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Business Criminality

Iron Curtain around Corporate America

by NORMAN POLLACK

I refer to General Motors, its ignition (death) switch, and company knowledge, over considerable time, that certain of its vehicles, because of the defect, were homicidal traps—and in absence of notification to their owners, as well as failure to rectify the lethal condition, we have with this Iconic Firm a case of premeditated murder. Too strong an indictment? GM is not only complicit in murder, its actions are causative in carrying out the heinous act. This is nothing new in what amounts to a solipsistic capitalism always protective of its own interests. The System, its operations, financing, managerial control, and its relations to labor, all are predicated on a worshipful populace to look the other way, when its drive for profits have been gained even at the expense (some might say, particularly at the expense—as in the war-driven “defense” industries) of human lives. If profits are the bottom line of corporate organization, false consciousness is the ideational edifice resting on capitalist foundations.

GM is no stranger to the construction of a reverential attitude, public and government alike worshipping at its feet. Have no fear, its iconic status emblematic of Patriotic America will emerge unblemished, and the ignition-death-switch itself quickly forgotten, as new models are rolled out in showrooms and at the international car shows. Token compensation to the victims’ families to silence their grievances, and no doubt charged up to business expenses, will be widely publicized as the generosity of a compassionate corporatism—the analogue to the deplored while persisted in “collateral damage” of America’s latest gifts to the world, drone assassination and humanitarian interventionism.

There is a logic operating here, inseparable societal mechanisms of repression, war and corporatism in an interrelated structure, each servicing and dependent on the other. If one can kill with impunity at home, why not also abroad? Conversely, if abroad (where military power is meant to ensure impunity), via drones, regime change, embargoes, why not then at home? The logic appears to be impeccable, so much so as to be acted upon on a daily basis, as when intervention has been matched with attrition to the social safety net, or perhaps better yet, massive surveillance to elicit consent for a permanent war posture matched with the presumed imperatives of the National Security State, including a suppression of civil liberties and the denial of government transparency. I have not forgotten General Motors. What it had gotten away with exemplified the society and culture of Militarized Capitalism, a milieu allowing for honoring the strong as they run roughshod over all comers.

Patriotism knows no greater affection and loyalty.

GM, large as it is, is still a microcosm of the whole. The whole represents in America a corporatist polity, business as usual, business front and center, founded on hierarchical class arrangements that have been coded to justify and give praise to massive capital accumulation at the top. This becomes a great-chain-of-capitalist-being, within which, in the form of structural-ideological trickle-down, wealth distribution is progressively widened to ensure a wide gulf between rich and poor, the latter systemically tilted in the direction of an underclass, and a labor movement, somewhere above the bottom rungs, dispirited, narcotized into the peaceful slumber of acquiescence. We no longer feel the reverberation of the Flint Sit-Down Strike, nor the courage of UE (United Electrical) in standing up to McCarthyism. Radicals must come to terms with, as must labor itself, the diminution of militancy, now at a time when resistance to the antilabor climate, because of its diffuseness and a Democratic president, is perhaps at an all-time low.

One would not be surprised if labor, and specifically, the UAW, came to GM’s defense because it means jobs. One does not blame working people when they are down, but the symbiotic relationship between corporation and union is abandonment of radicalism, and with it, as here, the green light for GM to kill-for-profit. The ignition-switch issue provides an opening crack in the revelation of corporate nihilism– although the operations of the System on a daily basis should have made that evident, from banking and hedge funds to discriminatory treatment of labor organizations. Yet it will most probably go for naught as business criminality is papered over in the spirit of market fundamentalism commixed with devotion to the nation, our noble warriors, etc.—whatever it takes to silence dissent…until dissent itself ceases to exist.

