Paul Kanjorski: Government Can’t Control Multinationals Anymore
I confess. When I read Zach Carter’s account of his interview with Paul Kanjorski, my first response was to wonder why HuffPo had decided an interview with the former Congressman would make for the (admittedly very fascinating) article that resulted.
Turns out the reason is Bank of America’s woes; as one of the champions of breaking up the banks in Dodd-Frank, this ought to be an “I told you so” moment for Kanjorski, because had we already broken BoA up, it would have forestalled some of the difficulties we’re likely to experience in the near term.
And Kanjorski did address that, intimating that regulators who had left the Administration, like Sheila Bair, had been willing to entertain taking such step, but those who remain (Carter notes that Tim Geithner recently decided to stick around) basically made an agreement with the banks not to use Dodd-Frank’s authority to break them up.
But Kanjorski framed all this within the larger question of whether multinational companies have simply become too big for mere governments to control anymore.
“Because [corporations] have become so international and global in nature, it’s highly questionable whether governments can actually control corporations to a sufficient degree to prevent them from controlling governments,” said Kanjorski,
And he then demonstrated that principle in his discussion of discussions about a tax holiday, which would allow tax cheating corporations to bring money back into the US but only pay cut rate taxes.
“I’m not saying we shouldn’t adjust our tax code otherwise — there are thing we need to do there — but to give them a free ride, what are you encouraging? The next guy who doesn’t like the law will just do the same thing,” Kanjorski said of the proposed tax holiday. “The reality is, why should we be bargaining with super-national corporations who are actually acting against our interest in avoidance of what our law is? We are impotent to get them to respond.”
This takes the argument of Treasure Islands–that corporations are using secrecy havens to avoid taxes–to the level where a former senior legislator of the world’s economic powerhouse admitting to impotence in the face of the corporations because of their size and multinational status.
And he notes something often forgotten in DC: that these are no longer American companies, and their interests do not coincide with our interests.
Of course, that’s not necessarily going to help us, given that Kanjorski’s watching from the private sector as top financial regulators still do act as if these multinationals’ interests coincide with ours.
Well said, but there are options that no one trying to fund their political ambitions will do [cough cough, Kamala, cough cough]:
1. We can try them and jail them. Even so-called St Ronnie did that in the S&L scandal.
2. We can force them to be American again. No government contracts without the American headquarters, no more overseas tax breaks, etc. If that means divestiture, so much the better.
Otherwise, there is no loyalty to anyone other than the corporation (and frequently to the politically-connected cronies within the corporation). While that may be the way to world peace (doubtful), we should at least make Exxon hire its own armies if it wants to steal Iraqi oil or build the Afghan pipeline. Xe or Triple Canopy would do it… for a fee.
@rugger9:
American Rhetoric: Movie Speech
“Network” (1976)
Arthur Jensen Pitches Howard Beale
Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it!! Is that clear?! You think you’ve merely stopped a business deal. That is not the case. The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance!
You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels.
It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU WILL ATONE!
Am I getting through to you, Mr. Beale?
You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today.
What do you think the Russians talk about in their councils of state — Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.
We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that perfect world in which there’s no war or famine, oppression or brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused.
And I have chosen you, Mr. Beale, to preach this evangel.
American Rhetoric: Movie Speech from Network – Arthur Jensen’s …www.americanrhetoric.com/…/moviespeechnetwork4.html – CachedSimilar
Full text and video and audio mp3 of movie Network – Arthur Jensen Pitches Howard Beale.
Well, if Kanjorski wants to really contribute to the discussion, he could come out with exactly what happened in September 2008 that led the Fed to close its discount window after something like $550 billion went out in the course of a morning. Kanjorski slipped once and almost told what it was, then got control of himself and shut up.
Until then, he’s just sending us another dispatch from the Department of Obvious Stuff We Already Know.
Kanjorski, very carefully refrained from taking his former colleagues, his fellow Congressional members, to any very serious task.
