Whenever hugely profitable corporations mount a charm offensive, keep your hand on your wallet. Consider the current epidemic of corporate do-gooding.
Whenever hugely profitable corporations mount a charm offensive, keep your hand on your wallet. Consider the current epidemic of corporate do-gooding.
Item: Wal-Mart, under fire for paying less than a living wage, has gone on an all-out public relations campaign to change the subject -- to almost any good cause. Wal-Mart CEO Lee Scott had a press conference with Andy Stern, head of the Service Employees International Union, to pledge mutual support for universal health insurance (details to come later). The company unveiled a program to press Wal-Mart suppliers to hire a more a diverse workforce (an issue Wal-Mart's critics had not raised ). Wal-Mart's new "Sustainability 360" program is a wet kiss for environmentalists.
Wal-Mart even belatedly endorsed a higher minimum wage -- its workers make just above minimum wage -- though the retailer is not lobbying seriously to promote minimum-wage legislation. But with all of this warm, fuzzy outreach on every issue but its own low wages, Wal-Mart is not altering its core cheap-labor strategy. And it's far from clear who is using whom.
Item: AstraZeneca, which makes the blockbuster indigestion drug Prilosec, has an advertising campaign headlined "A Simple Way to Get More Out Of Medicare Part D." The ads point to the annoying "doughnut hole" that causes elderly people to lose drug coverage once total annual claims hit about $2,400.
AstraZeneca's helpful hint? Buy over-the-counter Prilosec (for about $400 a year) rather than its generic prescription equivalent Omeprazole, and delay hitting the doughnut hole. (Net consumer financial gain: zero.) What AstraZeneca doesn't say is that the coverage gap resulted from the drug industry campaign to prevent Medicare from offering a more cost-effective public drug plan. Nor does it tell you that even though Prilosec is now off-patent, AstraZeneca's manipulations of the FDA has kept the generic equivalent far more costly than it should be.
Item: TXU Corp., the Texas-based utility, and its prospective buyout partners, Kohlberg Kravis and Texas Pacific, have gotten great press for pledging not to build five or six of the 11 coal-fired generating plants they were planning.
By getting the support of some green groups for scaled-back construction plans that the company never should have entertained in the first place, TXU gets their blessing for this $43 billion buyout deal. TXU and its buyers succeeded in changing the subject -- from TXU's monopoly power, the huge rate increases that have hit Texas consumers, and the lack of transparency for a deal that will create even more monopoly power and rate hikes. Guess which kind of green this belated conversion is really about?
This is not the first time that some environmentalists have served as corporate enablers of electricity deregulation and buyout deals that gouged consumers. One such deal got some environmental commitments in exchange for California's massive deregulation, which opened the door to Enron's abuses.
Item: The largely unregulated hedge fund industry, under fire for contributing to the instability responsible for this week's stock market meltdown, is on an image offensive to promote its own charity, Hedge Funds Care. Since its founding in 1998, the group has dispensed $22 million in tax-deductible gifts to diverse philanthropic causes. That is so much less than one-10th of 1 percent of hedge fund profits that my calculator can't even do the arithmetic.
Hedge Funds Care should make a donation to Citizens for Tax Justice to promote its work advocating a more progressive tax system. Then the hedge fund gazillionaires would pay more taxes and public programs that help needy people would not be gutted. It could donate to Public Citizen, which works to keep what's left of financial regulation. Then, maybe, the current stock-market meltdown won't become a depression.
Item: Sirius CEO Mel Karmazin told skeptical members of Congress that his proposed merger of Sirius with XM, to create a monopoly in satellite radio, was intended to benefit consumers. Monopoly pricing power? Perish the thought.
All of these companies and their public relations machines exist to earn a profit, not to do good works. Profit is what drives the private-enterprise economy, of course -- but when profit becomes the sole purpose of society, it can drive the economy right off a cliff. Buyer beware.
Robert Kuttner is co-editor of The American Prospect. A version of this column originally appeared in the Boston Globe.
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