I am tempted to say that GM had kept silent about the ignition defect for over a decade in order to test the waters of how far its arrogance could go, a brazen staring down over whatever was left of American democratic principles. Obama, similarly, in his use of hit lists to assassinate Enemies of the State, has been testing the waters over how much illegality and vileness the American public would tolerate. In both cases, the mindset appears to have achieved success, therefore promising a further free hand in advancing questionable practices. When GM survives, as it will, the present skirmish of death-for-sale, its message to the American people is, knuckle under to the superior power of the corporation. Yours is not to question, just keep buying our goods. It is your patriotic duty, and besides, the psychodynamics of absolute power is working for us: The corporate context is one of authoritarianism, which provides cues to submission, willing submission bathed in the starlight of false consciousness.

Business depends on the flaunting of its strength and oppressiveness as demonstrating its status, not above the law, but singularly entwined with the law itself. Targeted assassination does the same thing for the expansion of Executive Power. And who knows, when drones will buzz constantly overhead, ready to pounce!

The indictment of GM for premeditated murder, given its failures of disclosure and ceasing manufacture of the defective part, will never happen. America closes ranks around its Dark Side, whether as war crimes, the treatment of minorities, contempt for civil liberties, or global aggressiveness, but especially, any criticism of its business system. Culture, institutions, values, all converge on capitalism, the apogee of perfection and social decency. Recall the aphorism, you can’t tell the players without a program, or perhaps as well, You can’t tell the program without the players, so inextricably bound together are they. The program is the militarization-financialization of advanced capitalism; the players, in this case, are GM, but also, a more-or-less cohesive ruling group made up of monolithic corporate units, capable of exerting influence in shaping a unified public policy which is based on domestic social control and foreign political-ideological-market expansion.

Monopoly capital fuses political economy and social order, the regimentation of the populace through the inculcation of false consciousness in lockstep with growing economic concentration. Hereboth the military and intelligence communities serve as willing assassins of conscience contributing their special skills in guarding the Property Right.

GM is unintelligible without CONTEXT, and, confining the record to a single week (my way of pointing to the quotidian reality of an inceptive fascism, the heart and soul of American social structure embodied in Exceptionalism), I refer to Paul Krugman’s article, “Why Economics Failed,” (May 1), for the protective setting (ah, microeconomics) which allows if not encourages GM and its behemoth-consorts to flourish free from the restraints of democratic governance, becoming instead dependent on war and expansion for its steady growth.

Krugman’s concern, “inadequate demand,” is code for taking ameliorative steps, which do not change the internal composition (i.e., class, wealth, power) of capitalism, but forestall its volatility and proneness to stagnation—not, however, as Keynes would have, with ample provision for public spending, but capitalism, first, last, and always. Precisely the intellectual (?) climate for a GM-style close-to-the-chest maneuver to defraud the government (its decade-long knowledge that it was building killer-machines, as meanwhile, in bankruptcy, it took billions from the public trough following the 2008 financial debacle without revealing its dark-kept secret—as in Watergate, the cover-up crowds out the more significant crime), now fighting tooth-and-nail to get immunity from class-action suits and essentially claiming its present existence has nothing to do with its past behavior.

Krugman’s best shot in explaining the financial crisis, anticepticizing the business system so that no trace of the corporation, banking firm, or financial-services industry appears, therefore an amoral backdrop in which things just happen, is mechanistic to a fault. He writes: “We were suffering from inadequate demand. The financial crisis and the housing bust created an environment in which everyone was trying to spend less, but my spending is your income and your spending is my income, so when everyone tries to cut spending at the same time the result is the overall decline in incomes and a depressed economy.” This may seem remote from the topic, but rather than critical analysis, when the economic landscape is painted in glorious watercolors, the recipients of the academic largesse (seconded by a federal and state regulatory system virtually wholly in the pocket of the enterprises to be regulated), fear of detection for criminal behavior diminishes accordingly. And with God on its side, GM can do no wrong—a bitter thing to say, but one more item in the ideological pot fending off punishment. Trickle-down economics which originates at a higher point in the celestial heavens.

