Who’s Greedy?

 

The term “greedy corporations,” or its equivalent, seems to appear regularly in commentaries about oil and gas prices, pharmaceuticals, energy, minimum wage, housing, the mortgage crisis, tax policy — just about every economic or social issue.  “Greedy corporations” and, by implication, their “greedy” owners, are said to be responsible for many of the ills that befall our society.  However, as Pogo famously said, “We have met the enemy and they is us.” 

To begin with, corporations aren’t greedy or generous or socially conscious — or anything else, for that matter.  They are merely a legal fiction, entities created by the state for the purpose of facilitating the conduct of business.  They can sue and be sued in the courts, but they do not eat, breathe, love or hate, or vote, or any of the other things that people do.  So, how can they exhibit such human characteristics as greed?   And, if corporations can’t actually be greedy themselves, then perhaps it is their owners and managers who are.

 

And, who might these terrible people be?  They are your friends, relatives, neighbors, church and community leaders, directors and executives of non-profit entities, school administrators — just about any leader of any enterprise, perhaps you yourself. No doubt you may think some of them are greedy, but certainly not all, nor even most of them.  Who qualifies as greedy and who makes that determination?  You?  Or are others deciding for you?

Major corporations, such as the Fortune 500 companies, generally are owned by many thousands or millions of shareholders, often through union pension trusts, retirement plans, mutual funds and other investment entities, which assemble the power of numbers to make large investments on behalf of their individual investors — us.

 

However, for the most part, small corporations are businesses that don’t have enough economic power to influence anyone. 

They are usually just vehicles for managing the affairs of a business, providing a way for their owner-operators to make a living. Their profits are often not much more than wages, and not too great a wage at that.  Are these the greedy corporations we read or hear about so often?

Out of a total of approximately 5.6 million corporate tax returns filed in 2004 (IRS Statistics: Number of Returns, Receipts, and Net Income by Type of Business), freerepublic.com reported that over three million small businesses were so-called Subchapter S corporations. They pay little or no income tax on their earnings because they are treated like partnerships for tax reporting purposes.  These are referred to as “pass through” entities, which means they simply pass their earnings through directly to the owners, who include them on their personal income tax returns and pay taxes on the corporate profits at individual rates.

Further demonstrating the extent to which “greedy corporations” are us, in their “Outline of the U.S. economy,” www.usinfo.state.gov noted, “Fully 99 percent of all independent enterprises in the country employ fewer than 500 people.  These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration…By contrast, 47.7 million Americans work for firms with 500 or more employees.”

 

If corporations can’t actually be greedy, and if their owners are, for the most part, us, where does the notion of “greedy corporations” come from, and why?  The obvious answer is from the media and other special interest groups, such as politicians, who want to influence the public’s view of various issues.

The public is continually duped into accepting broad brush character assassination that is intended to influence their perceptions for political purposes. Just one example is the problem of escalating oil and gas prices, which politicians repeatedly use for political theater in an effort to enhance their own credentials as crusaders who are trying to regulate the market for their constituents.

No one ever seems to point out that the very people who label someone else as greedy are, in fact, often guilty of the same behavior themselves.

Taxpayers are called greedy if they want to keep their own money, but politicians who want to take it from them and spend it themselves are not.

Or, large corporations, particularly drug, oil and energy companies, are labeled greedy when prices go up and their profits increase but not when prices go down and they lose money. 

It’s ok to lose money, but apparently it’s greedy to make it, unless, of course, we are the ones making the profit.  But, that’s just my opinion.

 

© 2008 Harris R. Sherline.

All rights reserved.

Read more of Harris Sherline’s commentaries on his blog at http://www.opinionfest.com.