Fascist Corporatist Temptations

The fastest way to get rich is to persuade your friends in the U.S. government that you are selling them a strategic asset.

A friend and supporter of this newsletter just sent me a report “that the Trump administration is reportedly negotiating to turn Intel’s $10.9 billion CHIPS Act subsidies into a 10 percent equity stake in the company.” If finalized, Washington would be among Intel’s largest shareholders.

Reporter Vance Ginn at the Daily Economy does a fine job of enumerating why this is a bad idea for U.S. citizens and taxpayers, and I recommend reading his report.

The contemplated U.S.-Intel deal is, it seems to me, an example of yielding to the siren song of Fascist Corporatism.

Nowadays, we think of “Fascism” as a doctrine exemplified by the German police and military state during the Third Reich. However, the roots of this doctrine lie in the writings of the Italian philosopher, Giovanni Gentile, who postulated that the optimal political and economic system is akin to a Merger of State and Corporate Power.

Gentile postulated that this was not only a doctrine of great economic utility, but also the best arrangement for promoting the moral and spiritual health of the modern nation state.

Gentile was probably being sincere when he theorized about this. Nowadays, the primary temptation of Corporatism lies not in its purported utility for forging a strong national identity and allegiance, but in its utility for clever and ambitious money-grubbers.

During the pandemic, we saw companies like Pfizer and Moderna form a symbiotic relationship with officers of various U.S. government agencies, including the Department of Defense — so symbiotic that it became very difficult to delineate the corporations from the U.S. government agencies that extravagantly supported them.

Since the rise of the Military-Industrial Complex during the 1940s and 50s, U.S. industrial corporations have been inextricably linked to U.S. government agencies. To give just one of many examples, Robert McNamara began his career in the military working for General Curtis LeMay. Later he worked for the Ford Motor Company and ultimately became its president, and then he became the Secretary of Defense for Kennedy and Johnson.

Senior officers and directors of the industrial services company, Brown & Root, were key supporters of Lyndon Johnson’s political career, and he rewarded the company handsomely after escalating the war in Vietnam, thereby helping the company to win the moniker “Burn & Loot.”

Donald Rumseld and Dick Cheney enjoyed similar careers, moving back and forth between the private and public sectors. Shortly before Cheney became a key figure in America’s Iraq War fiasco, he was the CEO of Halliburton, whose stock price enjoyed a 5X return between March 2003 and June 2008.

During the bird flu scare of 2005, President Bush asked Congress to allocate $7 billion in emergency funding to prepare for the possibility of the bird flu mutating into a human epidemic. He specifically asked for $1 billion to be allocated for the purchase of Tamiflu, jointly developed by Gilead Sciences and Roche. It just so happened that Defense Secretary Donald Rumsfeld was a major shareholder who made millions from the trade.

All of these clever and ambitious money-grubbers teach us that fastest way to get rich is to persuade the U.S. government that you are selling a strategic asset.

2005 was a windfall year for the Bio-Pharmaceutical Complex, whose lobbyists worked closely with the Bush Administration to pass the PREP Act. This radical piece of legislation has served as a key instrument for giving U.S. government agencies emergency power and for enriching the pharmaceutical industry in the event of a pandemic—real, perceived, exaggerated, or fabricated.

One of the most powerful supporters of Theranos—the fraudulent blood testing company started by Elizabeth Holmes—was former Secretary of State, George Schultz. He still had cronies in the Pentagon who were keen to purchase Holmes’s bogus machines for the military.

During the COVID-19 pandemic, we saw the blossoming of similar cozy relationships. FDA Commissioner Dr. Scott Gottlieb was appointed to Pfizer’s Board of Directors shortly after he left the agency. Likewise, six months after he gave approval to Moderna’s new COVID-19 vaccine, FDA Commissioner Dr. Stephen Hahn was offered a position at the venture capital firm that was one of Moderna’s primary backers. Among major media players, Jim Smith, the CEO of Reuters, was appointed to Pfizer’s Board of Directors in 2014 and is also on the international business council of the World Economic Forum.

Moncef Slaoui was head of vaccine development at GlaxoSmithKline until 2017. At the time President Trump appointed him to lead Operation Warp Speed, he was a board member of both CEPI and Moderna, a primary candidate for Warp Speed funds. Though he resigned from the Moderna board to avoid a conflict of interest, he retained his stock options, which gained $2.4 million in value on the day the company announced favorable preliminary results of its Phase I trials. This raised concerns about his neutrality in judging its vaccine’s safety and efficacy data, so he agreed to divest his shares of Moderna stock.

Like Krupp and I.G. Farben during the Third Reich, U.S. corporations are bound to U.S. government institutions like the DoD, DARPA, NIH, HHS, and BARDA in an arrangement that strongly resembles Fascist Corporatism.

It seems to me that in trying to understand these relationships, it is useful to consider President Eisenhower’s Farewell Address in 1961. His warning to Americans about the rise of the Military-Industrial Complex is now more relevant than ever, and all Americans should be throughly acquainted with this speech.