March 28, 2017

The cracking of corporate solidarity in the nationalist era

The elites try to demoralize their enemy, the people, about the futility of banding together and using collective strength to get their way. On their side of the battle lines, though, they circle the wagons for each other. This corporate class solidarity is manifested in the Chamber of Commerce, the largest shadow legislature group ("lobbying"), which pursues all manner of big business interests against the general public.

But it would be wrong to think of the Chamber as a monolithic group: it is a coalition of member groups, such as pharmaceuticals, insurance, banking and finance, oil, and so on. Each of them has their own specific goals that they rely on the Chamber to bring about, and they do not always harmonize perfectly with the goals of the other groups. Some other group's agenda may impose costs on your own industry.

A manufacturer would prefer not to have his workers addicted to tobacco, lowering their productivity (sicker, taking frequent breaks) and adding to the employer's health care coverage of them. So the tobacco industry getting its way will impose those costs on the manufacturing industry.

It's just a relatively small cost to pay in order to get your own main goal, and that can only be achieved by having all the major industries band together and push for corporate control over all aspects of society. Otherwise each industry could be fought against one by one, making their victory far more doubtful.

Although these costs that each industry imposes on the others are usually rumblings under the surface, they can erupt into quakes that split the industries apart from each other. Simply put: if one industry no longer has anything to gain from being part of the coalition, they will cut their losses and defect.

This could be because their goal has become guaranteed to succeed, or guaranteed to fail. In either case, the outcome is certain, and there's no point in wasting millions of dollars lobbying against the inevitable. Only when the outcome is in doubt, and their dominance is not totally secured, does it make sense to spend all those resources recruiting others to help your side out.

When that defecting group gets out of the coalition, it may even be shunned and targeted by the remaining member groups -- both to punish the defection as well as to distance themselves in the public eye from a former member that has gotten so much of a stigma that they could never achieve their goals through the coalition.

The only major case like this recently as been big tobacco, who went from being a dominant member of the Chamber, and one of the most successful lobbying groups, to an utter pariah among the general public, the government, and even the other big business groups.

Generational trends away from smoking made it possible for the anti-smoking groups to convince larger and larger swaths of the population that the tobacco companies are evil and need to be stopped. With their doom becoming more and more certain, there was no longer any point in the tobacco companies trying to lobby for deregulation, and therefore no point either in staying in the Chamber of Commerce coalition.

In fact, with the tobacco industry out, the remaining Chamber industries could now openly attack and distance themselves from an industry that would only impose costs on them and provide no greater benefit. One corporate group against another.

The tobacco case was an isolated example due to a generational trend in one domain of life. But now that there are populist rebellions firing off across the political spectrum, from Trump supporters to Sanders supporters, it will be easier to hammer away at the underlying cracks in the corporate coalition, dividing them and then conquering them.

Two of the biggest players in the Chamber are the pharmaceutical and insurance industries, who impose massive costs on all other industries by adding the skyrocketing costs of healthcare onto corporate balance sheets.

America is the only rich country without a national health plan of some kind (typically it is single-payer), which drives up costs as the healthcare providers can easily swat down small enemies like individual workers or their employers. It's impossible to swat down the entire nation, which is why the single-payer countries pay far lower prices for their healthcare (per capita, as a share of GDP, for a given drug, etc.). The national purchaser buys in the largest wholesale quantities, so they can easily negotiate the prices far below the retail level.

Even worse for employers, healthcare costs are highly variable from one year to the next, and in ways that are not merely canceled out across the risk pool of employees. If there's a nasty epidemic one year, one employee's higher healthcare costs will be correlated with other employees' higher costs. It's not like random accidents like falling and breaking a wrist, which are not correlated. Higher variance means more risk, and employers don't like that. It makes it harder to work healthcare costs neatly into their overall compensation packages.

And unlike simply giving their employees more cash instead of healthcare benefits, the healthcare package adds all sorts of administrative costs from being tied to the adversarial and stingy for-profit healthcare providers.

All in all, it's a great big headache that employers in all industries would be happy to just cut loose and let the taxpayers worry about it instead. That's how it's done in the single-payer systems. For example, Australians pay a 2% income tax (a further 1% if you're rich), and those tax revenues go into a national fund that pays out to private or public hospitals when citizens use their services. Obviously that's a gain for citizens, too, since 2% of your income is a lot less than all the premiums you pay over the course of a year (unless you're rich).

