Corporate Cannibalism Gobbling Up middle Class

• Merger mania means international corporations get more, consumers get less and family farmers get killed.

The merger frenzy sweeping the world of international mega-conglomerates and the financial markets is creating a "new concentration of power" that threatens to subvert America's constitutional social and legal order, federal overseers and Establishment economists are warning.

"Just look at the official statistics," says Assistant Attorney General Joel Klein, the Clinton administration's chief trust-buster, who is leaving government this month in frustration for a job in the private sector.

"In the final year of the Bush administration, the sum total of company mergers and acquisitions (M&A) was around $700 billion, already an all-time high," recalled Klein.

"This year it'll top $2 trillion -- an almost 300 percent speedup in national and international corporate consolidation. That's more than an economic signal -- it's a storm warning."

Leading economists expressed similar views.

"Something mysterious and momentous is clearly going on," warned Prof. Paul J. Samuelson. "Since 1995, the cumulative value of corporate mergers and acquisitions has risen to over $5 trillion. This may well be the most 'uncovered' business story of our time."

The onrush of what some Wall Street insiders call "corporate cannibalism" mystifies Establishment market-watchers because many major mergers turn out to be losers.

Ironically, the super-salaried, high-IQ stuffed shirts and predatory bankers who effect these mergers often see the resulting merged company hit the skids and become less profitable.

"Since Daimler-Benz [the German automaker of the Mercedes Benz line] and the Chrysler corporation merged last year, their market capitalization has fallen almost 20 percent," said Trevor Ruther ford, a retired investment-bank ex ecutive.

The same thing happened when AOL and Time-Warner announced their in tent to merge earlier this year or when ATT gobbled up some of its competitors -- their share price is down by nearly a fifth, or worse.

Among the nation's major commercial banks, Bank One and First Union, the two most "voraciously merger-and-acquisition driven" financial powerhouses, as one observer put it, reported some of the largest losses this year.

The stock of the Chase Manhattan conglomerate, known as the "Rockefeller family bank" -- itself the end result of a series of unions involving Manufac turer's Han over, Chemical Bank and the original Chase money-center -- has fallen a disastrous 34 percent since it an nounced its latest $31-billion merger with J.P. Morgan last month.

In fact, many megacorporate unions are not driven by conventional profit motivation at all.

"They merge in the hope of becoming dominant in their field, a position that raises the prospect of uncontrolled superprofits and a more powerful social role for corporations in years to come," explained Rutherford.

That is exactly why the latest wave of mergers is a menace, said economist Otto Thiele.

"Put plainly, these businesses expect to extract more and more money from the public in return for fewer goods and benefits," he explained.

A SPOTLIGHT review of recent data from the Better Business Bureau (BBB) and a number of academic sources has come up with alarming evidence that in the so-called "service economy," the service extended to customers by the largest corporations is deteriorating rapidly.

Consumer complaints about telephone service are up sharply. The statewide BBB recorded 62 such grievances in September 1999 in Michigan. By last month, the number had shot up to 1,772 complaints received. In Ohio, protests against unsatisfactory phone service soared from 123 to 1,524 during the same period.

There has been a similar sharp rise in complaints about air travel and smaller but significant increases in expressions of discontent about the deteriorating service conglomerate hotel chains, stores and banks extend their customers.

Family farmers say that the wave of consolidation among agribusiness giants means that small farmers are receiving less and less for their produce, while consumers pay higher prices. The recent merger of Cargill Inc. with Continental Grain, the two largest U.S. grain operators, or the acquisition of IBP, the nation's leading meat packer, by Archer Daniels Midland, a mega-conglomerate with a recent criminal price-fixing conviction on its record, are two examples.

"A handful of agribusiness giants now make up the market in much of the Farm Belt," said reporter Joseph Weber, who covers the grain and cattle trade for national business magazines. "The in tense concentration of the buying power of consolidated conglomerates is putting a painful squeeze on family farmers -- and may drive them out of business altogether, unless Congress takes prompt action."

A high official of the State Department said the concentration of oil and food supplies through mergers and corporate takeovers of small farms point to a future where the super-wealthy exploit what is "temporarily" the middle-class America.

All statistics show that as the corporate brass and bankers take more and more of the total national income for their own salaries, options, bonuses and perks, the middle class loses. Today, the gulf between American workers and farmers widens, thanks to Republicrat free trade policy and corruption. Americans are pitted against Mexican, Chinese and African workers, and as their wages go down, the super-rich plutocrats take the profit. Thanks to the controlled media in the United States, anyone who points these facts out is silenced by being ignored.

At the end of the road is the Global Plantation, incredibly inefficient but fantastically profitable for the plutocrats at top. It used to be called slavery, today it's democracy.