Corporate Coup d’Etat of U.S. and Its Casualties, by Dr. Steven Nur Ahmed

Corporate Coup d'etat

The movement of capital in the form of manufacturing jobs and cash out of the United States to foreign countries, primarily to Asia, has lowered the quality of life for all blue collar workers and dimed the future prospects for college students in the United States. It is rapidly closing the door to economic opportunity for black people in particular.

New trade agreements such as NAFTA, CAFTA, and PNTR between at least 20 nations and the United States within the last 20 years have resulted in the loss of millions of jobs to foreign nations because U.S. blue collar workers cannot compete with workers from countries willing to work for .60 cents per hour.

Now, another trade agreement called the Trans Pacific Trade Agreement or TPP threatens to usher in not only the loss of even more blue collar jobs, but even more highly skilled white collar professional and engineering jobs as well by outsourcing to Asian nations.

Urban history in the 20th and 21st centuries is replete with patterns of economic destabilization. Let me give to you an example of what the relocation of blue collar jobs has done to black workers who were dependent upon manufacturing jobs in one particular city.

Corporate coup d'etat 2

Let’s look at the city of Oakland, California between 1950 to the present. It can serve as a microcosm of what is happening and will happen to United States workers in general and to black people in particular.

In the 1940s through the 1970s, Oakland was a highly concentrated industrial city. To give you an example I will name some companies which were situated in close proximity to one another between 81St, 98th, and 105th Avenues in Oakland in the 1960s. First, there was Peter Paul Almond Joy Candy Company, 2) Sunshine Biscuit Company, 3) Mother’s Cookies Company, 3) Pepsi Cola Company, 4) Laura Scuuders Potato Chip Company, 5) Gerber’s Baby Food Company, 6) Granny Goose Potato Chip Company, 7) Nabisco Company, 8) General Mills Company, and 9) General Motors Company. These companies were central to the very robust Oakland economy. They provided not only jobs and stabilized families but they also provided a strong tax base for the city.

Each of those companies ran 3 shifts or 24 hour daily work shifts except Saturdays and Sundays. They employed thousands of unionized workers. The money from those companies not only flowed in the form of family income but also filtered down to Oakland public schools and recreational facilities for children. Those were just a handful of companies in the city of Oakland at that time. There were hundreds more like them each of which added value to a dynamic city economy. However, company location policies began to change in the 1970s.

Each of those companies slowly pulled out of Oakland over a span of 20 years. The industrial companies pulled out after over 100,000 white people fled Oakland between 1950 and 1960 in response to the influx of Black people. White flight cost the city of Oakland its middle and upper middle class tax base.

The military bases also slowly pulled out of Oakland after the end of the Vietnam War. The closure of military bases also cost the city of Oakland millions of dollars in annual revenue. Black people had been attracted to those jobs and had migrated from the southern States to Oakland seeking to economically benefit from factory and civilian military jobs in the city of Oakland. But in scarcely 25 years or one generation the original intent of black people and the economic hope which motivated them faded before their very eyes.

During that time period and up to 1975, the city of Oakland reached its peak economically. But the pattern then was as clear as it is today. The owners of private industry then did not want to give jobs to, work with, nor be around black people any less than today.

The economic effect on black people and Latinos because of the loss of such a high concentration of blue collar and civilian military jobs is correlated with the disintegration of public quality of life because of a: 1.  shrinking tax base and the looting of public school budgets by some public school administrators in the city during and after the exodus of capital, 2.) an increase in black and Latino incarceration rates due to get tough on crime policies in the 1970s and the proliferation of narcotics, methamphetamine, and cocaine, 3.) an increase in AFDC and Food Stamp dependence which now stands at over 47 million Americans, 4.) The implosion of middle class shopping centers which is evidence of shrinking middle class incomes. That is best exemplified by the Eastmont Mall in East Oakland which was opened in 1970, 5.) a phenomenal increase in single parent female headed household far above that of two parent households after 1970, and 6.) a disproportionate rise in the black abortion rate after 1975.

Take what I have described and apply it to your city. Whether you are in Compton, Detroit, Baltimore, or Pittsburg you will see the same pattern; a loss of manufacturing jobs and a steep decline in the quality of life for most people and in particular for black people living there. Black people are always the first to lose economic footing.

Now we are confronted with a new economic challenge. It is called TPP or the Tran Pacific Partnership Trade Agreement. Its predecessor, NAFTA, became law in 1994. NAFTA has resulted in the loss of millions of jobs across the United States. It was signed into law by then democratic president Clinton. TPP will cost Americans more jobs lost to Asian nations and a loss of Federal legal jurisdiction over multinational corporations. Under TPP, foriegn corporations would be given the status of ‘legal citizen’ of the United States and thus have the right to sue U.S. citizens and governments if a law interfers with their profits. Another democratic president, Obama, wants to sign TPP into law. The TPP agreement has a covert purpose; it is designed to serve a particular purpose.