However, the insurance and drug companies want those prices to stay sky-high, and that's their non-negotiable agenda in the Chamber of Commerce coalition. The other industries accept the headache of having to pay for their workers' healthcare, as long as the circle-the-wagons behavior gives them something of their own in return.

But what if those other industries' goals are now appearing doomed to failure?

The single greatest focus of the Chamber in recent years has been passing the TPP corporate globalist trade deal, which like NAFTA would benefit the industries that off-shore their labor into the cheap third-world countries and pocket the savings in massive profits. That includes manufacturers but also tech industries that move call-in centers, customer support, etc., into the third world.

Within the first week of Trump's presidency, he killed the TPP and made it clear that no such similar trade deal will ever be signed again. He's even going to go back to NAFTA and tear that one up too. Suddenly the political climate is so bitterly opposed to these corporate trade deals that there's no point in trying to write them and have them passed through Congress anymore. They're dead, and they're not coming back to life within our lifetimes.

Any industry for whom corporate trade deals were the raison d'etre for belonging to the Chamber of Commerce are going to ruthlessly reconsider just what they're going to be getting out of their membership, and how much they're spending to be part of the club.

Likewise, one of their most fought-after goals has been amnesty for illegals and open borders to all immigrants. This drives down labor costs by expanding the supply of labor to effectively include the billions around the entire world. You want more than ten bucks an hour? It's a shame that there's some foreigner willing to do it for five.

And yet just like the globalist trade deals, the globalist immigration plan has gone up in a puff of smoke with the election of Trump. Any industry that was pouring money into the Chamber in pursuit of open borders has suddenly lost their motivation to renew their membership.

The main industry that has seen its dreams vanish into thin air is manufacturing. They relied on globalist trade deals to off-shore labor to cheap countries, and to bring in hordes of immigrants to undercut wages at home. If you haven't noticed, they've also been the most compliant with the Trump agenda -- re-investing jobs and plants back here in America. They are not happy or eager to lose those labor savings from third-world workers, but they know that they are now in the same position as big tobacco trying to push for deregulation to a generation that has never smoked.

And now that manufacturers are drawing minimal benefits from the Chamber coalition, the massive healthcare costs imposed on them by the drug and insurance industries are going to really sting. They are no longer off-set by larger gains from mutual aid among big industries. Sky-high healthcare costs also make manufacturers less competitive than their rival companies from countries where healthcare is paid by taxpayers, not employers.

I would not be surprised if the manufacturing sector became a lot more supportive of single-payer or similar healthcare reforms.

The retail sector is another big player who has seen its big dreams evaporate due to "hire American" and "buy American" becoming national policy. Cheap Chinese crap allows a higher profit margin than well-made and more costly American products. Illegals can no longer be used as cheap labor for brick-and-mortar stores. Home Depot and Walmart are in desperate need of a boost to their reputations, and supporting universal healthcare is big enough to do it.

At the other end of the spectrum, there are industries who appear to be getting their way so easily with the Trump administration that they don't even need to bother lobbying Congress. The oil and energy industry is the big winner here, with Trump approving the pipelines that had been held up forever, promising to put coal back into play, slashing all sorts of regulations, and dismissing climate change as a reason to put the brakes on the energy industry.

At the same time, it's not as though deregulated energy was a central plank in the Trump platform, and it could go away under a different populist Republican, let alone a populist Democrat like Bernie.

At least for the time being, the big oil companies do not need to waste tons of dollars, political capital, and public reputation, defending the corporate rape of the healthcare sector by the drug and insurance industries. They'd be happy to be rid of healthcare costs on their balance sheets. That doesn't mean they have as much motivation as manufacturers to support single-payer, but it may mean they just stay out of the fight.

There aren't too many other big players in the Chamber to come to the aid of the drug and insurance companies -- banking / finance, really. And Trump saw to it that reinstatement of Glass-Steagall was put into the Republican platform last year, so their days of laissez-faire pillage may be coming to an end, too, and therefore have less of a reason to be top-tier members of the Chamber.