The context, then, when it is taken together, including the moral swamp of assassination, intervention, paramilitary operations, deregulation, and the punitive attitude toward civil liberties, all contribute to the individual’s contempt for legal processes. This is also matched by business’s contempt, so that a cloud of cynicism hangs over the entire society for that which stands behind the law, i.e., honesty, fair dealing, truthfulness, and compassion for one’s fellows. Such contempt is one of negating responsibility and accountability for wrongdoing, capitalism bred-in-the-bone property-right selfishness, or better yet, fanaticism. From Hilary Stout and Bill Vlasic’s article in The Times, “Hoping to Fend Off Suits, G.M. Is to Return to Bankruptcy Court,” (May 2), we learn about the legal moves to evade that responsibility and accountability, chiefly, tricks for getting out from under through selective payment to the plaintiffs and, of course, a public relations campaign to announce the New GM, having nothing to do with the Old.

The tactic of returning to court: “On the surface, G.M. is merely asking the judge [Robert Gerber, Federal Bankruptcy Court of the Southern District of New York] to enforce a provision of its July 10, 2009, bankruptcy reorganization that insulated the ‘new’ company from lawsuits stemming from accidents that occurred before that date.” “New” here implies immaculate conception, freedom from prosecution for past offenses (or crimes—the faulty ignition switch—causing far more deaths than GM admitted to, 13, by its account, limited only to front-end collisions wherein safety devices became inoperable because the defective switch shut them down), and the hope in seeking a favorable court ruling was to “shut down a rising tide of class-action lawsuits stemming from its recall of 2.6 million cars because of a dangerously defective ignition switch that it now links to 13 deaths.” (It appears that the people who keep track of GM deaths are the same ones who keep track of Obama’s drone deaths, or at least trained in the same school of minimization and stonewalling public inquiry and knowledge.)

The reporters point out that by in effect reopening the bankruptcy proceedings, GM may have made things worse for itself, because then the question of FRAUD can be raised: “Objections have poured into the court from plaintiffs in cases around the country, alleging that the company committed fraud…five years ago by not disclosing the potential liabilities from the faulty switch, a problem it now admits was known in parts of the company for more than a decade before the recall.” As for stonewalling, inquiries still have not answered the question, “how high up in the company did the knowledge of the switch defect go? G.M. has largely declined to make employees available for questioning and has continually cited its own internal investigation.” GM lawyers “did not return phone calls.” One shrewd lawyer, Richard Levin, head of the restructuring practice at Cravath, Swaine, & Moore, saw wider implications for business in the effort to enforce the bankruptcy order: “This may be an important case for teaching us how bankruptcy sales can relieve a company of its past mistakes.” GM is in the vanguard for gaining judicial approval for shielding corporations from damages for their past misdeeds.

Plaintiffs’ lawyers are not sitting back, Edward Weisfelner stating: “We are going to ask the new G.M. for some admissions and stipulated facts [presumably, by my understanding, what GM knew and when about the defective switch].” Thus, he continues: “The basic issues are that the old G.M. knew about this defect, could reasonably ascertain who the affected consumers were, should have and could have given direct notice.” Clearly he is not persuaded by the old-new folderol, and adds: “These people were deprived of their due process.” GM for its part stands ready, its strategy being “to take some of the emotion out of the bankruptcy court battle by moving for the dismissal only of the economic loss cases—and not any personal injury or wrongful death lawsuits tied to the ignition defect.” Two points: the reporters note that, although a good public-relations gambit, yet “getting rid of the economic cases is probably more valuable to the company since the price tag for dozens of class actions is likely to be higher.” Not to mention, which the reporters pass over, that GM can argue till the cows come home the number of personal injuries and wrongful deaths and their circumstances. And Kenneth Feinberg, the victims-compensation-fund expert has been called in by GM, hardly a disinterested party.

