The Extraction of America

[One of series written for UnitedRepublic.org in 2012. Original article.]

Let’s get one thing out of the way now – I’m not writing to preach to the converted. Those of you who have read Dylan Ratigan’s Greedy Bastards, who understand the VICI principles, who recognize we are being extracted and how it’s happening – I’m not writing for you.

My aim is to give you talking points to share with people who do not understand what we’ve learned. I will be writing about issues relating to VICI, to extraction, to the shambles our health care system has become, to the exploitation of students through private, government-backed student loans. What I’d like to ask you, dear reader, to do is pay it forward by sharing this, and other articles you find here with others – fostering discussion, exposing people to facts they were unaware of, delivering the perspective we share.

This perspective is what motivates us to be active, to work for change, to confront obvious wrongs and realign our institutions so they serve all, not just the 1% who have worked out how to manipulate others to their benefit. For democracy to work, the electorate needs to be informed. That’s what we’re doing – informing, educating, changing minds…and hearts. Let’s get on with it.

The public understanding of the term extraction is linked to the extraction of natural resources. Greedy bastards understand the term the same way, with an important difference; they see ordinary Americans as a natural resource to be extracted. It’s been happening, it’s happening now, and it will bleed the country dry if it continues.

Have you seen the meme that revises the U.S. government’s budget numbers by lopping off eight zeros to bring the figures down to household budget size? It makes it much easier to appreciate the scale of the problem. Here it is:

U.S. Tax revenue: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent [April] budget cut: $ 38,500,000,000

Lets remove 8 zeros and pretend its a household budget:

Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Budget cuts: $385

Similarly, we need to scale down the size of the extraction problem to the point that anyone can relate to it.

Take the extraction of jobs. Just as you might shop at Walmart to save money, business looks for ways to hold down costs. Their largest expense is usually labor. (That cost has been shrinking over the past year).

Whenever the opportunity arises to reduce labor costs, corporations regard it as their duty to shareholders to take advantage. If work can be done cheaper elsewhere at equivalent quality, it will be done elsewhere.

Ok, we know that. Here’s where it hurts. The cumulative impact of offshoring has helped drive unemployment rates for adults between 18-24 to 46%.

Forty. Six. Percent. The general unemployment rate during the Great Depression was 25%. It is any wonder young people took to the streets during the Occupy protests?

Domestically, corporations also lobby for legislation that helps reduce their labor costs. This is what drives laws to suppress union activity and opens up jobs to H1-B visas. Consequences? Greater leverage at home to hold down wages, fewer jobs to go around and delayed retirement.

The interests of multinational corporations and working people in America are not aligned. Working people want good-paying jobs with benefits, opportunities to move up, health care that works. Large corporations save money by moving jobs elsewhere while enjoying the benefit of all the infrastructure – roads, education, transportation, defense – that American workers paid for and built.

That’s called a raw deal.

Imagine chipping in with friends for a large order of pizza – which they then take elsewhere, leaving you hungry. With friends like that, who needs enemies? As more jobs, plants and investment move overseas, loyalties will follow. When the corporate center of gravity shifts to China, Americans are left hungry for jobs, adequate health care, and a hard-earned retirement.

Not only do corporations take the jobs and run, they continue to receive subsidies in America. When working Americans receive government benefits, they’re attacked as moochers. When Corporate America does it…well, see for yourself – even Walmart does it. Why are the subsidies granted? Because companies can use the threat of moving jobs to other cities or even other countries to lower their costs even further. In 2003 Missouri gave Ford a generous package to keep open a plant in the St. Louis suburb of Hazelwood, only to see the company shut it down three years later. That story has happened before, and will happen again. It’s another form of extraction.

Subsidies to oil companies amount to roughly four billion dollars annually. Ethanol subsidies are even worse – six billion a year, baby. You know it’s bad when a conservative news source and Al Gore agree it’s a subsidy that needs to die.

How about allowing the government to negotiate drug prices for Medicare? The Bipartisan Policy Center’s report, Restoring America’s Future, finds this one simple change can save $100 billion between 2012 and 2018. Drug companies are extracting that much in just four years without breaking a sweat.

And we haven’t even looked at military spending yet.

Extraction is not an abstract concept. It’s very real, it affects everyone in America personally – at the gas pump, at the pharmacy, at your job. And it’s really hammering the upcoming generation’s future. This cannot continue.