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Tuesday, September 27, 2016

The Enterprise Incident(s)




The Enterprise Incident(s),
or,
Why Corporations Cannot Be Trusted to Self-Regulate,
by Liviana (Giovanna L.)


"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it."

~ George Santayana, The Life of Reason, Volume I, Reason in Common Sense, Chapter XII, "Flux and Constancy in Human Nature," Charles Scribner's Sons, 1905


Preface

Some of my readers already know, and others may have guessed from avatars I use in various places online, that I greatly enjoyed an episode of Star Trek (The Original Series) with the title of "The Enterprise Incident."  Indeed, it is my favorite episode of all the Trek series.  As a young child, watching the show for the first time (forty-eight years ago this evening when it was first broadcast on 27 September 1968), I do not recall my response to the episode.  I was too young at the time to have much self-awareness or to remember much of what I was like then.  However, having watched The Original Series (hereafter referred to as "TOS") in syndication for most of my life since then (and now having the entire series on DVD), "TEI" became my favorite episode from a rather early age.  The Romulan commander in that episode (unnamed in the show or the script, but called variously "Di'on Charvon," "Liviana Charvanek," and "Praetor Thea" in the various novels which expanded upon the episode in subsequent years, and portrayed by the actress Joanne Linville) was someone I aspired to be, in some sense, and part of the reason for this, I must confess, is because Spock (Leonard Nimoy) was so damned hot!  But part of it was also because she was a woman with authority, in charge of not merely one ship, but a wing of at least three ships.

For those who don't remember, in this episode, Commander t'Charvon sought to seduce Spock with two goals in mind (at least as far as the episode revealed):  she wanted him, and she wanted the Enterprise, which had violated the treaty between the United Federation of Planets and the Romulan Star Empire by entering and crossing the Federation-Romulan Neutral Zone into Romulan territory.  As the story played out, Spock deceived her, but only in part (as was revealed in the scene in the turbolift near the end).  She did win his heart, but not his loyalty to the Romulan Star Empire;  he did not and would not betray the Federation, and it was revealed also that the entire incident of the Enterprise entering Romulan territory had been a ruse ordered by Starfleet, in order to effect the theft of the new cloaking device then being used by the Romulans, an act, that is to say, of military espionage.

It is, therefore, with some annoyance that I write this particular blog post and give it this title.  I would far rather anything I write which borrows this title be about more pleasant things than the subject matter of this blog post.  Nevertheless, as some of my readers have noticed, I have recently begun a series of posts with the titles of episodes of TOS ("The Alternative Factor," "Bread and Circuses," and "For the World Is Hollow, and I Have Touched the Sky"), and I mean to continue that, for a bit longer at least;  some of the episode titles would be challenging to apply to the sort of blogging I have been doing over the past several months, concerned primarily with social, political, and economic matters.  I cannot see doing a series of posts with titles borrowed from TOS episodes without including the title of my favorite episode, but the only way of which I can conceive doing so at present is to do a post on incidents involving enterprise in the economic sense, and, to tie it (tenuously) to the ideas of the episode, what I will discuss in this post will concern corporate crime, including theft.

Introduction

The word "enterprise" is defined by the Oxford Online Dictionaries, for our purposes, as "a business or company," or "entrepreneurial economic activity."  We can of course substitute "a corporation" for "a  business" or "a company," they being synonymous.

Ayn Rand (born Alisa Zinov'yevna Rosenbaum) was a Russian woman who emigrated to the United States in 1926, aged 21 years.  When she was 12, the Russian Empire fell in the February Revolution, which was followed some months later by the October Revolution, which brought the Bolsheviks to power.  Rand supported the February Revolution.  After the Bosheviks came to power later in 1917, her family's shop was seized and nationalized, which, according to her followers, resulted in "crushing poverty" for the family.  As a consequence of the Bolsheviks coming to power, however, Russian universities were opened to women, and a sixteen-year-old Alisa Zinov'yevna Rosenbaum was in the first group of women to enroll in Petrograd State University.  She and many other "bourgeois" students were purged from the university shortly before graduation, but complaints by foreign scientists visiting the Soviet Union resulted in her (and other purged students) being allowed to complete her work and graduate.  Sometime before this, she had decided to call herself "Ayn Rand" as a nom-de-plume.

