{"id":1190,"date":"2023-04-18T15:20:05","date_gmt":"2023-04-18T22:20:05","guid":{"rendered":"https:\/\/savingusmanufacturing.com\/blog\/?p=1190"},"modified":"2023-04-18T15:20:05","modified_gmt":"2023-04-18T22:20:05","slug":"how-multinational-corporations-undermine-american-prosperity","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/outsourcing\/how-multinational-corporations-undermine-american-prosperity\/","title":{"rendered":"How Multinational Corporations Undermine American Prosperity"},"content":{"rendered":"\n

Long-time American manufacturing advocate, Michael Collins, added to his extensive body of work with a 4th<\/sup> book, Dismantling the American Dream: How Multinational Corporations Undermine American Prosperity <\/a> Michael had a 35-year career in manufacturing before retiring and uses hhis experience to write a book he describes as \u201ca concise story that tells what America’s multinationals did to the U.S. economy and how they did it.\u201d<\/p>\n\n\n\n

Michael told me that one of his purposes in writing the book was to take advantage of a commitment letter signed by 181 CEOs on August 19, 2019 \u201cto lead their companies not just for the benefit of their investors, but for the benefit of all stakeholders: customers, employees, suppliers, communities, and shareholders.\u201d He wanted to \u201cprovide the managers of the 181 corporations a good summary of the problems and obstacles they will need to address and overcome if they are going to make good on their commitments.\u201d<\/p>\n\n\n\n

In his book, Michael reveals that multinational corporations (MNCs) began to follow Milton Friedman\u2019s doctrine \u2014 an entity\u2019s greatest responsibility lies in the satisfaction of the shareholders.\u201d He wrote, \u201cIn the 1980s, the Business Roundtable translated this into shareholder value or \u2018the point of a business enterprise is to generate economic returns to its owners, period.\u2019\u201d This resulted in \u201cfavoring shareholders over all stake holders and short-term profits over society and country.\u201d<\/p>\n\n\n\n

His book shows \u201chow the economy has been restructured to fit the needs of the MNCs and their investors, resulting in huge gains in wealth for the few [and] rising inequality while tens of millions of Americans find themselves unable to attain the standard of living of previous generations.\u201d<\/p>\n\n\n\n

He writes that outsourcing \u201cbegan as early as the 1970s, but accelerated in the 1990s after the U.S. negotiated the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA).\u201d He writes, Outsourcing by American corporations has caused permanent damage to American workers, manufactur9ng, supplier companies and the living standards of many families. It may lead to short-term profits for the corporations, but eventually, the corporations will lose the technology and the market to foreign corporations.\u201d He opines that \u201cOver the last 40 years, the MNCs commitment to short-term profits, shareholder value, and outsourcing has resulted in the deindustrialization of America.\u201d<\/p>\n\n\n\n

All of this outsourcing caused a surge in inequality, and he quotes the Job Quality Index developed by the Coalition for Prosperous America, which shows that \u201cIn 1972, 27 percent of all private industry jobs were low-quality jobs. Today, low-quality jobs are 59 percent of all jobs.\u201d<\/p>\n\n\n\n

His brief coverage of \u201cthe Myth of Free Trade\u201d corroborates many of the points I have made in blog articles I have written in the past 13 years. I particularly liked his comment, \u201cthe winnings of free trade have gone mostly to the investors \u2014the MNCs and their shareholders. Free trade has been very hard on workers, manufacturers, suppliers, and industries\u2026\u201d<\/p>\n\n\n\n

In his chapter \u201cInnovation and the Loss of Technology, he lists several key American inventions patented between 1945 \u2013 1982, such as microwave ovens, hard disk drives, laser, MRIs, GPS, mobile phones, personal computers, and comments that \u201cmost of the inventions listed above are no longer manufactured in America.\u201d He points out that \u201cChina has already swallowed the low-tech products we used to make. What they want now is our advanced technology products and production processes that were developed in the United States. The technologies they are after are all listed in their Made in China 2025 plan.\u201d<\/p>\n\n\n\n

The data in his chapter \u201cThe Slow Erosion of American Manufacturing Industries is mind-blowing and frightening with regard to how many manufacturing sectors have declined, some to the point of no return.  His comment that \u201call former Presidents since Bill Clinton rely on their economic advisors and abandon manufacturing\u201d rings true.<\/p>\n\n\n\n

His analysis of Financialization, \u201cdefined as the \u2018growing scale and profitability of the finance sector at the expense of the rest of the economy and the shrinking regulation of its rules and returns\u201d provided a new perspective for me.  It was startling to learn that \u201ctoday finance has 40 percent of the nations\u2019 profits with 5 percent of the jobs.\u201d  He writes that some of ways \u201cFinancialization has hurt the American economy\u201d are:<\/p>\n\n\n\n