Utterances.net edited by Jalel Harchaoui.
 

17 December 2012

The nation must focus on joblessness; Big Business has a different priority
Why All The Panic: Large Corporations Put Emphasis On Deficit
by Jalel Harchaoui.
A brief look at why large corporations invest so much money into promoting fear with respect to the nation’s deficit.
Why All The Panic: Large Corporations Put Emphasis On Deficit

General Electric's Jeff Immelt, the job creator: more than half of GE jobs are abroad.

Within the context of a “State Budget” discussion (as opposed to “Federal Budget"), Illinois daily newspaper “The State Journal-Register” ran an article encapsulating quite well why large corporations are acutely adverse to budget deficits.

In the 23-Jan-11 issue, University of Illinois economics professor Dan McMillen explained: “The State of Illinois has $15 billion state budget deficit. Large corporations don’t like the uncertainty inherent in a large deficit.” That is exactly what we’ve been witnessing at a federal level with the whole deficit obsession in the corporate media. The ordinary population doesn’t view the Deficit as an urgent issue, nor should it. The anxiousness comes entirely from the corporate sector.

In the same article, the director of a government relations for an Illinois Chamber of Commerce said: “We have been in conversations with businesses from other states who were looking at coming here” and also with Illinois-based businesses wondering whether to leave the state. “Large corporations looked at our state’s budget deficit and said, ‘At some point in time, you (the State government) are going to have to fix it, and that means there is a risk you are going to be tempted to fix it on the backs of businesses,” not the population.

As a result of that “risk”, large corporations continued to threaten and pressure the State of Illinois so that it conducts an onslaught on its social-benefits programs for the poor, public sector (schools, public servants’ pensions, etc.), and spending in general (infrastructure, roads, no high-speed trains, etc.).

The above dynamic is precisely what we’ve been witnessing at a federal level (but without necessarily understanding it).

In recent years, large corporations received trillions in federal war contracts, subsidies, last-minute bailouts, and one-off tax breaks. That money is presently in those big-business pockets and it must stay in there. If those entities do not press for austerity measures against the ordinary population as soon as possible, then they will remain exposed to the risk of having to return some of that windfall money to American workers. That potential tax danger isn’t liked. It’s important for private corporations to lock the recent gifts in, by demanding increased austerity on non-corporate sectors of the population.

Hence the insistence with which the corporate-owned media have been hammering deficit fears into the general population lately. The little “Illinois 2011” story referenced above provides good explanation.

The phenomenon—why Big Business dislikes a budget deficit at a time when the nation really should focus on joblessness—is seldom discussed in respectable circles, hence the value of that local-paper article. (Lately, the public has been induced to believe that the deficit constitutes an urgent concern for the American population, not just the corporate sector.)

For institutional reasons, those abstract entities (the corporations) do not care about education, infrastructure, public servants, health or unemployment within the United States. They have already shipped most of America’s advanced industries out to North-East Asia over the last 40 years. The main reason for their attachment to Washington at this stage lies with the trillions’ worth of corporate entitlements from the American taxpayer. One of those corporate entitlements is violence and wars of aggression, one dimension in which the U.S. still reigns supreme.

Note: There are reasons other than the “lock-in risk” described above for the corporate sector to not tolerate a large deficit. One such potential reason is inflation. But as of right now, the U.S. economy doesn’t exhibit risks of inflation yet; it exhibits risks of deflation. The above “lock-in risk” is therefore worth bearing in mind if one wishes to understand why so CEOs have been passing their restlessness onto Washington, D.C.,—and onto the mass media.

~ Jalel Harchaoui.