After coming to the United States, and eventually getting published, Rand began to fancy herself a philosopher.  Now, this is something I know a fair amount about, having gotten my BA with a double major, and one of those majors was Philosophy, in which my focus was Logic and the history of ideas (as is the usual course of study in undergraduate Philosophy departments these days).  I read a few of Rand's works as an undergrad (not for any class, but on my own initiative), but by no means all, finding them rather unsatisfactory in the philosophical concepts put forth in the pages.  In later years, I learned more about her life, and her attitudes.  Ayn Rand apparently firmly believed that the Soviet Union was a communist nation, and could never get over the facticity (or baggage, if you will) of her family having lost their shop and the subsequent "squalor."  Her "philosophy," then, was influenced by these two things, and she became a staunch opponent of what she thought was Communism and Socialism, conflating the two into a conception of "Collectivism," and based, as she assumed, on a tribalist notion as distinct from Individualism.  The Soviet Union named itself the "Union of Soviet Socialist Republics," and made use of much Marxist and other socialist rhetoric, and was generally portrayed as communist in the West, so perhaps she should not be faulted too much for believing this to be the case.  However, a philosopher ought to examine rhetoric and seek to know if it be true or no.  Not only is "the People's Democratic Republic of China" not democratic, but "the Union of Soviet Socialist Republics" was never socialist, much less communist, and while Tribalism is not radically individualistic, neither is it radically collectivistic (nor, for that matter, is all Socialism collectivist), but rather, Tribalism in its economic aspects is a form of Cooperativism.

Among Ayn Rand's ideas was the notion that any government regulation of corporate activities was undesirable, and she attempted to make virtues of greed and selfishness, regarding altruism as a vice.  A full criticism of her "philosophy," which she named "Objectivism," is beyond the scope of this blog post (if the reader would like to see more thorough criticism of her ideas, I can recommend Adam Lee's two-part series of articles published by Alter-Net:  "10 Things I Learned About the World from Ayn Rand's Insane "Atlas Shrugged'," and "10 Things I Discovered About Ayn Rand's Addled Brain After Reading 'Atlas Shrugged';"  and for a criticism of her ideas in practice, I can recommend Edwin Lyngar's article, "My libertarian vacation nightmare: How Ayn Rand, Ron Paul & their groupies were all debunked," published by Salon), nor is it my intention here (or anywhere else) to defend the USSR (or actual Communism -- however, conflating all forms of Socialism with Marxism is intellectually dishonest, and there are forms of Socialism which are considerably different from Marx's version).  At some point in the near future, I intend to discuss Socialism in greater detail, perhaps as part of a larger discussion of economic theories including Communism, Capitalism, Mercantilism, Feudalism, and Tribalism, but this will have to come after a discussion of the distinctions between Progressivism and Liberalism, because in talking about economic theories, I will have to go into distinctions between, say, Democratic Socialism and Social Democracy (the former is more in tune with progressive ideals, while the latter is more in tune with liberal ideals).

Corporate Criminal Incidents

Twenty years and three days ago, on 24 September 1996, Pete Wilson, then Governor of California, signed AB 1890, the Electric Energy Restructuring bill, into law, it having been passed by the California Legislature without a single dissenting vote.  AB 1890 was supposed to dispense with utility monopolies in California, opening the market and thereby, theoretically, lowering costs to consumers.  What happened in actuality was deregulation of the electric energy industry, massive consumer abuse by the industry, and unbridled greed which led to rolling blackouts and price gouging, which has forever after been associated with the name "the Enron scandal."  Who can forget the Enron traders' callous references to having stolen "all that money ... from those poor grandmothers in California," who were personified as "Grandma Millie" in tapes and transcripts of calls released to the media?  There were eventually hearings and lawsuits, government prosecution and incarceration and/or fining of at least some of the guilty.  The CEO of Enron, however, Ken Lay, escaped the justice of man by dying from a heart attack while on vacation at his summer house in Colorado, three months before he was to be sentenced, having been found guilty on ten counts of securities fraud;  his conviction was therefore posthumously vacated.  One would think (hope, even) that the state government of California, as well as citizens of California and the rest of the nation, would have learned from this experiment in deregulation.   But Jerry Brown is the current Governor of California, and while he may have been at one time somewhat progressive, today he is a cog in the establishment, and that means, among other things, that the state government's control over the industry is once again being questioned and put at risk.

