The Differences between Corporate Greed and Government Greed

As the country continues to suffer from joblessness and excessive federal deficit spending, the Occupy Wall Street protesters continue to aggressively chant that the lack of job growth and national debt are due to a simple cause: corporate greed.  Corporations are wealthy and should be paying higher taxes, they maintain.  And corporations are responsible for the lack of jobs; they are allegedly sitting on trillions of dollars of cash, and their only goal in life is to take more money from hardworking Americans.

This "corporate greed" rhetoric must be put into perspective.  The American people are not told that there are two kinds of social domination: 1) class domination, due to the fact that some people are wealthier than others, and 2) political domination, due to the fact that some people gain political office and government jobs1.  These are the political elites.  Media and the Democrats tell us only about the first "class warfare" kind of domination, and never the second kind -- i.e., exploitation by those in public office2.

There are two recent examples of exploitation of working people by political elites.  Both come from states that have been dominated by Democrats for decades: California and Illinois.  It is important to keep in mind that the longer a political party remains in control, the more time its political elites have to form strategies and partnerships in corruption.  The simple fact is that while it is easy to state that "both parties are the same," the great majority of big cities in the Midwest and Northeast have been controlled by Democrats since FDR.  And since 85 percent of people live in cities, Democrats have controlled most of the country's population for the past eighty years.  These facts are not widely known, simply because then Democrats would have to be held accountable for their mismanagement of budgets (deficits) and corruption.  All of the states suffering huge deficits are run by Democrats.  These deficits create future debt for the 99 percent who work for a living.

Example number one occurred in Bell, California, where the city manager raised his salary to $787,637, and the police chief $457,000.  And the small city of Bell has 37,000 people.  The median income in Bell is $40,556, one of the lowest in southern California.  This means that the city manager made nineteen times as much as the average taxpayer, and the police chief ten times as much.  Fortunately, the Bell, CA officials' salaries were exposed by the Los Angeles Times (not by the government), and they are now being prosecuted by the CA attorney general for fraud and embezzlement.  At what point do all property tax increases become fraud and embezzlement?

Progressive critics may say that these large salaries don't compare to the salaries of large corporate CEOs, who may earn 400 times what their employees earn.  But there is a huge and significant different difference between the public official and the corporate CEO: the CEO cannot force anyone to pay his salary, while public officials do just that.  And unlike CEOs, public union members get weekly paychecks for life, not just for a few years or the length of a contract, as defense contractors do.  The greatest power a governmental body has is to seize wealth is through taxes -- namely, property and income taxes.  Anyone who owns property or rents is paying property taxes.  And if these taxes are not paid, the government has the right (which it delegated to itself) to seize your house and sell it for back taxes.  In counties controlled by Democrats, it is extremely rare to ever see property taxes lowered.

So if a corporate executive mismanages his corporation, it will go bankrupt.  He can take money out, but then the corporation must pay for it.  A corporate CEO can give himself raises, but he cannot force other people to buy products to pay for it.  He cannot send a bill to working-class people to pay his salary -- but city managers can, and do.  Look at your property tax bill -- there is no private corporation listed on there.  But there are no market constraints on what public officials earn.  In other words, your money and property belong to them.  If you want to find out, stop paying their salaries and pensions (property taxes).

The second example of how political elites enrich themselves comes from Illinois, where public schoolteachers and administrators receive lavish pensions.  They are required by law to pay 9.4% of their weekly paycheck into these plans.  But a study by the Illinois Policy Institute found that in almost two-thirds of the school districts of Illinois, the teachers do not pay 9.4%.  Some or all of it is paid by the districts; the amounts are put on the property tax bill.  No doubt, many working Americans would love to have someone make their 401K contributions for them, but unlike the government, they cannot force anyone to pay.  And unlike the Bell, CA corruption case, which is being prosecuted, the public-sector unions continue their exploitation of working-class people via lifetime pension plans measured by the millions of dollars per person.

Not surprisingly, the teacher unions are the largest campaign contributors to Democrats, both on the state and national levels3.

When the BGA (Illinois Better Government Association) sought to investigate how much money community college administrators earn in retirement, they had to file FOIA (Freedom of Information Act) requests and leap over hurdles to obtain the information.  Public servants do not want taxpayers to know that they, the taxpayers, are the real servants, and the public employees the masters.  The whole system is medieval in nature: government owns your property, and you must pay annual rent (property taxes).  You are the sharecropper, they the property owner.  And this is legal, because they pass the laws.  

"Corporate greed" rhetoric is perpetuated by university professors on the public payroll.  They should disqualify themselves from teaching political science entirely, since it is against their personal interest to reveal governmental greed and political elitism.  This is the other big difference between corporate greed and political greed: corporations don't have hundreds of universities and hundreds of thousands of grade and middle schools defending them.

To summarize: the differences between corporate greed and governmental greed are 1) corporations cannot force taxpayers to buy products or pay pensions; 2) government pensions are paid over a lifetime, while corporate greed is limited by the marketplace; and 3) the media and educational systems never give governmental greed the same criticism and importance they give to corporate greed.

1 Etzioni-Halevy, Eva.  Political manipulation and administrative power.  London: Routledge-Kegan Paul, 1979.  Page 1.

2 Ibid.  As noted, public-sector corruption is rarely investigated by academic researchers.

3 Nowlan, James D., Samuel K. Gove, and Richard J. Winkel, Jr. 2010. Illinois Politics: A Citizen's Guide. Urbana and Chicago: U. of Illinois Press.  Page 33.