STAFF NEWS & ANALYSIS
Corporations vs. Capitalism
By Philippe Gastonne - May 06, 2015

The spectacular crash of Corinthian Colleges after years of systematically deceiving thousands of students into enrolling into low-quality, high-cost education programs has once again raised questions about how the for-profit college industry staved off stronger rules governing the $1.4 billion per year in federal loans that helped keep Corinthian afloat.

Some hints emerged today in the giant chain's filing for Chapter 11 bankruptcy protection in Delaware. It shows that Corinthian made secret payments to an array of political consultants, think tanks and political dark money groups.

The filing doesn't list amounts, but shows that Corinthian made payments to Crossroads G.P.S., a group co-founded by Karl Rove that has raised over $300 million to elect Republican members of Congress through campaign advertising. Crossroads G.P.S., a 501(c)(4) nonprofit, does not disclose any of its donors.

Crossroads G.P.S. spent over $700,000 to help elect Sen. Marco Rubio, R-Fla., during his 2010 election. As Bloomberg News revealed, Rubio later filed a letter with the Department of Education, requesting that the agency "demonstrate leniency" with Corinthian. – The Intercept, May 4, 2015

In theory, profit-seeking colleges ought to deliver better service at a lower price than state-run institutions. Some probably do, but a tangled web of political influence and regulatory interference makes it hard to know.

The Corinthian College's bankruptcy filings give us an inside look at the extent to which supposedly "private" colleges are actually disguised creatures of the state. Their business model depended on a steady flow of Washington favors. The company spent heavily on influence-buying activities so the flow would continue.

This should be a clue. If a company can't stay in business without constantly seeking taxpayer support, it probably doesn't qualify as "free enterprise." The market is sending a signal that the capital and workers ought to look for better uses elsewhere.

The surprising part of The Intercept's reporting is the linkage between political gifts and politician response. Corinthian gave money to Crossroads. Crossroads helped put Marco Rubio in the Senate, from which he asked the bureaucracy to go easy on Corinthian.

Then we have the supreme irony: Rubio apparently will make "supporting business" a key plank in his campaign for the White House – and more than a few Republican activists will believe him.

The same happens on the other side of the aisle. Corinthian sought favors from Democrats as well as Republicans. Crony capitalism is completely non-partisan. Companies will pay whomever it takes to get what they want.

There is a partisan difference, though. We expect Democrats to support statist activities, and they usually do. But many, perhaps most, Republicans think they support a free market when, in fact, their candidates are indifferent or even hostile to economic freedom.

When will they ever learn?

Posted in STAFF NEWS & ANALYSIS
  • There does not have to be a ‘state’ for Capitalism to work, indeed the free market is the very life-blood of a healthy economy and of a harmonious human society when unencumbered by ‘the state’. The less ‘the state’ the more competition arises, the more competition arises the broader the economic and social benefit.

    Corporatism is another matter and the two, Capitalism and Corporatism, should in no way be confused. Corporatism is utterly dependent on government to grant it faux personage, indemnity, patent, monopoly and privilege. True that Capitalism will seek-out whatever benefit it can derive from whatever medium in which it is set; and that includes taking whatever advantage it can derive and coerce from ‘the state’. When Capitalism so feeds from ‘the state’ it morphs into Corporatism. That is not the fault of Capitalism but rather that is one of the many faults of ‘the state’.

    End ‘the state’. End Corporatism! Long live Freedom. Long live Capitalism. Long live the Free Market.

  • The oil cartel recognized a long time ago that to extend their market capture to oil derived synthetic drugs, they would need to wield influence that then became control over the principle medical colleges. This operates as ‘philanthropy’ and gives both positive PR and leverage in one agenda.
    Economics often attends to an ideational construct that does not perhaps fully address the underlying issues of power – to which money flow or financial status is simply a tool.
    Power can be defined on different levels and those who subscribe to and trade in such definitions give it currency.
    When insanity is no longer disguise-able, it behoves the fragmented consciousness to yield to a true sanity that is not manufactured as a re-definition by a would-be power – nor merely reacting against such perceived evils and thereby being negatively defined By them.
    Corporate law is a significant factor in the ‘entity’ we call corporate.
    Much of what we decry or hate in our world is simply the logical outcome of ides and definitions to which we give allegiance by regarding them as meaningful. The definitional templates of Consciousness by which we live and act and experience being human may be coercively imprinted in our conditioning, but they are not actually operating against our will. That is to say, there are hidden pay-offs that are involved in our subscriptions to fear-based thinking, which dissolve or are seen as without foundation when brought to light.
    The corporate is effectively outmanoeuvring the state and capturing regulatory bodies such as to mean there IS no state in terms of what ever that once meant – but more a regional puppet reality through which power operates. When the global state is in place, corporate power will be stripped back just as Stalin used and then eradicated the industrialists… for power – or rather the will to power – only uses its puppets until they are no longer of use – and then they are discarded or neutered of any potency or voice. It is a kind of death wish in the form of a carrot worthy of attaining or a stick too fearful to face.
    The distortions of fear give rise to the mind that seeks to hide from fear as well as the mind that hides its fearful agenda in deceits. They dance together. The idea of Sovereignty is much deeper than that of political kings – it is the idea of free will at the very foundation of what it is to Be Human. That this idea has been corrupted and adulterated and thus usurps Sanity is a basis from which to uncover for oneself the recognition and nature of what free will actually is – instead of operating from inherited conditionings of generational compounded errors.
    My own witness is that willing has become subverted to a conditioned wilfulness that believes itself free. Hence willingness is the capacity to pause this mechanism from its defaults and question and feel and know one’s own purpose – free of such distortion or false framing.
    Without a true foundation – all else can only persist in variations on a theme yet to be brought into light and recognized as false or meaningless. No one persists in the meaningless once recognized as such. But while it can be defined in terms of ‘increased productivity’ or ‘opening trade from regulatory barriers’ – it can still attract allegiance.
    It is all a matter of choice – but unless one lives and knows one’s purpose, one has effectively chosen to let others decide for you.
    What is purpose? It is what comes First. Those who seek to fit the Life into their goal seek power at cost of Life. It is a lesson plan in futility.

