Merger Mania

From computer giants to the world's biggest oil companies, merger has become the favorite sport of the world's corporate and financial elites. Whether it's the information age giants like Netscape and America Online, or the industrial age behemoths like Exxon and Mobil, those who run the economy agree on one thing—bigger is better. What's wrong with this picture?

With Exxon's purchase of Mobil, creating a new company that is the biggest and richest in the world, the historic antitrust victory of 1911 that broke up the oil empire of John D. Rockefeller has been reversed.

Costs must be cut, say the new company's executives. What's the easiest way to do that? Cut more jobs. An estimated 10,000 workers will be sacrificed as a result of the Exxon-Mobil merger. But those workers are not alone in facing the prospect of losing their livelihoods. The list of companies whose reorganizations and cost cutting are causing layoffs is long. Boeing is cutting 48,000 jobs due to the Asian financial crisis. And who precipitated that? It certainly wasn't the workers who are losing their jobs, but financial investors whose greed got a little ahead of their common sense.

Let's take a look at some of the recurring facts of our economic life: Mergers are in, with new consolidations occurring every day. The new super-companies are slashing costs, with job layoffs the favorite tactic. Virtually every time jobs are cut, the value of the companies goes up—and the salaries of top executives are likely to go up as well.

Now consider the moral dimension of these economic realities. I know the stock market is not supposed to be judged by moral standards. The market is the great given—it's just what is. But do we really want to live that way? Few things impact our lives more than the economy—just ask all those folks who are losing their jobs.

So why do we continue to exempt economic behavior from moral scrutiny? Catholic social teaching has a useful concept known as "the common good." Individual benefits are not enough to evaluate a society or its practices. Rather, according to this line of thinking, we need to be looking after the needs of the whole community, especially those who most easily are left behind. That's the common good.

BUT WHO IS LOOKING after the common good in the Exxon/Mobil merger? Can anybody seriously suggest that bigger, more powerful, and more profitable corporations will help to protect the interests of workers, consumers, the environment, local communities, and the forgotten poor? Is it right that the casino economy of Wall Street profits when the real economy of workers and their families suffers? Is it fair that the people who do the firing get a raise, while the people fired can only fear for the future of their families? But "right" and "fair" are not words that the market economy wants to bring into the conversation.

A little moral scrutiny puts raw numbers and naked power into a more human perspective: Thirty years ago, CEOs made about 30 times what their entry-level employees made; today the ratio is 230 times the paycheck of an entry-level worker. The United Nations reports that the amount of money it would take to provide the clean drinking water, health care, food, and education to eliminate global poverty is roughly equivalent to the wealth of the world's seven richest men. Time magazine reported this fall that the enormous tax benefits and subsidies exacted by American corporations that promised jobs have been wasted; the jobs haven't materialized. The combined salaries offered to 70 free-agent baseball players this fall amount to $1.3 billion. How far would that go to rebuild the Central American countries devastated by Hurricane Mitch?

The growing economic inequality of American life presents the most crucial moral issue for the health of democracy, according to historian James MacGregor Burns. It's an issue that affects almost every other issue, from campaign finance to corporate welfare to the daily priorities of the U.S. Congress. The widening gap between the top and bottom of American society is now the 900-pound gorilla lurking in the background of every political discussion. It's just sitting there, but nobody is talking about it. It's time we started talking about it. Our moral integrity demands it. And the common good requires it.

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