Lest anyone think such excess is restricted to the energy industry (which I cannot imagine anyone who hasn't been living under a rock for the past 20 years assuming), the same capitalist motto is whispered in the ear of executives across the corporate world:  "Profit is success, and success is life!"  Witness, for example, the strange case of one Martin Shkreli, who raised the price to consumers of a life-saving HIV drug by 4000%, without any increase of cost to produce the drug and no justification for the price hike other than his own greed, news of which broke about a year ago, while the pharmaceutical industry tried to pretend that his price hike was somehow uncharacteristic of the industry as a whole.  Daraprim, the medication in question, was raised from $13.50 to  $700, per pill.  Nor did Shkreli start or stop with that single medicine, having previously owned a company which raised the consumer price of Thiola from $1.50 to $30 per pill in 2014, and went on in November of 2015 to buy a majority share in another pharmaceutical company, thereafter applying for exclusive right of sale to another medication.  In December of 2015, Shkreli was charged with securities fraud by the US District Court for the Eastern District of New York, and arrested by the FBI.  In February of 2016, he appeared before the Committee on Oversight and Government Reform of the US House of Representatives, having been subpoenaed to answer questions about the Daraprim price increase.  Shkreli refused to answer questions, on the basis of the Fifth Amendment and on the advice of his counsel.  His behavior in the appearance, and his subsequent social media activity demonstrated what many believe (and I concur) to be an astounding level of hubris and sense of entitlement.  While his criminal case has not yet been decided, he has continued to profit in the meantime, although he is no longer CEO of Retrophin, Turing Pharmaceuticals, or KaloBios Pharmaceuticals.

Now, once again, you would think that people would learn from this example, even though his case has not yet been decided, simply by virtue of Shkreli's notoriety for a while as "the most hated man on the internet," due in no small measure to his price hikes of medications like Daraprim.  Yes, you would think, and hope, that others would have learned from Shkreli's sorry example.  Not so!  Enter Heather Bresch, daughter of Joe Manchin (former Governor of West Virginia, Democratic Super Delegate who supported Hillary Rodham Clinton's nomination for President by the Democratic National Convention, and current Senator from West Virginia to the US Senate) and CEO of Mylan, another pharmaceutical company, who saw to it that Mylan raised the price of the EpiPen, used to treat anaphylaxis, by 461-550% from the time the company secured the rights.  This price hike resulted in a 600% salary increase for Bresch.  The cost of an EpiPen in the United States is now as much as nine times higher than in other developed nations.  If this price hike were not malicious enough, Bresch's mother, Gayle Manchin, after becoming head of the National Association of State Boards of Education, encouraged states to require schools to purchase epinephrine auto-injectors, and the EpiPen, manufactured exclusively by Mylan, was nearly the only such product available.  In addition, while it could have been an honest mistake (although skepticism of such an explanation is perhaps warranted, given all that has been revealed already in this paragraph), Bresch did not give an accurate reckoning of profits to Congress during a recent House committee hearing.  And the most repulsive thing about all of this?  Anaphylaxis is deadly, the cost of manufacturing an EpiPen is rather small, and no justification for the price hike exists (unless, like Ayn Rand, you believe that greed is good, selfishness is a virtue, and altruism is a vice, and if you do, then may you swiftly reap what you sow).

