Neoliberalism Killed 346 People Aboard the Boeing 737 MAX 8

What was left of Ethiopian Airlines Flight 302, a Boeing 737 MAX 8 jet, after it crashed to the ground six minutes after takeoff. All 157 people aboard were killed (source)

by Thomas Neuburger

The essence of modern neoliberalism, as encouraged and enabled by both political parties, is the Ayn Randian notion that the greatest amount of freedom in the world should be given to capital — that the giant pool of money should be allowed to flow unrestrained into any country it wishes, seek whatever profit it wishes to seek, then flow out, again unrestrained, leaving in its wake whatever wreck it wishes to walk away from.

The poster child for neoliberal profit-seeking is, of course, NAFTA and its legacy of devastated lives in every country touched by it, but there are more examples than anyone could count. This devastation has been going on for decades, starting in my own memory with Ronald Reagan's permitted transfer of the U.S. semiconductor manufacturing industry to Asia. (Reagan "earned" two million dollars in speaking fees during a fully paid eight-day grand-tour trip to that country within a year of leaving office — clearly "thank you" money for his many gifts to the suddenly swollen wealth of Japan.)

Since the age of greed was kicked off in the 1980s, and because in those years Americans were taught to love their predators (remember breathless praise of shows like Lifestyles of the Rich and Famous), the pursuit of profit by the few at the expense of the lives of the many has only accelerated.

The latest instance of this destructive pursuit is the story of the Boeing 737 MAX 8 jet. There are many parts to the 737 MAX 8 story. This part takes us, once again, to U.S. outsourcing to Asia and $9/hour software engineers in India.

From Bloomberg:

Boeing's 737 Max Software Outsourced to $9-an-Hour Engineers

• Planemaker and suppliers used lower-paid temporary workers
• Engineers feared the practice meant code wasn’t done right

It remains the mystery at the heart of Boeing Co.’s 737 Max crisis: how a company renowned for meticulous design made seemingly basic software mistakes leading to a pair of deadly crashes. Longtime Boeing engineers say the effort was complicated by a push to outsource work to lower-paid contractors.

The Max software -- plagued by issues that could keep the planes grounded months longer after U.S. regulators this week revealed a new flaw -- was developed at a time Boeing was laying off experienced engineers and pressing suppliers to cut costs.

Increasingly, the iconic American planemaker and its subcontractors have relied on temporary workers making as little as $9 an hour to develop and test software, often from countries lacking a deep background in aerospace -- notably India.

According to Mark Rabin, a former Boeing engineer whose work supported the 737 MAX project, the decision to outsource coding to India “was controversial because it was far less efficient than Boeing engineers just writing the code. I took many rounds going back and forth because the code was not done correctly.”

But outsourced U.S. jobs and greatly reduced wage costs were not the only benefits to Boeing from this decision. The company was also rewarded handsomely for it, winning, according to Bloomberg, "several orders for Indian military and commercial aircraft, such as a $22 billion one in January 2017 to supply SpiceJet Ltd. That order included 100 737-Max 8 jets and represented Boeing’s largest order ever from an Indian airline, a coup in a country dominated by Airbus."

Needless to say, in a nation dominated by neoliberal thinking and morality, more than $22 billion in new contracts easily offsets the loss of 346 lives in the two 737 MAX crashes, each of which killed everyone on board.

In a nation that abhors neoliberal morality, on the other hand, one would see trials for manslaughter instead.
 

