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Peace and Expansion Versus War and Destitution

February 1st, 2011 · 4 Comments · Capitalism, Corporations and Industry, Economics, Politics, wars and militarism

We live in a world of political chaos. The single most important problem we face is the ascendancy of the rich. In itself, there is nothing wrong with becoming both rich and powerful, so long as society has sufficient methods and men of integrity to act as a check on that power. So now we have so many rich, even so many billionaires…over 400 in the U.S…that we have the “good rich” and the “bad rich.”

A good example of the good rich is Bill Gates, the co-founder of Microsoft. He and his partner, Paul Allen, developed a system for creating instructions for personal computers that would simplify the use of the computer, give it new skills, more skills and faster skills. So that a person could give a computer instructions from a desk at work or at home and accomplish things in the fraction of pre-computer times or things that, in pre-computer times might simply have been far too complicated even to attempt.

Bill Gates built this large organization into the dominant enterprise in the computer era. His goal was to do more, to it faster, do it better, and do everything that his team could imagine could be done or simplified on the computer. But, in doing so, his success crowded out others.

Government stepped in, officials friendly to Gates and Microsoft, but nonetheless men of integrity, and said that his success was crowding out other innovation. The result was a check on his growth in certain areas.

That did not stop him. He was fixed on his work and he and his team simply shifted emphasis and redoubled their efforts, expanding even faster, but in a way that offered others similar opportunities. Gates and others, many who developed companies in the late 1990s are examples of what became a group of new, sort of “philosopher-industrialists.”

It is said that by the time that Microsoft had 30,000 employees, 10,000 were millionaires. Whether completely accurate or not, it is representative of a new management philosophy of the hi-tech era. Make something dramatically different and useful. Get rich in the process. Then, enjoy the ride and share the wealth with co-workers.

In the Clinton era, innovation and imagination and dedication drove our young scientists and technologists and engineers to new and interesting heights. For nearly ten years we grew at a dramatic pace. Some critics said at an almost reckless pace.

Some of the little companies that started in the Clinton era may be familiar to you: Amazon opened its Internet doors in 1994. DirecTV also began in 1994 (if you are not familiar with them: 2009 revenues: $17 billion.), Earthlink also started in 1994 (2007 sales: $1.2 bil.), and Dreamworks, 1994, (2008 sales: $4.5 bil.)

Some other less hi-tech but equally popular firms that started in 1994, were some not-so-high-tech names, but just as popular, such as Rainforest Café, Famous Dave’s and Joe’s Crab Shack. That was just 1994 and obviously there were hundreds of others.

It’s not all about money. Among those companies started in 1994 was Advanced Cell Technology. Not as much fun-sounding perhaps as Famous Dave’s, certainly not for barbeque lovers, but for those with heart disease or retinal blindness it undoubtedly is.

Some things take time. Founded in 1994, Advanced Cell Technology has been researching stem cell solutions for certain kinds of blindness and heart disease. In 2010, they were able to conduct the first clinical testing of those treatments. Soon they will be making the blind see, and those dying of a bad heart valve live many more years. And life is the greatest gift of all.

The year 1995 saw the founding of Ebay and Yahoo and Extended Stay America. In 1996, DISH Network started, ($11 bil. 2008) and Qwest ($13 bil. 2007) and Juicy Couture. In the year 1997, we saw the inception of a number of companies, like GoDaddy, and Blackwater and Netflix and TiVo.

In 1998, well, let’s see, you may have heard of…Google. Other companies included NetZero and Monster.com and Native American Services Corp. and Alibris. By 1999, we had begun thinking seriously of alternative energy. First Solar began in 1999. Today they have revenues of $2 billion.

By 2000, however, more and more companies were being created abroad, in Europe, Scandinavia and Asia. Some of the trade agreements were creating wage disparities and some companies were legitimately having competition. By then, too, Americans were becoming a little complacent. By 2000, the United States had been in serious growth and prosperity for the longest consecutive period in our history.

It wouldn’t continue under Republicans. They had their own ideas about the way to grow business and how workers should be treated. Their idea of success was to grow big corporations by merging one big bank with another and cutting the work force.

They did the same with big telecommunications companies, merging them with bigger telecommunications companies. But by 2000, the new companies, the startups, like Netcordia or Impinj, were spin-offs of academic pursuits. Money for new enterprises and for entrepreneurs stalled under Republican emphasis on their large corporate donors.

We needed another shot in the arm. We needed the government to drop in and sound off. We needed someone to tell the world that this was a good place, a great place to do business. We needed to get back to starting businesses.

But the new Bush Administration was looking in a new direction. The people behind Bush, the people who had invested in his Presidency…$60 million for the campaign in the bank before he made one single speech…those people wanted payback.