Finally, Stout and Danielle Ivory’s follow-up account, “G.M. Talks to Families With Claims Over Defects,” (May 2), deals with the still preliminary phase, Feinberg meeting with the lawyer “who represents more than 300 clients with wrongful death or personal injury claims, a universe far larger than the 13 deaths and 32 crashes that G.M. has linked to the problem.” Feinberg: “The sole purpose was for me to listen.” GM had a two-pronged strategy (beyond listening): “compensate accident victims and their families—even as it moves to aggressively shut down other types of cases, including dozens of class-action lawsuits seeking compensation for economic losses like the diminished value of the recalled vehicles.”

From GM’s standpoint, the goal was “to make the cases go away.” A subtle tactic here is, although coming into court for liability protection, it wants out-of-court settlements: “G.M. officials, including Mary T. Barra, the chief executive, have indicated that they expect Mr. Feinberg to complete his business by June. The idea is to come up with a formula for compensating victims, and criteria for determining who is eligible, outside the courts. The company has not given any indication of how much money it may set aside to compensate victims.” These last words make for a fitting conclusion, the Iron Curtain around US business holding firm.

My New York Times Comments, first, on Krugman’s article, same date, second, Stout and Vlasic, same date, and third, Stout and Ivory, May 3, follow:

I
“…my spending is your income and your spending is my income,” sounds like a childish merry-go-round tune. No word anywhere, about the military (and the impact of spending on war, intervention, regime change, paramilitary operations, etc., for the social safety net), no word on widening class-differential of wealth, income, and power, for creating widespread UNDERCONSUMPTION (Prof. K. prefers the more salubrious, “inadequate demand”), and instead, the tightly bound-up economic universe of consumerism, as when Ike a half-century ago rode the wave of, “you auto buy now.”

Macroeconomics is the tool of advanced capitalism; profits trump human welfare. Economists have long ago abandoned dispassionate analysis to serve as the Swiss Guard of Vested Interests (Veblen). Spend, spend, but not on a single-payer health system, not on tuition-free public education, not on crumbling infrastructure via New Deal, rather than private-contractor, auspices. Everything here represents a claustrophobic capitalism, the utter intellectual bankruptcy of present-day economics as a discipline.

Prof. K., the emperor (here USG, Treasury, the academic world) wears no clothes. I refer the lot, particularly academics, to Robert A. Brady’s (Columbia economist in a franker time), Business as a System of Power. No one expects economists on the barricades, but should not GM’s death-ignition system give pause for thought?

II
Bankruptcy court should not be a refuge for scoundrels. Given the conservatism of the judiciary when it comes to penalizing American business for wrongful conduct, esp. should the case go to the Supreme Court, odds are that GM will enjoy govt. protection and get off scot-free. I.e., no justice for the victims, as usual.

This sleight of hand, the new GM, not the old, allows it to escape the moral consequences of its history–something that should never be tolerated if one believes in the rule of law and principle of ACCOUNTABILITY. Weisfelner’s remark, “These people were deprived of their due process,” must be amended to say, they were deprived of their lives. GM knowingly allowed the death-switch to be operable for years. In blunt terms, the corp. was complicit in commercial murder. All the while, it received the largess of the American public to stay afloat.

Too big to fail? Advanced welfare capitalism, from banks to autos, reveals its inner corruption, welfare for monopolism while welfare for the people is savaged (as in a diminishing social safety net)–Democrats and Republicans, labor and capital, alike joining in to erect an Iron Curtain around Corporate America.

I hope the plaintiffs and their attorneys hang tough, even if, and esp. if, this does irrevocable damage to GM’s reputation and translation into weakened sales. The UAW places jobs above corporate responsibility, stripping unionism of any pretense of societal concern. Ditto GM execs, top to bottom.

III
That Judge Gerber allowed the liability shield in GM’s bankruptcy reorganization, does not auger well for the achievement of justice for the victims. Moreover, how much is Feinberg a neutral expert when in fact he was summoned by GM? Undoubtedly, like in Ibsen’s “Enemy of the People,” all parties–except those families of the dead and injured–will rally to GM’s defense, as if it were wrapped in red-white-blue bunting. In America, major corporations are next to God, and to be worshipped with perhaps equal reverence.

Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at pollackn@msu.edu.