+ Reply to Thread
Results 1 to 2 of 2

Thread: The 10 Worst Corporations of 2008

  1. #1

    Default The 10 Worst Corporations of 2008

    The System Implodes:


    The 10 Worst Corporations of 2008

    AIG
    Cargill
    Chevron
    CNPC
    Constellation Energy
    Dole
    General Electric Imperial Sugar
    Philip Morris Int’l.
    Roche
    2008 marks the 20th anniversary of Multinational Monitor’s annual list of the 10 Worst Corporations of the year.



    In the 20 years that we’ve published our annual list, we’ve covered corporate villains, scoundrels, criminals and miscreants. We’ve reported on some really bad stuff — from Exxon’s Valdez spill to Union Carbide and Dow’s effort to avoid responsibility for the Bhopal disaster; from oil companies coddling dictators (including Chevron and CNPC, both profiled this year) to a bank (Riggs) providing financial services for Chilean dictator Augusto Pinochet; from oil and auto companies threatening the future of the planet by blocking efforts to address climate change to duplicitous tobacco companies marketing cigarettes around the world by associating their product with images of freedom, sports, youthful energy and good health.


    But we’ve never had a year like 2008.


    The financial crisis first gripping Wall Street and now spreading rapidly throughout the world is, in many ways, emblematic of the worst of the corporate-dominated political and economic system that we aim to expose with our annual 10 Worst list. Here is how.

    Improper political influence: Corporations dominate the policy-making process, from city councils to global institutions like the World Trade Organization. Over the last 30 years, and especially in the last decade, Wall Street interests leveraged their political power to remove many of the regulations that had restricted their activities. There are at least a dozen separate and significant examples of this, including the Financial Services Modernization Act of 1999, which permitted the merger of banks and investment banks. In a form of corporate civil disobedience, Citibank and Travelers Group merged in 1998 — a move that was illegal at the time, but for which they were given a two-year forbearance — on the assumption that they would be able to force a change in the relevant law. They did, with the help of just-retired (at the time) Treasury Secretary Robert Rubin, who went on to an executive position at the newly created Citigroup.

    Deregulation and non-enforcement: Non-enforcement of rules against predatory lending helped the housing bubble balloon. While some regulators had sought to exert authority over financial derivatives, they were stopped by finance-friendly figures in the Clinton administration and Congress — enabling the creation of the credit default swap market. Even Alan Greenspan concedes that that market — worth $55 trillion in what is called notional value — is imploding in significant part because it was not regulated.

    Short-term thinking: It was obvious to anyone who cared to look at historical trends that the United States was experiencing a housing bubble. Many in the financial sector seemed to have convinced themselves that there was no bubble. But others must have been more clear-eyed. In any case, all the Wall Street players had an incentive not to pay attention to the bubble. They were making stratospheric annual bonuses based on annual results. Even if they were certain the bubble would pop sometime in the future, they had every incentive to keep making money on the upside.
    Financialization: Profits in the financial sector were more than 35 percent of overall U.S. corporate profits in each year from 2005 to 2007, according to data from the Bureau of Economic Analysis. Instead of serving the real economy, the financial sector was taking over the real economy.

    Profit over social use: Relatedly, the corporate-driven economy was being driven by what could make a profit, rather than what would serve a social purpose. Although Wall Street hucksters offered elaborate rationalizations for why exotic financial derivatives, private equity takeovers of firms, securitization and other so-called financial innovations helped improve economic efficiency, by and large these financial schemes served no socially useful purpose.

    Externalized costs: Worse, the financial schemes didn’t just create money for Wall Street movers and shakers and their investors. They made money at the expense of others. The costs of these schemes were foisted onto workers who lost jobs at firms gutted by private equity operators, unpayable loans acquired by homeowners who bought into a bubble market (often made worse by unconscionable lending terms), and now the public.