They were oilmen and pharmaceutical companies and—in those days—tobacco companies. The tobacco companies who could count on people like “Tobacco John: Boehner in the House of Representatives. They had not calculated on the fervor of an organized group of state attorney generals who were about to deal them fits.

The Bush Administration was not much for innovation. Their ideas were focused more on cutting taxes for the rich…Bush’s Primary objective. They were allies were military contractors and military contractors focus on war. So Bush and Cheney helped out. They arbitrarily designated Saddam Hussein and Iraq as a target of war. And of course, there was the part about helping their Texas oil patch billionaires.

Within days of taking office, Dick Cheney held a secret energy summit at the White House. Invited were ENRON, EXXON, and the other oil company executives. One of the topics, according to those who have had anything to say about the “secret” meeting was that it concerned energy policy. And the policy was: give $36 billion in more tax breaks to the oil companies.

Of course, that meeting did little for gasoline prices…unless there was some agreement to let them rise up to $4.00 a gallon. When that happened–and it did–how, we all wondered, could it happen with two oil men at the helm of the ship of state? Could it be possible they were favoring their oil patch billionaire friends over the country?

Over the years as 40,000 manufacturing plants were moving their jobs to China and India, we got the answer. They were favoring all their friends over the People.

Then, from that first secret energy meeting came the reports of a curious map of Iraq with the provinces divided up with the names of corporations or nations on them. What could that have been about?

There is a lot of oil under Iraq. But it didn’t belong to us. So why would they be looking at a map of Iraq when discussing American energy policy? They weren’t our oil fields. We couldn’t start assigning oil fields to different international oil companies…could we? We could if our Vice President pulled out all the propaganda stops and put on maximum political pressure to create a war. And he did.

Business is business and the Bush business was putting “the war business” in business. Cheney saw to it that Halliburton got over $15 billion in defense contracts. Blackwater, Cheney’s Right Wing para-military group put 120,000 people into Iraq. Others got no-bid contracts…and the investigations go on to this day…like the questions about the 9 American soldiers electrocuted in their own showers…built by a division of Halliburton.

They cut taxes and thereby had to cut government. But they didn’t cut government spending. They simply sold off government property, like land in the National Parks or farmed out government functions to their friends, like the feeding of soldiers to KBR, on which contract they cheated the government.

Making war is not necessarily focusing on creating new businesses here at home, unless you are in the war business. In which case, it is different. Demand goes up quickly when people are blowing up your tanks and trucks and shooting down multi-million dollar aircraft. Of course there were human beings in those trucks and tanks and planes, killing other human beings.

But it is not only the Bush and Cheney greed, leading to the loss of life and the expenditure of over a trillion dollars already on Iraq. Not is it only that secret energy meeting in the White House. There is a history that goes back to 1992, while the rest of us were preparing to create companies and products and jobs to raise living standards for all Americans that would come in the Clinton Administration.

In 1992, Dick Cheney was Secretary of Defense under George H.W. Bush and he was preparing to create his own personal prosperity, using his government contacts. Cheney hired Halliburton to find out whether some things that the military were doing might not be done better by private industry. That’s how government works.

If the government is doing it, challenge it by comparison with private industry. If private industry is screwing it up, hire hiring government employees at lower pay scales but with more secure civil-service-style employment.

Halliburton’s report…the fix was in of course…said that, sure, they could do everything better than the military was doing it. And since their study set up the parameters, naturally Cheney was able to steer contract to Halliburton (via subsidiary KBR).

When Cheney left his position as Secretary of Defense, he eventually took a job as…hello…President of Halliburton. He steered billions dollars in over 2700 contracts to Halliburton while making himself a handy little commission of about $50 million dollars during the late 1990s.

When he became Vice President in 2000 after leaving Halliburton (with an ongoing salary, an unprecedented situation in the history of the Vice Presidency) and created the second Iraq War, he gave over $15 billion in jobs to Halliburton/KBR. No bids. No competition. No problem.

Cheney hired a former three-star general from the Corps of Engineers to become the head of contract negotiation for Halliburton with, you guessed it, the Corps of Engineers. It’s not illegal. In fact, while Cheney was Vice President, 9 members of his “war advisory board” were board members on corporations that earned $76 billion in contracts.

These guys toss your money around like water. They played catch with wrapped bundles of hundred dollar bills in Iraq. Over $9 billion disappeared into the black hole that was Bremer’s provisional government authority in Iraq that has never been accounted for. It was American taxpayer money that disappeared under the supervision of the military and all their pals in the defense contractor industry. Who says war is hell?

But it is not merely Cheney. George Schultz, former Secretary of State, left government to head up Bechtel. Bechtel, a big Reagan supporter, now has a four-star general ruling the roost. Bechtel got $700 million in government contracts for Iraq. Booz, Allen, Hamilton, a consulting firm, had Richard Perle, a top government official in the Bush, Jr. administration and a close associate of Cheney’s on its board. It received $680 million in contracts to do God-knows-what kind of management consulting on the Iraq War.