He also refrained from speaking out, in a decidely PUBLIC fashion about any of his deeper realizations until leaving PUBLIC office. One imagines that he must have had intimations of these difficulties, frankly, these very serious threats to democratic governane, somewhat earlier. If he is now saying that corporations, specifically banks, are too big for government to “control” them, then this theory must have been developing for some time, one imagines; a time in which Mr. Kanjorski, unlike federal judges, was NOT constrained by the “deference” of prudent jurists, but rather by political calculation alone…
Regardless, Kanjorski’s voice was most distinguished by its absence in addressing such concerns to the Citizens of this nation, by its lack of detectable volume and by its essential constraint.
One notes that other voices are, NOW, being raised, somewhat, and more broadly heard. For example, Nasim Taleb, speaking with the BBC says that the banks “hijacked the government” that, basically, they “took over” the American government.
Now, EW, you have been expressing such concerns for more than a little while, as have others, including, as I admit, I have done for more than a few years.
Those whom I mention in the last paragraph did not (although your influence is growing rapidly) and do not have the platforms available to Kanjorski or to Taleb, but especially to Kanjorsky.
Waving one of the few remaing “straws” from what seems, increasingly, like the “camel’s back” … “better late than never”, might not be the greatest of virtues, but it is “something”. One wonders, though, if that something might just be part of “too little, too late”?
I shall be somewhat more impressed with Kanjorski’s late-blooming candor if he does not find himself well-rewarded, somehow, on the other side of that renowned “revolving door”.
Even as I wish that such candor, as it may be, had found voice in more timely and useful fashion.
Kanjorski is from Penns Woods, so I have more than a little interest in his doings.
DW
@scribe:
Precisely, scribe.
And I do hope, most sincerely, that we shall not be subjected to a plethora of comments to the effect that:
“They are ALL being blackmailed …” as too-often happens at another site. When questioned, those who espouse this conviction reply almost inevitably, that the “proof” that such “blackmail” is occurring, is to be found in the total lack of evidence that it is occurring.
DW
i don’t believe for a minute that any corporation, specificallly including any multinational corporation, is beyond controlling by a large nation-state.
what is needed is political will, new focused law, and political leadership.
is visa multinational?
did visa not cave when faced with a lawsuit in europe regarding their refusal to pass on contributions to wikileaks?
did toyota not lose it’s indifference in the face of accidents in the u.s. ?
is microsoft not being pushed in the european market to share its code?
– do european and asian manufacturers not follow american energy and safety regulations?
– does anyone really believe that china holds the view that multinations operating there cannot be controlled by the chinese national government?
i think kanjorski is talking nonsense,
or, more kindly, is thinking shortsightedly in terms of our present political rules, regulatory customs, and existing laws
the basic solution to controlling any corporation operating in the u.s. is
– to deny corporations any and all access to the political system, specifically including lobbying and contributions.
– to forbide revolving door govt-to-business-to-govt-to-business personnel transactions
– to use the enticement/threat of access to the very large and wealthy american market
– to require that income earned here not leave the country until taxed as per (new) law and regulation
oh, and one thing more,
to change all ethics codes and laws for lawyers in the u.s. to place a very specific burden on institutional lawyers, i.e., corporate or govt lawyers,
– to not hide or destroy nor encourage or protect others from hiding or destroying institutional documents
– to not skirt or ignore laws and regulatory rulings
– to not engage in public lying or evasion and not encourage or advise others to do so.
Government MUST be made as powerful as the most powerful combination of corporations, and must be freed from the clutches of those corporations and their bosses and lobbyists.
I’m not saying I know how to make that happen, but we have to find a way.
Carolyn Kay
MakeThemAccountable.com
I was thinking the other day about Abraham Lincoln,the “Great Emancipator” -i.e.,ending slavery.
I began wondering just who will be our “Great Emancipator” ,to “free “the present (and future ) wage slaves and indentured servants of this corporation nation from their enforced bondage?
Saw Simon Johnson speak at Harvard Law School back in January. He talked about the transition from “too big to fail” to “to big to save.” Gathered then that he expects another round of financial collapse which will result in “too big to save” taking down national governments and treasuries. Prolly right.
I got some raspberries, cukes, and broccoli from my garden today and the pantry is full. Take care of yourselves and each other. Money is worth less than skill and smarts.
gmoke @11 mentions hearing a lecture by simon johnson.
here is a cite for a rather famous article he wrote in the atlantic monthly a couple of years ago.
it was one of those articles, one of those few articles, that actually stick with a reader well after the magazine has been recycled.
rats!!
cite is:
http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/
the article captures much what we have been trying to puzzle out here over several months of emptywheel posts and ensuing discussions.