The TPP agreement like NAFTA will only increase the power and wealth of multinational corporations over us and to further diminish the leverage of unionized labor. It will also reduce our individual and collective political leverage as voters. But even more is in store for us if TPP is signed into law.

As Asian purchasing and consumption power increases, U.S. citizens will have correspondingly less economic and political leverage against the global multi-corporate power structure. That is so because over time multi-corporate revenue streams will become less and less dependent upon U.S. consumers. That is what “race to the bottom” means.

For example, in Detroit, public contracts were given to companies connected with corrupt politicians. As a consequence water costs increased in the city of Detroit after the city signed contracts with companies giving them the power to manipulate the price for water. That in turn has lead to water cutoffs to the poor in the city of Detroit.

Another example is California. In California, under Pete Wilson and Gray Davis, public energy controls were modified under the Electric Utility Industry Restructuring Act, 1996.  In 2000, Companies like Enron were then able to increase the price for energy by manipulating the price of energy thereby causing energy bills to triple overnight. The shortage of energy caused rolling energy black outs throughout the State to begin in 2001. . In both cases, elderly low income people on fixed incomes and low income persons suffered the most.

Running parallel to the TPP effort is the slow but steady privatization of local, state, and federal government. Right now it is best exemplified by the privatization of public schools and public utilities. For example, students attending public universities are more dependent on commercial bank loans because of Government cutbacks in grants such as the Pell Grant. Such cuts have resulted in a national student loan debt of over 1 trillion dollars. It is not that private corporations want to own the infrastructure of state universities. Rather, they prefer to allow taxpayers to pay the costs for maintaining university infrastructures; what they want to own, by loan contracts, are the students.

Here is why. Corporate and financial globalization has made those same institutions less dependent upon educated American professionals as is the case with blue collar and professional workers because they have a global pool of educated professionals to draw from and at a cheaper cost to them.

American college graduates must now compete with an international population for professional jobs in the United States. Thus, there is no longer a national and private sector need for large numbers of American students to fill job positions, and so University systems need not cater to students who are financially unable to pay for their education. All of these efforts turn on a single unstated premise: the private sector can do it more efficiently and cheaper than government.

The argument by the proponents of that premise is that since government has a 17 trillion dollar deficit, privatization will help reduce costs for running government. But that argument is not necessarily true. Take the postal service for example. The costs for postal services have been increasing under public control and it will increase under private control at an even faster rate. Furthermore, government will continue to run on a deficit for two basic reasons. First, a federal deficit will remain because the national tax revenue to the federal government will decrease as income levels decrease and secondly, because public debt is the only way to justify an increase in the national debt ceiling which in turn triggers federal loans from the Federal Reserve Bank which generates profits for private banks.

So, keep an eye on what happens to the U.S. Postal Service; it is the canary in the coal mine. Thousands of black people hold operative jobs for the U.S. Post Office. If the U.S. Postal Service is privatized, then thousands of black Americans will lose their operative jobs due to robotic technology. Operative jobs are one of the leading fields of employment for black people. People and their families dependent on those kinds of jobs will sink into a state of perpetual poverty. Black life will become even more sub-standard than it is now.

Statistically for instance, 72% of black people with college degrees are employed by a form of government and generally about 21% of all black workers are employed in local, state, and federal governments. If governmental departments are contracted out to private companies at the local, state, and federal levels, then black people will be the major economic losers.

Black Americans and their families will sink into perpetual poverty. Black life will become even more sub-standard than it is now. On the other hand, white youth with college degrees will get hired in the private sector. That is how corporate government plans to co-opt lower class but college educated white people with the aim to neutralize any movement toward unity of poor whites and blacks.

The closure of military bases in the 1980s and 1990s is yet another example of how the exodus of capital, in this case government capital, adversely affected black people. Such base closures ought to be a red flag on the field for all of us to see. In the San Francisco-Oakland Bay Area, thousands of black people and their families were the major losers when the Army and Navy bases closed.  That is because the Federal Government was the single largest employer of black people in the San Francisco-Oakland bay area. Many of those military installations were moved to other states so that jobs could be given to college educated white people after they were taken from under educated black workers.

Now, at this moment in our history, we should know that it doesn’t matter whether the president of the United States is Democrat or Republican; whether the president is white, black, male or female. Race and political party do not matter at the highest offices of government because the government which rules is multi-corporate and fascist in nature; it is not a democratic republic.