Corporate Malfeasance – And Why It Corrupts
malfeasance: n. intentionally doing something either legally or morally wrong which one had no right to do. It always involves dishonesty, illegality, or knowingly exceeding authority for improper reasons. Malfeasance – Synonyms: MISCONDUCT, MISBEHAVIOR, MISDOING, WRONGDOING
For several decades we have empowered politicians and corporate leaders to create a system that is scandalously wasteful, overtly reckless and – we now know – ultimately self-destructive. It is hard for us to admit that we have been hoodwinked. But that is exactly the case. We have been hoodwinked by both the modern-day robber barons and by the very governmental bodies that are charged with preventing such malfeasance.
Corporate malfeasance is thriving, and we continue to see on a daily basis corporate executives taking advantage of workers and consumers alike. As I’ve written in my books, more than any other single factor, today’s tycoons exemplify the mutant form of capitalism we have misguidedly embraced and been infected with: the exploitation of the many by the few. We accept as “natural” that the CEO’s of Fortune 500 companies become as rich as the Gilded Age tycoons, simply because they operate under the mantle of publicly traded companies that are supposedly scrutinized by the Securities and Exchange Commission (SEC).
We witnessed massive bailouts at the end of the Bush presidency and at the start of the Obama presidency and yet we accept the fact that roughly half the profits made by investment banks were distributed to the senior partners – not to the employees or the stockholders.
The Wall Street Journal cited in February that banks could double payouts to shareholders in 2012 alone. According to the story, Credit Suisse analysts expect payouts to reach an “average of 47% of earnings in 2012, up from 23% last year.”
Ironically the banks positioned to receive these double-digit earnings include some of those we bailed out with our tax dollars in the previous year, such as Goldman-Sachs, JP Morgan and US Bancorp.
While this all makes for a potentially stronger rally on Wall Street, it does nothing to help citizens struggling on a daily basis to maintain their homes, their health insurance and their jobs.
One of the earliest robber barons noted in my book was J.P. Morgan. He set a course years ago that has been followed by many of today’s billionaires: mergers, acquisitions and consolidations and deals that heap riches on those who mold them but wreak havoc on competitors, workers and local economies. These transactions empower a few individuals with control of resources and markets; the CEOs who end up at the top of the conglomerates are in positions to exert excessive influence over government officials, the press and buying trends. Because such deals are made on paper – in boardrooms, law offices and at investment banks – they seldom produce tangible goods or services or create new jobs. These paper transactions have played an ever-increasing role in the U.S. economy in recent decades and are a major contributor to the failing of our economy.
The March 26, 2012, Forbes Billionaires issue states, “This year, we’ve counted 1,226 billionaires, an all-time high.” Those 1,226 billionaires are worth a record $4.6 trillion. The average wealth of a Forbes billionaire is $3.7 billion. Yet, in our country, the U.S. billionaires call for lower taxes on corporations while the middle class continues to bear the heaviest tax burden when they can least afford it. Those with money and power go to great lengths to cheat our system.
Our government continues to stay in step with the corporations whose names are often synonymous with predatory capitalism, while nation’s citizens bear the weight of the continued malfeasance. This month President Obama met with his Business Roundtable, a group of business leaders, to talk about job creation and the economy. Chaired by Boeing President and CEO James McNerney, the Business Roundtable (BRT) is made up of the top leaders of several of the wealthiest U.S. companies including American Express Company, GE, Goldman Sachs Group, Intel, JPMorgan Chase & Co. and Wal-Mart Stores. President Obama met with them on the eve of the release of their report titled, “Taking Action for America”. (See full report insight here).
The report calls for streamlining the federal regulatory process and withdrawal or modification of each of eight proposed or pending regulations that BRT CEOs have termed as particularly costly and burdensome to business. Additionally, the BRT CEOs have also flagged dozens of additional regulations, listed on BRT’s website that they claim could add costs and slow business expansion.
What we must ask as citizens is how and what would fewer regulations on businesses do for us as individuals and for our nation as a whole?
It is essential that we demand change. We must continue to support the Occupy movement ideals, and to call for more transparency in both the corporate and government sectors. It is time to take back our rights and put our money where our hearts are by supporting corporations that maintain corporate social responsibility at all levels. It is important to support the corporations that put people and the environment at the top of their priority lists.
The term malfeasance is synonymous with misconduct, misbehavior, misdoing and wrongdoing. Corporations and legislators who continue on the path of malfeasance must be brought to justice. (See ten examples of corporate malfeasance)
You and I can make a difference by supporting institutions that call for corporate restructuring and accountability. I urge you to take all this seriously, and become more aware of the roles corporations play in our destinies and those of our children. Please support the initiatives of organizations like Corporate Accountability International and The Center for Corporate Policy.
Cross-posted from johnperkins.org
As Chief Economist at a major international consulting firm, John Perkins advised the World Bank, United Nations, IMF, U.S. Treasury Department, Fortune 500 corporations, and countries in Africa, Asia, Latin America, and the Middle East. He is the author of the New York Times bestseller, "Confessions of an Economic Hit Man" and "Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded -- and What We Need to Do to Remake Them."