    What is most revealing about the financial meltdown and economic crisis, however, is that it illustrates that corporations — if left to their own worst instincts — will destroy themselves and the system that nurtures them. It is rare that this lesson is so graphically illustrated. It is one the world must quickly learn, if we are to avoid the most serious existential threat we have yet faced: climate change.


    Of course, the rest of the corporate sector was not on good behavior during 2008 either, and we do not want them to escape justified scrutiny. In keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we include only one financial company on the 10 Worst list.



    Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.

    AIG: Money for Nothing


    There’s surely no one party responsible for the ongoing global financial crisis.


    But if you had to pick a single responsible corporation, there’s a very strong case to make for American International Group (AIG).


    In September, the Federal Reserve poured $85 billion into the distressed global financial services company. It followed up with $38 billion in October.
    The government drove a hard bargain for its support. It allocated its billions to the company as high-interest loans; it demanded just short of an 80 percent share of the company in exchange for the loans; and it insisted on the firing of the company’s CEO (even though he had only been on the job for three months).


    Why did AIG — primarily an insurance company powerhouse, with more than 100,000 employees around the world and $1 trillion in assets — require more than $100 billion ($100 billion!) in government funds? The company’s traditional insurance business continues to go strong, but its gigantic exposure to the world of “credit default swaps” left it teetering on the edge of bankruptcy. Government officials then intervened, because they feared that an AIG bankruptcy would crash the world’s financial system.


    Credit default swaps are effectively a kind of insurance policy on debt securities. Companies contracted with AIG to provide insurance on a wide range of securities. The insurance policy provided that, if a bond didn’t pay, AIG would make up the loss.


    AIG’s eventual problem was rooted in its entering a very risky business but treating it as safe. First, AIG Financial Products, the small London-based unit handling credit default swaps, decided to insure “collateralized debt obligations” (CDOs). CDOs are pools of mortgage loans, but often only a portion of the underlying loans — perhaps involving the most risky part of each loan. Ratings agencies graded many of these CDOs as highest quality, though subsequent events would show these ratings to have been profoundly flawed. Based on the blue-chip ratings, AIG treated its insurance on the CDOs as low risk. Then, because AIG was highly rated, it did not have to post collateral.


    Through credit default swaps, AIG was basically collecting insurance premiums and assuming it would never pay out on a failure — let alone a collapse of the entire market it was insuring. It was a scheme that couldn’t be beat: money for nothing.



    MORE- http://www.multinationalmonitor.org/.../weissman.html
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

  2. #2
    Join Date
    Nov 2006
    Location
    Midwest
    Posts
    1,468

    Default Climate change

    This is the least of our problems. This earth has went through many climate changes, ice ages and others through it's billions of years. What will change is man, he will become extinct or nearly so and in time the Earth will return to the paradise it once was.

    Man thinks he is this great player in the history of the Earth, the Alpha and the Omega, he is in for a rude awakening. Man's numbers must soon be cut, dramatically, and it will come at natures hand or man's own.

    Humans are a very evil creature. Jesus Christ must be getting very short fused about now.

    CP
    "Midwest Masters Of Advantage", "Strength and Honor."

+ Reply to Thread

Similar Threads

  1. Remembering Marilyn Ferguson 1938-2008
    By zengrifter in forum ZenZone General Discussion
    Replies: 9
    Last Post: July 28th, 2015, 08:30 PM
  2. USA 2008: The Great Depression
    By zengrifter in forum ZenZone General Discussion
    Replies: 1
    Last Post: October 1st, 2008, 10:01 PM
  3. The High Tide - Ron Paul 2008
    By zengrifter in forum ZenZone General Discussion
    Replies: 5
    Last Post: March 18th, 2008, 12:40 AM
  4. How Multinational Corporations Avoid Paying Taxes
    By zengrifter in forum ZenZone General Discussion
    Replies: 0
    Last Post: November 22nd, 2006, 01:35 PM
  5. 'Open Internet' Threatened by Governments & Corporations
    By zengrifter in forum ZenZone General Discussion
    Replies: 0
    Last Post: November 26th, 2005, 06:02 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts