on hold for two or three minutes several times during the call, so the support person to research what you are calling about because they do not know anything.

Most major American corporations who have products or services that require customer support use these offshore call centers. They are drastically cheaper than maintaining a state-side call center. But the damage their reputations incur often necessitate contracting with yet another specialty business. That would be the “reputation management” service.

It is uniquely American that reputation management is a growing industry. Companies are willing to spend millions having their soiled reputations professionally laundered instead of spending those same millions providing a higher quality service or product in the first place. Does that make any sense?

The Culture –

What is the downstream effect of the formula and impact described above? How does it degrade the culture of the nation and people? This is where the most severe damage is realized. Unless one is in a coma, awareness of how much cultural and economic deterioration has been accumulating during the last five decades is being realized and talked about at every tier of our social hierarchy. Virtually no one is content with the national homeostasis that has devolved during this time. Correspondingly, no one has any idea what to do about it. The social and economic deterioration was so gradual and so multi-layered that everyone has just acclimating to it while it has marched through our lives.

Disillusionment and a sense of being violated and cheated has led to a growing distrust in the institutions and commercial sources we believed we could rely on. That trust has eroded to the point that everyone has become more wary of everyone else.

When we feel powerless, fear becomes the primary emotion that guides all decisions. Strength and empowerment never emanate from fear. I would be willing to wager that most of the personal firearms sales today are motivated by little more than fear. Personal firearms are not rational protection from the kinds of fear most of us carry around. They are a symbol or metaphor for the sense of helplessness we feel in our daily environment.

The Future –

What will it bring us? That was a trick question. The better question is what kind of future we are going to bring ourselves. Whether we are individually and collectively proactive, or passive, the future is on the way. And even in passive mode, what comes will be of our making. Inaction is a form of action.

Nothing I have written about so far is unchangeable or irreparable. We made it what it is, and we can make it something else. There has to be a public will, supported by a public awareness that we are the masters of our lives and collective culture. We have been lazy. We have become addicted to the prevailing status quo, even if it is hurting us.

The regression and distrust that so many Americans live within today will have to change because nature is not static. Evolution is still very real. We can hope that history is not our guide or window of what is to come. The reason for that statement is that throughout history, sovereignties that degraded in the manner discerning humans are witnessing ultimately collapsed. Not talking about just a dip that they recovered from. They melted down into a form of dark ages that eventually led to a period of rebirth. The reset button was finally pushed after sufficient decay purged the prevailing policies that led to that downfall. I challenge anyone to find an exception to that. The best anyone will be able to do is recognize varying scales of collapse, not exceptions to collapse itself.

Are we ready to agree yet that the kind of social leadership that brought us to this threshold is not what is needed to lift us out of it?

Are we getting closer to agreeing that political parties have no solutions to the predicaments we live with today?

Can we imagine an electoral purge on a national scale that removes every electee from their perch and replaces them with new blood?

Can we turn a deaf ear to all the tired arguments about why experience matters and we need our incumbents to retain the power they have appropriated?

Can we become more personally engaged at the community level to initiate the paradigm shift that must and will happen even if we do nothing?            

I know I need to become more intimate with each of those questions in my own life, and I hope you will join me. Your comments and thoughts are encouraged and appreciated.