Even with the two healthcare industries, Trump could split them apart by pushing first for the negotiation of prescription drug prices. When Medicare Part D was signed into law by Republicans in Congress and W. Bush, there was an explicit carve-out that the prices would not be negotiable -- corporate rape would be the rule. When the Democrats in Congress (insincerely) tried to pass this as a separate piece of legislation in 2007, Republicans stopped it and re-iterated their pledge to corporate rape in healthcare.

Trump, however, has been pushing for this policy single-mindedly on the campaign trail and in office. It's the only specific issue he ever addresses regarding healthcare. If the populist movement manages to kill off that big goal of the drug companies, they will have lost a major stake in their Chamber of Commerce membership, if not all of it.

Then they could be played off against the insurance companies. The high premiums that insurance companies charge make it harder for the insured to consider drugs a worthwhile investment -- and that's lost business for the drug companies. But if the drug companies were muscled into lowering their prices, they could argue for the insurance companies to lower their premiums and include the now-cheaper drugs, expanding their market. The drug companies would be compensating, somewhat, for lower prices by selling in larger volume (i.e. by being included on more insurance plans).

It's not inaccurate to talk about "big business" or "corporate interests" as a monolithic thing, since they all do want the same abstract thing -- elite control over society. But they are distinct industries with specific concerns and agendas. The Chamber of Commerce is a coalition of disparate factions, sometimes cohesive and sometimes fragile.

As they became stronger, they got overly ambitious and self-assured of their invincibility, leading them to champion the most offensive policies -- banning the negotiation of prices for healthcare bought in wholesale quantities, the right to make teenagers addicted to poison, national citizens being replaced by fungible global labor-units, and so on and so forth. This sparked a populist and nationalist revolt, which will pick apart the factions one at a time, playing each conquered group off against the surviving groups until all are brought under control.

The Trump movement has proven that you can "fight City Hall," and it will prove you can bend corporations to the popular will. Chamber schmaymber!

6 comments:

  1. Random Dude on the Internet3/28/17, 9:24 PM

    I remain skeptical in terms of any corporate change. I work for a very large company and they are moving full steam ahead with their Obama era initiatives because they are afraid that if Trump gets thrown out in 2020 that there will be retribution for those who follow along with Trump's initiatives. I think the big change is going to have to come from small businesses. As small businesses become increasingly favored because their views and philosophies are more in line with the public, the larger businesses, to avoid being outwitted by smaller firms, will eventually begin changing direction.

    People still have a fear of leftist bureaucrats who can make the lives of businesses and individuals hell. Maybe Trump can assuage fears by neutralizing and downsizing their size and scope. He has taken steps already in this direction but this is something he's going to need to fight the remaining 7 years and 10 months he has in office. The bureaucrats need to be servants of the public. He can offset his tax cuts and his budget by slashing the millions of redundant bureaucrats who were hired mostly as patronage style positions to get more Democrats to the voting booth.

    ReplyDelete
  2. Corporate change is already happening -- all those jobs and plants moving back to America. It's just the start of the ball rolling, because they know that Trump and after-Trump is going to be a climate where NAFTA, TPP, etc. are total non-starters. They will get crucified for even drafting another one of those deals.

    Hiring illegals -- is that staying the same, or getting worse? They know the cheap foreigner ship has sailed.

    What's going to keep the industries that do not profit from healthcare from jumping at the opportunity to finally offload healthcare benefits from their balance sheets? Before it was corporate solidarity, but if they aren't getting much in return, they won't fight tooth and nail to keep corporate rape as the healthcare model.

    Some companies may be delusional -- and they'll go under. Look at Macy's. That isn't going to stop corporate change, though -- it will accelerate it, by removing the most stubborn elitists from the corporate genepool.

    ReplyDelete
  3. "It's not inaccurate to talk about "big business" or "corporate interests" as a monolithic thing, since they all do want the same abstract thing -- elite control over society. But they are distinct industries with specific concerns and agendas. The Chamber of Commerce is a coalition of disparate factions, sometimes cohesive and sometimes fragile."

    I think they greatly prefer societal control over pure profit, but that means the ones who prefer profit are less elitist. It's relatively humble to only commit theft, not enslavement, abuse, rape, etc. Of course this difference is slight now, but before, I think there was no difference at all.