  • Samarami

    Should it surprise any of us that wherever brains are contracted to be stimulated (in the form of formal education — government or non-government) psychopaths acting under the abstraction referred to as “government” will weasel in to inculcate students to view each concept from the point of view that monopoly state serves a socially useful purpose? That is fundamental to the science of rulership.

    http://agoracosmopolitan.com/home/Frontpage/2008/01/02/02073.html

    Sam

  • disqus_QZX8ENhLyb

    When “cronyism” is involved, the economic system is no longer properly called “capitalism.” Cronyism involves governmental intervention into the economic system, otherwise known as collectivism/socialism. Therefore, “crony socialism” is the proper term to use to describe “cronyism.”

  • Joelg

    Corinthian makes an interesting case study, but not for the reasons cited in the article. Microsoft, General Electric, Bank of America, Goldman Sachs, Archer Daniels Midland, Big Pharma, Military-Surveillance Contractors, Trial Lawyers, Public Employees Unions, etc. all do the same thing in terms of currying favor, but on a much more massive scale.

    TPP, the trade agreement being considered for fast-tracking by Congress, is at the heart of this. As part of TPP, vast sums of money will be funneled to trade colleges for job training. These funds are already in the pipeline, even though TPP has yet to happen. USA.gov has already determined that TPP will eliminate vast numbers of jobs in the USA. Patrick Buchanan is among those who have reported on this; though being a secret agreement, where those USA job losses will hit is unknown to the general public. If a job loss can be tied to TPP, then job training money will flow (not that the jobs will actually exist).

    Naturally, President Obama and his Totalitarian Socialist Party allies and teachers unions would like to see all that money flow into the government-supported public schools. So, private trade schools like the over 100-year old Corinthian had to be eliminated so that the money flow would be to the government schools (whose job placement record is worse than Corinthian; but facts matter little). It was a vast political conspiracy, and the private schools trade association making the case for the political nature of all this was totally ignored by both so-called alternative and MSM.

    None of the headline stories in today’s news do more than repeat tired propaganda memes. But I suggest looking more closely at Wyo-tech and Everest, which were doing a better job than the public schools at placing people into industries like trucking (ignored by the public schools). San Jose, California, newspaper detailed how California attorney general (will be next California Senator) prevented these students from even finishing the last few months of their training (as if letting the schools close out the terms would be so bad). Students were not really considered, though propaganda says it was too protect the students. Nanny State Uber Allis.

    • Sabbie

      You’re on the right track, except for the fact that every President since Kennedy has been in on the scam.

      • Joelg

        The Corinthian story is the Media Propaganda Machine in top form. Corinthian is being made into a scapegoat or villain to be whipped and flogged in public. Corinthian was better than the Atlanta school district which was caught cheating on test scores to get federal government money, and you did not have a conspiracy of federal government agencies and state attorney generals move to shutdown the substandard Atlanta school district. The cognitive dissonance among so-called “free market” people cheering on the Government Monopoly is beyond deafening.

        It was fines and regulation from 30 different government agencies that put Corinthian into bankruptcy. Regulatory compliance costs exceeded the funds available to educate students. That was the heart of the government conspiracy, and a time-honored tactic. Of course, Corinthian’s basic business model was severely flawed in being 90% dependent on student loan money via USA.gov. So, all the Obama administration had to do was withhold dispersing already approved student loan funds (which it did), and it was bye-bye Corinthian. Students were the big losers, as they are not allowed to go bankrupt and must pay back the loans even though their school was closed (and, of course, the Corinthian course credits are not transferable to other schools).

        Keynes (the monetary theorist) saved the Oxford colleges in Britain from a Corinthian fate by using his stock market genius to invest their funds and leave them with a great private endowment. So, the colleges helped by Keynes did not need to feed at the government Pork Barrel, which is where all the pigs (both public and private) go to feed because it is where the big money is.

  • Bill Ross

    When this inevitably happens to “higher” institutions of legal “education”, then, I shall revel in the irony / karma.

    but not so much as seeing the entire legal “profession” unemployed, and, upon peril to life afraid to admit what they did (and didn’t do) before the crash.

  • FreeOregon

    Even Princeton and Harvard depend on government funding, for student tuition and for research and development funds.

    What would a business look like if it refused to accept government contracts, government research money, government subsidies?

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