Speaking of corporations which should have learned from the past, Wells Fargo should have remembered 2008, when, as a result of the 1999 repeal of the Glass-Steagall Act and banking "self-regulation" inspired by Alan Greenspan, Lehman Brothers filed for bankruptcy and was subsequently liquidated, the Federal government had to take over Fannie Mae and Freddie Mac and bail out AIG, which it also took over, and the Dow fell more than 700 points in a single day.  These banking corporations had seen accounting scandals, high risk lending and investment in the bubble economy of the housing market, negligence, and malfeasance including "cooking the books."  But even these banking corporations should have known history well enough to know better, for bubble economies and deregulation were among the causes of the Great Depression.  But again, that old lie, "Profit is success and success is life!" was whispered around inside the heads of the executives, and they hoped to avoid being caught.  No concern for those who were exploited has been in evidence, lower level employees have been fired, and the executives believe that they will be able to enjoy their ill-gotten gains and escape any meaningful punishment.  Indeed, so far, the only punishment for Wells Fargo's crimes has been a record-breaking fine which, however, was paltry in light of their profits, and their CEO, John Stumpf, being yelled at by US Senator Elizabeth Warner (perhaps trying to recoup some of the credibility she lost by endorsing corrupt corporatist pimpette Hillary Clinton) and verbally chastised by Senator Robert Menendez, and Wells Fargo has, as might be expected, admitted no wrongdoing.  I am not the only one to point out that Wells Fargo and Mylan should have known something was wrong;  Walter Isaacson, CEO of the Aspen Institute, said something similar on the 19th, in reference to more recent history.  Seth Meyers also alluded to the banking crisis of 2008 in reference to Wells Fargo's actions.  Jimmy Dore pointed out that this has been going on at Wells Fargo since 2011, a mere three years after the events of 2008, and that Wells Fargo stock initially went up following the revelation of the cheating (although it has dropped some since then):




Although Stumpf did accept responsibility and claims to be "deeply sorry" for the actions of Wells Fargo, he has not resigned, has not been fired, has not, in fact, been punished in any way.  Indeed, Carrie Tolstedt, head of the division responsible for overseeing the sector of Wells Fargo where the fake accounts were created, retired in July, with approximately $96.6 million in stock, stock options, and equity awards.  In 2015, Stumpf himself received $4 million in awards, on top of his salary, from Wells Fargo, in addition to base salary and other compensation, and in 2014, his salary was $2.8 million, on top of which he also received a $4 million cash bonus, and shares valued at $12.5 million, for a total of $19.3 million in "compensation" for the year.  Wells Fargo executives will retain their bonuses in spite of the scandal, and were Stumpf to retire, step down, or be fired, he would receive $123.6 million.  In spite of Stumpf's repeated insistence that the culture of Wells Fargo was not to blame for these criminal actions, not everyone agrees.  And to make matters worse, it turns out that Wells Fargo executive salaries were subsidized by US taxpayers.  Pissed off yet?  You should be.  Just make sure you're pissed off at the right people, and don't fall for their attempts to blame the little guy who has only crumbs:


video

In light of these abuses, Violation Tracker, the corporate crime and misconduct searchable database maintained by the Corporate Research Project of Good Jobs first, has been expanded and now highlights banking, consumer protection, false claims, environmental, health, safety, price-fixing and bribery cases initiated by 30 federal regulatory agencies and the Justice Department since 2010.  You can access Violation Tracker here.

But wait, there's more! ... although, at this point, I'm not sure we can take much more.  But yea, verily, there have been still more "enterprise incidents" in the recent news, not least of which is the blatant destruction of ancient sacred sites by the interests behind the Dakota Access Pipeline (hereafter called the DAPL), and the intransigent insistence on building the thing, crossing the Missouri River twice and going through a sacred tribal burial ground of the Standing Rock Sioux tribe, despite massive public opposition, outcry, and protests.  The Department of Homeland Security (as if to cement its reputation as a government gaggle of fascist bully-boys intent on imposing the will of the corporate oligarchy on the people whether we want it or not) has been involved, cutting the water supply of the Sioux and others protesting (mostly other Native Americans, as well as environmentalists, anti-statists, anti-corporatists, and progressives), private security firms have used pepper spray on protesters and allowed their dogs to attack the protesters, and a sheriff's department has issued arrest warrants for Amy Goodman, a journalist who was simply covering the protests, as well as for Green Party presidential nominee Doctor Jill Stein for "vandalizing" the blade of a bulldozer (the spray paint she used on the blade would of course be worn away in the ordinary course of use of the 'dozer, so the charge of "vandalism" stretches the credibility of the sheriff's department) and "trespassing."