    The nice thing is that while elite priorities are splitting up, citizens' priorities are unifying, overall. Ruling neoliberals consider Trump, Pence, even Californian Green Party voters like me to be like the anti-christ, just because we do not say, "yes, rape away, ladies and gentlemen!"

    I don't think it's accurate to say "rape," because voters are seduced into acquiescing to this exploitation. It's coercive, but more like sexual seduction than physically violent rape. People won't take rape seriously as a description, unless there is something harmful in a physical way. Liberals sincerely call installing electricity "SmartMeters" rape, because they allegedly cause severe illness. But we don't even have the words we need for describing all these different forms of abuse.


    The "partisanship" issue is not getting worse, just because of escalating political violence. I think cocooned people assume outgoingness is purely violent, and don't notice that a shift from rhetorical and white-collar-style conflict to scary, physical violence will always feel like an escalation, even if most people feel neutral, not fiercely combative.


    To the right wing, government elites are more threatening because they seem to control law enforcement and the military. That leads to apocalyptic death camp nightmares, not just overpriced services and bad jobs. I think the right-wing is more concerned by sudden, drastic, unlikely threats, like terrorism, than existing, gradual threats like radioactive tobacco (which most people don't realize contributes to tobacco-caused cancer).


    I am surprised left-wing people trust government so much, and can only oppose it by accusing it of being fascist or corporate-run. They're assuming that bureaucracy itself is benevolent, and capital (industrial wealth) is the most corrupting form of wealth. I think luxurious state pensions are bad too, in that they turn government workers against everyone else, by insulating them from the labor marketplace. If foreign invaders were able to be President and have gov't jobs, we would never have such a tremendous, historically unprecedented invasion. Transplants are foreigners though; they act foreign.

    ReplyDelete
  4. @DB
    Left-wing people trusting government is no surprise when you consider r/K selection theory. Being anti-competitors they loathe the competitive environment of capitalism and seek government to suppress competition while making exceptions for themselves to allow themselves better reproductive success this is all unconscious of course but it makes the most sense.

    ReplyDelete
  5. But enough about corporate managers

    ReplyDelete
  6. "Left-wing people trusting government is no surprise when you consider r/K selection theory. Being anti-competitors they loathe the competitive environment of capitalism and seek government to suppress competition while making exceptions for themselves to allow themselves better reproductive success this is all unconscious of course but it makes the most sense."

    I almost totally disagree with you on outcomes, John. I'll mostly concede the theory, to be accommodating.

    They don't trust government to have a military or enforce norms, meaning, doing politics. They trust it to be social and economic, like a king and his court. They don't want knights/ kshatriyas, or priests, brahmins, in the terms r/K Aryanists prefer. Leftists like merchants, jesters, friars, whores... fun- and comfort- providing people. Not armed enforcers.

    They do compete, everyone competes. Capital is non-competitive. Workers and owners,tribes and nations, men and women, etc. compete- competition is between conscious entities, not their ideas, wealth, or respective powers.

    Liberals make exceptions even when it's at their own expense. So they're "pragmatic idealists"/ ideologues, who stick to their "principles" as a shortcut to what they feel they prefer and think they need (generally, wants are emotional, needs are mental, according to r/K enthusiasts, who are male-minded. I disagree with this cognitive allocation.).

    Liberals don't value reproductive success through genetics- as long as their ideas and lifestyles are taught to all the youth, they're satisfied. They would be less satisfied raising their own children, because they feel actual, physical activity, is inefficient. They prefer, most of all, court rulings. That's their ideal. The K ideal, in this myth, is Noah's ark. So K depends on catastrophism, and r, on moral decadence. They're quite similar... underneath the surface. Both expect bad things to happen no matter what we do. r's conclude, let's have fun while we can, and maybe even longer than that, because hedonism is gnostic/ magicalist... while K's want to suffer for some later martyr's benefit. They believe "more pain, even more gain."

    Basically, both are sensual, and wordly time-obsessed. Good stimulus for thought though, John. Thank you.

    ReplyDelete

You MUST enter a nickname with the "Name/URL" option if you're not signed in. We can't follow who is saying what if everyone is "Anonymous."