SNAFU

Situation Normal All F*cked Up

Nobody reading this will disagree that the world we live in is badly fucked up and big mistakes have been made. But what if this wasn’t a mistake? What if it is by design? There is a lot of evidence pointing to this being the case. Who is to blame, politicians, greedy corporations, apathetic voters? There is plenty of blame to go around, but it is more interesting to try to understand how this has come about.

The rise of corporate power in the world has been unrelenting since the end of World War II. Eisenhower famously warned us against the rise of the military-industrial complex. The bribery scandals of the 1970s exposed that exactly what Eisenhower warned against had come to pass. Corporations were bribing government officials worldwide and gaining undue influence. The Foreign Corrupt Practices Act of 1977 was designed to prevent corporations from corrupting foreign governments, but not our own. Through the 1970s, corporate boards still had ethical concerns and promoted corporate responsibility to the communities in which they operated, towards their workers, and to society as a whole — so long as it didn’t interfere with profitability.

In the 1980s, this changed. Corporations began to shed the role of corporate citizen and the focus shifted entirely to the value returned to shareholders. Short-term gain became the entirety of corporate ethics. Hostile corporate takeovers and asset liquidation became the norm. As the fictional corporate raider Gordon Gekko famously put it in the film Wall Street, “Greed is good.” Greed has become the end-all and be-all of corporate culture ever since.

The tobacco industry led the way in creating a catalog of tools for influencing public opinion and derailing regulation. From the 1950s on, the tobacco industry had been fighting against the evidence that smoking was associated with lung cancer. Through advertising and endorsements by doctors, they cast doubt on the studies that showed a connection, and they vigorously fought and won any lawsuit that sought to hold them liable for harm done. Big tobacco companies were also leading contributors to political campaigns during these years. They were able to get politicians to work against any proposed regulation.

In the 1990s, when FDA Chairman David Kessler investigated the addictive nature of nicotine, Senator Bob Dole made the statement: “We know smoking tobacco is not good for kids, but a lot of other things aren't good. Drinking's not good. Some would say milk's not good.” Despite these efforts, Kessler pushed on, and when Congress held hearings, the CEOs of the tobacco companies testified under oath that nicotine and their products were not addictive—at the same time that industry documents leaked, revealing that nicotine levels were being engineered to maximize addiction.

In 1996, the first settlement of a tobacco litigation lawsuit was made. In 1997, there was an historic settlement of a lawsuit brought by state attorneys general against the tobacco companies. Despite the eventual result in the courts, it is important to reflect on the fact that the tobacco companies were able to carry on for more than forty years with this strategy. It is hard to understand just how cynical one would have to be to work to sell an addictive drug that will kill millions of people and harm the whole society in the interest of a small group of greedy people.

If you are aware of the tobacco playbook, you can see it being put to use by many industries. The nuclear industry worked very hard to turn around public opinion by sponsoring public radio and television and seeding positive stories about new nuclear technologies that were supposedly safer and would alleviate our energy insecurity. It was a very sophisticated and subtle campaign, and it was on the verge of success when the disaster at Fukushima in 2011 reminded everyone why they opposed the expansion of nuclear power. The fossil fuels industry deployed the same playbook and continues to use the tools of lobbying, campaign finance, and disinformation to block further regulation or any responsibility for the harm done to the environment and society by their industry.

The insurance industry takes a more direct approach. Insurance companies pool risks and collect premiums to cover losses. They invest the money and pay the claims of their insured who have a covered loss. They make money by their investments and by carefully assessing the risks they are covering, accurately pricing their premiums to cover the payouts for claims and generate a profit. Insurance companies have an ethical responsibility to consider the interests of the insured as much as they do to make profits for their shareholders. The insurance companies know that if the claims process is made difficult, a percentage of claimants will give up and the company will make more profit by not paying out claims. The cost of potential litigation and awards for “bad faith” had been a check on this becoming official policy, and instead it was promoted by incentivizing claims adjusters to save the company money.