Did Trump Cause The Plane Crash In Ethiopia? No... But It's His Fault

For anyone who thinks Maddow is only good for explaining complicated Putin-Gate conspiracy theories and related judicial developments, the video above is one of her best-ever segments... and unrelated to Putin-Gate. This is Maddow at her very best-- and probably started a ball rolling that put enough pressure on Trump for him to order the grounding of the Boeing 737 Max 8 jets "immediately." Key points about the two crashes of the Boeing 737 MAX 8:

• American pilots have been "describing the same sort of difficulty on take-off, the same specific problem where they are ascending after take off, rising towards the cursing altitude when something in the automated systems in that plane basically takes over and pulls the nose down."
• Although most other countries have banned the Boeing 737 MAX 8, our FAA issued a statement: "This far, our review shows no systemic performance issues and provides no basis to order grounding the aircraft."
• This could happen at anytime and "it just makes you wish and hope and pray for competency and capacity in the leadership you've got that has to deal with a crisis like this at all levels. This is the sort of thing that makes you want really good, really smart, really qualified people in place-- when a crisis like this arises. With this particular crisis happening now, at this point in our country, of course, we have some novel concerns right now in our country that we might not necessarily have with any other president in place... For example-- that statement from the FAA today, saying everything's fine as far as they can tell... no need to worry... That statement was put out in the name of the acting FAA administrator, Daniel K. Elwell... Why do we still have an acting FAA Administrator? ... President Trump had wanted to install as the Administrator of the FAA [a year ago] his own personal pilot, the guy who flies the Trump plane. Not Air Force One-- no, the one that says "Trump" on it.
• "Boeing has, in the works, a software fix that they believe will address that problem in these planes... a way to fix the accidental nose-dive problem... The fix had been expected early in January... U.S. officials have said that the federal government's recent shutdown also halted the work on the fix entirely for 5 weeks."

So why is this important? Is a picture still worth a thousand words? How about two-thousand with a caption? Or one-thousand five hundred words if the caption is in French?

This is how presidential candidate Marianne Williamson addressed the Boeing scandal in a note to her supporters this afternoon:

Question: Why was America the slowest, and most reluctant of the planet’s most advanced nations to ground their potentially dangerous fleet of Boeing Max 8's?

Answer: Because last year alone Boeing spent 15 million dollars and hired more than a dozen firms to lobby the government, to the point where the FAA now serves Boeing’s interests before it serves ours.

This is how our country operates now in situation after situation: the powers of our government are used to advocate for corporate profits more than for the people or planet on which we live.

And that is morally wrong.

The FAA seeking first to protect Boeing was not an isolated incident, but rather an example of how a corporatocracy operates. It is not just the FAA playing footsies with Boeing. The Department of Defense (DOD) acts at the bidding of the top five Defense Contractors, who hire one quarter of departing DOD employees every year. And of course the FDA shills for opioid-pushing pharmaceutical companies like Purdue, when these companies pay 45% of the FDA’s budget.

What are we to call this? There’s only one word for it, and that’s corruption. The nefarious influence of unlimited corporate money allowed to flood our political system has created a system of “dark money” that literally imperils the safety of our food, the safety of our environment, the safety of our health care, and even the safety of our skies.

Government “of the people by the people and for the people” has become a “government of, by, and for” the major corporate conglomerates whose money and influence dominate Washington.

And they do not just dominate Washington, I’m afraid. They dominate too often state legislatures and Governor’s mansions as well-- cutting educational funding, compromising safety standards for workers, lowering food and environmental standards, even seeking to suppress the votes of people who might rise up against this. All of this for the sake of an outdated, obsolete and increasingly dangerous economic ideology that turned America into a veiled aristocratic system, in which we steal from the many in order to bolster the profits of a very few.

We cannot function as both a corporatocracy and a democracy at the same time; we must choose between the two. Let’s become a generation of Americans who saw our country get way too close to the cliff, and then pulled it back. In fact, let’s get out of the vicinity of the cliff altogether. Let’s return the power of the United States government to the hands of, and placed at the service of, we the people to whom it belongs.

As citizens, we must rise up. We must not allow ourselves to be in denial about any of this, or distract ourselves from our responsibility as citizens to put our country back on track.

Take Trump Out Of The Equation-- Would His Tariffs Be As Bad As They Seem With Him Running The Show?


