Now Age Minute - 10.13.09
The Pubic Option
As our elected prostitutes in Congress (Baucus & Friends) pretend to debate various bills to reform health insurance, trying their utmost to give us an illusion of a "public option" in the final bill, results of thirty years of deregulation continue to take a toll on ordinary, working Americans. According to a story from the NY Times:
For most of the 133 years since its founding in a small city in Wisconsin, the Simmons Bedding Company enjoyed an illustrious history.
Presidents have slumbered on its mattresses aboard Air Force One. Dignitaries have slept on them in the Lincoln Bedroom. Its advertisements have featured Henry Ford and H. G. Wells. Eleanor Roosevelt extolled the virtues of the Simmons Beautyrest mattress, and the brand was immortalized on Broadway in Cole Porter’s song “Anything Goes.”
Its recent history has been notable, too, but for a different reason.
Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.
For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company’s downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees — more than one-quarter of the work force — laid off last year.
But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.
After returning to his family, in the Bronx, from duty in the Navy at the end of World War II, my grandfather on my father's side set out to open a retail shop that sold basic household goods, a housewares store. From those humble beginnings, his store expanded to a variety of locations around the city, till ultimately, in 1967, he opened at a location in the suburbs with my dad, where we had moved a few years earlier. Along with my brother and sister, I grew up in that business. In high school, our friends found after school jobs there. For twenty years, my dad's store was a staple for local homeowners throughout the county in which we lived. That all changed, however, in around 1988, when the Bed, Bath and Beyond superstore opened just down the block. The era of the local, family-owned businesses had given way to large-scale, corporate retail. Pretty soon, the downtown shopping district of most towns in America began to look eerily the same. Except, of course, for the Local Interest section of the Barnes and Noble store.
In a column last week for the NY Times titled, "Have Banks No Shame", this past week, Joe Nocera wrote about how the big banks are pulling out all the stops to kill consumer protection reforms that the House Financial Services Committee is slated to consider this week. Nocera writes:
A few months ago, I asked Simon Johnson, the former International Monetary Fund economist, now a prominent critic of the banking industry, what he thought the banks owed the country after all the government bailouts.
“They can’t pay what they owe!” he began angrily. Then he paused, collected his thoughts and started over: “Tim Geithner saved them on terms extremely favorable to the banks. They should support all of his proposed reforms.”
Mr. Johnson continued, “What gets me is that the banks have continued to oppose consumer protection. How can they be opposed to consumer protection as defined by a man who is the most favorable Treasury secretary they have had in a generation? If he has decided that this is what they need, what moral right do they have to oppose it? It is unconscionable.”
I couldn’t have said it better myself.
Last week we also learned, that since becoming Treasury Secretary, where Geithner's ear has been tuned. According to a story from the Wall Street Journal,
Treasury Secretary Timothy Geithner has kept frequent contact with an exclusive group of Wall Street executives since taking the helm at the Treasury, speaking most often with top officials from Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Citigroup Inc. and BlackRock Inc.
Calendars released by the Treasury Department in response to a Wall Street Journal Freedom of Information Act request show more than 80 contacts between Mr. Geithner and financial titans such as Lloyd Blankfein of Goldman Sachs, James Dimon of J.P. Morgan, Citigroup Chairman Richard Parsons and Laurence Fink of BlackRock from January through July.
What Michael Moore makes so clear in his film, "Capitalism, A Love Story", that the deregulation of Corporate America that began under Reagan, and amped-up courtesy of Clinton and Bush, has created a situation where the US Government is now a functioning arm of Wall Street. The effect being that the screwing we took by the big banks is about to be exercised by the health insurance giants, in the form of a government mandate for all Americans to buy health insurance, mainly from for-profit providers. I call it, the Pubic Option. The option being how we choose to pay for it. "Will that be credit or debit Sir/Ma'am?"
When President Reagan famously told us that "Government is not a solution to our problem, government is the problem," he was priming us for the deregulation of Corporate America that he, and his power backers had been clamoring for, as a movement, since the New Deal, and the New Deal's goals to create and sustain a middle class, as a means to actually move up the socio-economic ladder, if one wished to. But, by gutting governmental agencies (except the military, of course), and filling the positions remaining with the corporate cronies those same agencies were mandated to regulate, he made certain that government no longer worked. Even the military now is largely outsourced, paid for at public expense, of course. It's obvious to me that, since Caveman days, not much has changed. Except, perhaps, the outfits.
Is it possible that the government/industry forces, with the good efforts of citizens like my grandfather, after defeating tyranny overseas in World War II, turned their sites on those same citizens, to ultimately defeat and imprison them in a society beholden to the big banks? In one of his last novels before his death, "The Castle in the Forest", Norman Mailer wrote a tale about the childhood of Adolf Hitler, narrated by an agent/devil of Satan, who's mission it was to shape the mind and guide the upbringing of young Adolf. The story ends with Hitler as chancellor, and the devil's task completed. But leaves the reader hanging with the following statement from the narrator,
The Maestro had just relieved me of service. "For now, fend for yourself", he said. "I will be moving our operations to America and will call on you again once I have come to a few determinations as to what we are ready to do over there."
I wonder what Mailer was getting at?
-Craig Gordon