At least it did not seem like official policy until, in the course of litigation over Hurricane Katrina losses, a report by McKinsey consultants for Allstate Insurance came to light and revealed that the game had changed in 1995. Allstate CEO Jerry Choate had asked McKinsey to help him find ways to boost profits. The McKinsey report (https://www.erisa-claims.com/library/Berardinelli article.pdf) essentially said: “When one of your insured has a loss, you assure them that they are being cradled in the soft gloves of a trusted friend, and you give them a low-ball offer of settlement. If they don’t take the offer, then you put on boxing gloves and pummel them into the ground.” The revelation that this was company policy did not sit well with the courts who were hearing cases regarding losses during Hurricane Katrina.

It is not shocking that a company would seek to maximize profits. That is quite normal. What is being changed here is the whole relationship between insurer and insured. The interests of the insured are no longer of ethical concern to the insurer. The only responsibility that the insurance company recognizes is to the shareholders and the insured is to be exploited to extract every penny of profit.

A similar shift has occurred in many other service businesses. The consumers interests and needs are always secondary to the interests of the shareholders. What was once a relationship of trust and mutual benefit has become a one sided transaction of extortion and exploitation. In order to get the services we need we now have to jump through hoops and provide information which can be further monetized by selling to companies that collect data for the use of others that wish to market products and services to us. We are constantly bombarded by unwanted advertising and upselling from those we already do business with. It amounts to an intrusive avalanche of annoying marketing that is nearly impossible to avoid. The old system of competing for customers on the basis of providing a service has been replaced with a system of commodifying the customers and creating services that are extortionate by design. Chances are that you do not have an up to date cellphone because your old one broke or wore out. You had to get one because the technology was changed in a way that you could no longer access necessary services without upgrading.

The health insurance industry example of how this works would be farcical if it were not so deadly. The system has been thoroughly rigged so that if you are ill and need medical attention, you must be armored and prepared for battle to get it. From the telephone menu systems to the patient portals, the whole system is designed to make money for insurers and providers at the expense of those who need healthcare. If you are frustrated and give up, they have succeeded. If the billing is too complicated for you to understand or dispute, they win. It is purposefully designed to make profit, not to provide quality healthcare services in an environment of caring and trust.

If we turn towards government it is even more blatantly clear that it is intentionally broken. Long before DOGE stepped in to maim and dismember agencies the policy of “privatization” had transferred management of government functions to the private sector. In almost every case the result has been a diminution of benefits provided to citizens at a greater cost to taxpayers. The shift from oversight by government employees to the private sector introduced a basic conflict of interest. Is the private contractor really working in the best interest of the public, or in the interest of the company that they work for, the profits of the shareholders, and their own career advancement? Because the government has been stripped of expertise by these privatization schemes there are few left who can manage the contracts and act as watchdogs. Even these functions have been contracted out. Throw a rock in any direction in Washington and it will land on a multi-billion dollar taxpayer funded project that failed to deliver the services contracted for. Government IT services are notorious for this. The IRS, FAA, State department, and CBP all have had major failed contracts.

As the government adopts a corporate model costs increase and benefits are diminished. The National Parks are a great example of this. They were primarily funded by tax dollars until the 1980’s when the Reagan Republicans decided that everything should be done on a pay for services basis and fees rose dramatically. It was an affordable vacation even for someone making minimum wage, now it will cost you and a friend 90$ to stay in a tent for the night in Yellowstone. Wherever you look you will see agencies captured by industry (EPA), agencies starved of resources (IRS) and agencies politicized and corrupted to advance an agenda of privatization (Education). All broken on purpose.

These examples show that many so-called “inconveniences” of modern life are not accidents. They are features of a system deliberately built around greed. The bad news is that this culture of greed pervades society. The good news is that we can push back. Informed consumers, strong unions, local activism, watchdog groups, nonprofit advocacy, and political pressure all help. Even small actions—writing letters, calling officials, volunteering—chip away at corporate power. Most of all we need to reestablish our democracy to promote all of our interests as a society. We need to reform our campaign finance laws and rid our government of the corruption that has built this system. We need a new generation of politicians who will serve for all of us, not just the wealthy and powerful. We need everyone to honor their civic duty to be informed and involved in making our democracy work.