Bush and Cheney and the military brass and the military war contractors sent 4,500 young American men to their deaths, and horribly wounded another 30,000. They created the overwhelming patriotic propaganda that persuaded these young men and women that it was noble and necessary to go kill Iraqis.

They went and they killed or caused the deaths of at least a quarter of a million peasant soldiers and innocent Iraqi men, women and children. Eventually, the citizens of Iraq had had enough and they began to fight back and blow up Americans everywhere they could find them.

Bush and Cheney and Rumsfeld and McCain blamed it on Al Queada. But it was often merely a citizenry tired of being pushed around. It was all done for money. Blood money.

There it is. A tale of two eras. The Clinton era was one of jobs and growth and American prosperity. The Bush era was one of tax cuts, massive national debt, war, greed, lies, swindles, blood, death and economic collapse.

The aftermath has been a Depression only lightly masked as a Recession because of all the social services fortunately introduced by Democrats decades ago but constantly being challenged by Republicans as…wasteful. Wasteful? As in wasted lives? As in…war?

With the election of the billionaire surrogates, the Tea Party, the uber-conservatives, the totalitarian crazies, the party of ancient superstitions…we can only hold our breath. How much blood do we have left to give?

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4 Comments so far ↓

  • TonyD

    Bill Gates is the good rich?

    Bill Gates refused to give any money to charity. I remember reading articles about 30 years ago where he would repeatedly say that he didn’t care about such things.

    Eventually, groups organized to pressure him to start giving away some of his vast wealth. He still refused. Finally, several large public investment funds banded together and started selling Microsoft stock holdings — that finally got Bill’s attention.

    There are many articles written about how Bill’s Foundation spends huge amounts of money on “charity” that directly benefits his bottom line. Why do you think Buffet likes Bill’s charity so much?

    Don’t believe the PR. I’ve worked at companies that lost contracts when Bill mentioned that customers might start having problems getting both products and support from Microsoft if they didn’t stop buying competitors products. Bill is a robber baron with a good PR firm.

    You really can’t believe any interviews with him. He is very good at spinning things to sound like he really cares, but closer examination generally reveals underlying motives. His public policy suggestions are usually idiotic when closely examined.

  • Joshaughn

    One always wants to believe in the best in people. Gates has now demonstrated a fairly convincing series of actions that give every indication that he is not only willing to part with a very large amount of money…billions obviously….but that he is actively working in trying to improve people’s lives. On the other hand, none of us should fail in being critical of CEOs or owners of companies who lack concern for their fellow man. In fact those kinds of people, powerful people, should be constantly watched and criticized if warranted. The fact is, however, that there is a lack of evidence to the contrary. We’d be interested to see any, if it is available. We don’t have our heads in the sand. Would need to be more than conjecture because the current wisdom is that he is doing a bang-up job at helping people. And no one wants to discourage that.

  • TonyD

    There is only a lack of evidence if one doesn’t read the many articles and books that document his self interest in both the business and the charity.

    I know first hand that Larry Ellison gets cost/benefit analysis of every “charitable” act in order to make sure that Oracle is making more money than any they give away (PR, inches of newsprint saving advertising costs, political influence, public perception, name in front of major purchasers, etc.) And Burger King’s largest charity is helping ranchers (to lower Burger Kings cost) .

    Of course, I worked in the industry. So I know, firsthand, about many of Bill’s dirty tricks that never became public. The products he sank. The people he “threatened”. The competitors he bribed. Silence can be purchased.

    Bill is charitable primarily in areas that will help Microsoft’s bottom line. And while he is so rich that he can throw around some other millions, that is not a good solution for our society. The bulk of his money goes to self-interest.

    And among those who are very technical (I was an Apple Engineer), it is very obvious that Bill either buys or steals most of his “innovation”. He then uses traditional “bullying” to build a monopoly.

    Self-interest is not the same as public interest.

  • TonyD

    And since we’re on the topic of Robber Barons, I also have some experience working with Steve Jobs. When a coworker asked Steve to match a charitable donation ($100), Steve refused. And Steve refused strongly. He said that his first interest is running a profitable business, and his policy is to never respond to such charitable requests.

    And when Steve was asked why we gave computers to schools, he said that we make good profit on such “charity”. First, the typical distribution channel has about 50% overhead and an associated return rate and maintenance cost. Those don’t exist with schools. We could give a free classroom of machines, provide another classroom at 50% off, and charge full price for upgrades to minimally configured machines and full price for software. In addition, there were sales to the families of students at full retail, as well as software developed by those students as they developed programming skills.

    So we made far more money by giving away machines than by selling them through any other channel – both short term and long term. And that doesn’t even account for the good PR and advertising effects.

    I could go on….. But the bottom line is important: Self-interest is not the same as public interest….