WHEN PENGUINS FLEW AND WATER BURNED This is the true memoir of one US Air Force navigator’s journey from the schoolhouses of Air Training Command to the nuclear alerts of the Cold War to combat in a 35-year-old anachronism called the B-52. It is a first-hand account of life during the last days of Strategic Air Command, the early days of Air Combat Command and the ensuing military drawdown of the 1990s. From peacetime training exercises across the globe to combat operations in Desert Storm, Jim Clonts takes the reader inside the cockpit where life and death are seconds apart. Often comical, sometimes heart-pounding, other times tragic, WHEN PENGUINS FLEW AND WATER BURNED takes you into the world of military aviation, a crucible where warriors learn the true nature of character, conscience and mortality.

Friends of Liberty VOL 53
by Jim Clonts, 2010

05/17/2010

I received some passionate, well written criticism over my last piece dealing with Liberals and corporate profits. My intent was to show that, although Liberals demonize profits, they also rely heavily upon them, often benefiting more than the corporation itself. I was attempting to show the hypocrisy of their message.

The primary criticism I received for this piece was aimed at my assertion that corporations are more able to capitalize on their profits to the benefit of society than the Government. I stated that corporations use their profits to reward investors, invest in new technologies, equipment or processes, and expand operations

Jon from Iowa---or maybe Illinois?--- agreed with a few of those, but indicated that a great deal of the profit of Mega-Corporations goes to "buying off the Government to allow them to buy up their smaller competitors and increase the size and scope of their operations while eliminating potential and/or actual competitors, or to manipulate the stock price/dividend payout." He makes a great point. I'm sure for many Mega-Corporations he is correct.

So here's the real question, "If these Mega-Corporations' successes are due to buying Congressional favor, isn't it fair to say a corrupt Government is at the heart of the problem?" Isn't this once again a case of the Government interfering with the Free Market? An even better question, "Can a company even reach Mega-Corporation status without Government intervention?"

Jon uses AT&T as an example of a company on the verge of monopoly status. He asked what would happen if it became a monopoly? Thirty years ago its predecessor, Bell Telephone, was a monopoly and the Government broke it up to ensure continued market competition, spawning AT&T as a separate entity. At one time Government broke up large companies into smaller, competing companies if they verged on becoming monopolies. Today, through what amounts to bribes and pay-offs, Government allows the monopolies they desire to exist and grow (ie General Electric).

Jon said his company actually placed the customer fifth in terms of priority and was only interested in immediate profits. I hate to say tell you this, John from Iowa (or Illinois?), but you may need to look for a new job---and soon. Any company that places the customer's satisfaction below immediate profits will not survive---unless a corrupt Government deems you too big to fail and funnels taxpayers dollars your way.

In the past some Mega-Corps have gotten bloodied by the upstart. IBM was a giant in the computer industry, with unlimited resources and huge, exclusive Government contracts. While they were installing IBM 360 mainframes at every major company and Government Agency, the founders of Apple and Hewlett Packard were building circuit boards in their garages. Thirty years later---does IBM even make a PC anymore?

As far as re-investment of profits goes, my company is a division of a very, very, large, international corporation. You would recognize the name if I said it. (Some of you know the name, but it is not relevant to this argument.) My company's sales (sales, not profits) are in the $2.5-2.8 billion/year range and our capital budget is in the vicinity of $150-200 million/year. As an engineer I'm glad of this for obvious reasons. We are constantly upgrading our facilities, improving our processes, installing new technologies and developing new consumer products. Our capital investment plan is a percentage of our sales and we strive to use that money efficiently and effectively. When I speak of companies reinvesting profits back into themselves, I speak only from the experience of my company, the undisputed world leader in our industry.

While we can lay blame for the corruption on both Mega-Corps and Congress, there is a noteworthy distinction. We do not elect corporations to represent us and look out for our interests. We do elect our Senators and Congressmen, bestowing on them a sacred trust. They are supposed to be moral, ethical, honest people who look out for the interests of their constituents, their states and the nation as a whole. They should be held to at least the same ethical and legal standards as the average citizen. (Which means they should have to pay their taxes, follow the rule of law and pay the same price for their misdeeds as average Americans.) In truth, We the People are to blame. We have lived under the credo: "Sure he's a crook, but he's our crook." for far too long.

I'm often accused of painting a Utopian view of Capitalism---and I'm guilty as charged. Every media outlet in the world (yes, even Fox News at times) is quick to point out the failings of our economic system, every scandal, every incidence of corporate malfeasance, every twitch of the market, etc. They are deemed the failings of Capitalism, however, when one examines them closely, one usually can find the root causes are deviations from true Capitalism, in some cases criminal behavior, in others Government intervention due to political pressures.

Capitalism is not perfect. There are Bernie Madofs out there scamming people for billions. Corporations and individuals are cheating on taxes. Some investors are trading on insider information. Back room deals between competitors may be fixing prices and perverting the market even as we speak. These are called crimes. Too many people call this Capitalism. It is like condemning our system of free elections because some voter fraud exists.

I don't feel the need to rail on Capitalism or the Free Market when crimes are being committed. There is historical, empirical data that indicates the Capitalist system works and has created the greatest prosperity for the most people in the history of the world. Our problems today stem from abuses and perversions of the system, most stemming from either criminal behavior or Socialist Government agendas. Most companies are run ethically and do their best to provide the consumer with a superior product and a superior price to gain market share and profits. Most heart surgeons are skilled and dedicated healers who do their best, but if one takes a shortcut and kills a patient, I do not want to ban open heart surgery.

This is why I stress the basic tenants of Capitalism: free markets, free enterprise, competition, risk, reward, profit/loss. It is when we stray from the basics that we get in trouble.

Even given its shortcomings, I come down on the side of Capitalism because I see more abuse, corruption, cheating and pure thievery at the hands of Government. What corporate malfeasance can approach the sheer magnitude of the squandering of the Social Security Trust Fund? or the $550 billion unfunded pension plan in California? or the unfunded pensions plans of Federal and State employees? or the bankruptcy of Medicare? President Obama himself said we can cut $500 billion over ten years out of Medicare by eliminating fraud. What corporation promises a Socialist Utopia to 300 million people to get their vote at the ballot box with no way to pay for it and then charge their children over $120 trillion in debt and interest? A corrupt (or maybe just cowardly) Government can do far more damage to America that any corporation and it's time we woke up to this fact.

Bottom Line: Jon from Iowa---or maybe Illinois?---is mostly right in his analysis of Mega-Corps---but we must ask ourselves who is to blame? And how do we fix it?

Here is the question I will leave you with this week:

If Capitalism today is too corrupt, too socially unfair, too perverted to be implemented as intended, then what are our alternatives? Fix the system? Transform it into something else? What will that something else be and how will it correspond with traditional American values of personal liberty and freedom? Let the debate begin.

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