Corps derive their legal status from government.
Power is like ‘rock, scissors, paper.’
Is wrong to claim that rock trumps paper.
Paper covers rock.
Shaxson’s, now Reuters, and Tax Justice Network, + EW make this simple and obvious.
However, after Citizens United, it takes someone with the willingness to forgo corporate money with strings [i.e. Sanders], and can be certain that the same corporate money won’t be used against them [see Feingold, Russ] in elections to come in order to push this along.
While the Amendment is a great idea, there is only a couple of Congresscritters who would vote for it. Everyone else would consider it biting the hand that feeds them, which would then feed their opponent.
Just as an exercise, how much would it cost to buy up all of the air time available in a district, state, or in America? Because, that’s what the plan is, even allowing for free air time on Faux for the GOP.
@DWBartoo:
Blackmail in this case takes two forms, because the money can be used to buy or to wound. And it is why the TEA party scares so much, they have a reliable Faux mouthpiece.
@orionATL: That is a fascinating read! Too bad that the people who think they are so smart probably could not understand it…
Sure hope Kanjorski was just speaking up at some random time (Johnson too). Because as someone up thread almost said, the bigger problems could be in some of the newly evaporated European states with banking sectors several times the size of their gdps.
@prostratedragon:
The “biggest” problem is that the US government is in thrall to the too-big-to-fail money-interests and therefore what needs to be done … “nationalizing” the banks, “publicly” putting money into the “private sector” which is Main Street, by any number of ways, including rebuilding the infrastructure that men, yes men particulary those who have little or limited higher education, may begin earnning again … as well as seeing that the newly “nationalized” banks actually LEND, and helping, somehow those “underwater” and “under”-employed … is simply NOT GOING TO HAPPEN because MONEY does NOT want it to happen. The oligarchs are willing to destroy civil society, here, in the US… and when that happens the whole world will be “negatively” effected … in ways which the people of the US will be little interested in, for a DEPRESSION far more deep, lengthy, and destructive than the
“Great Depression” will be occupying all of their thoughts and lives.
Nothing can or will change until the whole house of cards, built of marked decks, dealt under the table, has come down.
Then, if we are wise we will buid on more sane, rational, reasonable, and humane foundations.
It is ALL up in the air and about to crumble into unimaginable catastrophe. Some pans for rebuilding ought, NOW, be considered.
DW
@DWBartoo:
That should be… “plans should NOW be considered.”
(The whole world needs an “edit” button)
DW
@Gitcheegumee:
Sounds like a replay of “1984” and “Brave New World.”
Bob in AZ
@scribe:
“We already know” about that stuff because of what Kanjorski told us in 2008.
Bob in AZ
@Bob Schacht:
That’s interesting, Bob, I must have missed those insights shared by Kanjorski. Which might have been lost in the “sexed-up” run-up to the 20008 Presidential sweepstakes?
I put a wee essay up at FDL, somewhat more than a year ago, entitled “The Age of the Divine Right of Money” which was specifically about the transfer of power from sovereign governments to the transnational corporate class, a power shift not unlike the power-shift which occurred in the so-called Middle Ages, when Royalty could no longer finance their little war games, having lost control of the “wealth” of nations to the merchant class. Royalty then had to give power to the merchants by making the “interests” of the merchants the “interests” of the state.
Now, the “merchant class” wants and HAS total control of ALL aspects of government reaping profit from most governmnetal “endeavors” and endeavoring to make the “business model” the essence of governmental behaviors, even as the government happily “privatizes”, at the behest of the oligarchs, what should be PUBLIC actions and resources. This essay, btw, was written in 1997 …
EW has spoken to these matters for a considerable period of time and I’m curious as to how much of her concern and insight stems from what Kanjorski revealed in 2008?
Ian Welsh also has long spoken of his concerns, and again, I wonder how much of a role Kanjorski’s “telling” played in Ian’s development of those concerns?
I wonder if scribe knows because of Kanjorski’s comments?
As you by now have quessed, I do not think or imagine that you are correct to suggest that Kanjorski was the sole or only source of our knowing or suspecting the crisis which we, now, ALL face … in other words.
DW