Furthermore, in defiance of the judicial process then in play, the corporate interests behind the DAPL had a two-mile, 150-foot wide path bulldozed through the sacred burial ground on Labor Day Weekend, land which was being contested in Federal Court when the path was bulldozed through it, another in a long history of injustices against Native Americans.  On the Tuesday following the long weekend, 6 September 2016, a Federal Judge declined to order a halt to construction, instead requesting that Dakota Access LLC halt construction on only a small area in contention, pending a separate ruling to be issued later in the week.  The company agreed to the request.  This same Federal Judge, James Boasberg, on that Friday, the 9th, denied the Standing Rock Sioux tribe's request for an injunction against the DAPL, but then, the U.S. Department of the Interior, Department of Justice, and Department of the Army, issued this joint statement, which temporarily halted work on the DAPL on Corps land bordering or under Lake Oahe.  Also on the 6th, Democracy Now! reported on a new investigation which revealed more than two dozen major banks and financial institutions helping to fund the DAPL, among which are Bank of America Corporation, HSBC Holdings plc (held by the Hongkong and Shanghai Banking Corporation, Ltd.), UBS AG (originally Union Bank of Switzerland), the Goldman Sachs Group, Wells Fargo & Co, and JPMorgan Chase & Co., as seen here:




Not only because of the  desecration of the sacred site of the Standing Rock Sioux, but also because of the potential ecological damage, the DAPL is ill-advised, as Doctor Jill Stein has pointed out.  Between 2010 and the middle of 2015, leaks or ruptures in US pipelines killed 80 people, injured 389 more, cost $2.8 billion in damages, and released toxic chemicals into soil, waterways, and the atmosphere, in numerous states, as documented by the Center for Effective Government.  Toxic chemicals released into soil and waterways may seep down into the aquifers, poisoning untapped reserves of what was formerly pure water.  Truly, as Doctor Jill Stein has said, we do not need to be building more pipelines, but dismantling those already in existence, and moving to clean, sustainable, renewable energy.  The outcome of the concerns around the DAPL remains uncertain.  For the moment, construction in a limited area has been halted, pending a determination about whether or not the government will need to reconsider any of its previous decisions on the matter.  Meanwhile, already back in May at the time the DAPL protests were gaining ground, the Obama administration quietly approved permits for two pipelines in Texas also owned by Energy Transfer Partners, and signed an agreement with Mexico forming the "US-Mexico Energy Business Council."  Instead of approving these potential ecological disasters, we could be using our time, labor, and resources to fix some of the ecological damage which has been done.




And looming in the background are the "free trade" pacts which President Obama has favored, and which Hillary Clinton will push if elected to succeed Obama, agreements which will devastate national sovereignty by relaxing regulations on corporations even more and even allow multinational corporations to sue national governments for "lost profits" over any legislation which might include GMO labeling, country-of-origin labeling, protection of the environment, minimum wage, pro-labor policies, anti-trust laws, and so on.















And if you think this is only about the proposed Trans-Pacific Partnership (TPP) and the already-extant North American Free Trade Agreement (NAFTA), or even those and the Transatlantic Trade and Investment Partnership (TTIP), no;  there are others already prepared in case the TPP and TTIP fail:  the Comprehensive Economic & Trade Agreement (CETA) and the Trade in Services Agreement (TiSA).  It is not enough to be vigilant;  the corporate oligarchy has plans on top of plans on top of plans, and the money to hire thugs with pepper spray and attack dogs and bulldozers and more.  While we are focused on one abuse, they are already busily planning more.  When we have exhausted our bodies, minds, and financial resources fighting one abuse, they can simply hire more mercenaries and drones to enact their will while we recuperate and build back up our own finances which were expended in our previous resistance efforts.  Instead, we must focus our efforts, not on the symptoms, but on the root causes of these abuses;  we must change the system.  This cannot be done by voting for politicians who are part of that system;  we have to step out of line and elect those who have the interests of our nation and her states and people at heart.  We must end the two-party duopoly, a deception in which two seeming parties are in actuality but one, which is controlled by the same establishment of corporatist oligarchs who have steadily eroded our democratic republic for their own gain.  It's time.  Will you step out of line and vote for Doctor Jill Stein for President, and progressives down the ballot?  It's in our hands.  We can do it, if we stop being afraid.  Winning is impossible without the will to risk losing.











The title of the post comes from Star Trek (The Original Series), Season 3, episode 2;  episode 57 overall;  production code 59.


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