Many Republicans seem more aggressively opposed to Trump's protectionist plans-- the steel and aluminum tariffs-- than quite a few Democrats. Thursday night, Chris Hayes had iron worker and progressive candidate Randy Bryce and DEMOS Action president Heather McGee on his MSNBC show to discuss the tariffs. Bryce's Republican opponent, Paul Ryan, has come out against the tariffs. Bryce agreed that protecting American industry and jobs have the potential to be good policy-- but not the way Trump is going about it. Meanwhile corporate Democrats are pretty much on the same page as Republicans on the issue and labor Democrats and most progressives support an overall trade policy that works for workers rather than just CEOs and Trump's reelection strategy, as Bryce and McGee explained to Hayes Thursday.

And there is another prism to look at this through. The Open Markets Institute offered a perpsective worth considering: "How Tariffs Can Breed Monopoly-- The Sad Lession Lessons Of Trump-Style Protectionism."

President Trump’s decision to impose big tariffs on steel and aluminum was met with outrage in most of Washington, and even in his own administration. But most onlookers missed another recent story that helps illustrate the potential unintended effects of poorly thought-out tariffs. This was Boeing’s effort late last year to get the Administration to impose a nearly 300% levy on jets built by Canada’s Bombardier. Even though those tariffs never took effect, the clumsiness of the plan cost Boeing big business and drove even greater concentration in the near-monopoly business of making airliners.

For the last generation, most Washington insiders have painted tariffs as selfish protectionism for workers in obsolete jobs and manufacturers too lazy or incompetent to compete with foreign manufacturers. But as Open Markets has written elsewhere, tariffs play an essential role in any coherent national anti-monopoly policy. Tariffs are what a nation uses to protect itself against predatory foreign monopolies and dangerous dependencies for vital goods. In America, this has been true since the Declaration of Independence, which aimed to break Americans free of the British system of trading monopolies (such as the British East India Company).

This Boeing tariff story began in 2016, when U.S. airline Delta ordered 75 C-Series commercial jetliners from Bombardier. Even though the C-Series competes only with the very smallest version of Boeing’s 737, the manufacturer argued that the Canadian government had unfairly subsidized Bombardier and asked Washington to retaliate. In late September and early October of 2017, the Commerce Department recommended imposing two different tariffs on C-Series planes, which together amounted to almost 300% of the base cost.

The move disrupted a delicate competitive balance that has been in place since Boeing bought its last U.S. rival McDonnell Douglas in 1997. Ever since, two transnational corporations, Boeing and Airbus, have manufactured all large jets, including all trans-oceanic airliners. Bombardier and Brazil’s Embraer, by contrast, have focused on building “regional” jets that hold fewer passengers and travel shorter distances. All four are heavily subsidized by their respective states. In the case of Boeing, the subsidies come largely from defense industry contracts.

It is the interaction of tariff policy with these subsidies, and not tariff policy alone, that structures the aerospace industry. In this instance, it was almost immediately clear the tariff had a big, unintended effect. By October, Bombardier had run into the arms of Boeing's arch-rival, Airbus. Practically, this came in the form of a promise by Airbus to partner with Bombardier to sell the C-Series plane, and to build those jets in a factory in Alabama, where they could avoid any potential tariff. Then in December, the Canadian government canceled a $5.2 billion deal to buy fighter jets from Boeing. All of these moves undermined Boeing's original plan to grab business from Bombardier by using the tariff weapon.

The final evidence that Boeing's gambit had backfired came January 26 when the U.S. International Trade Commission blocked the proposed tariffs. But the damage of the original decision had already been done. The last act in this period of monopolization in airline manufacturing came only last week, when Embraer, suddenly alone in the world of regional jets, sought protection from Boeing—and the U.S. government—by selling a 51% stake in its commercial jet business to its larger American rival.

The concentration of four manufacturers into a quasi-duopoly will have a number of effects, none good. They include:

  • Higher prices for airliners, especially the regional jets that serve second-tier cities.

  • Less and slower innovation in airline technology, as the number of engineering teams and potential pathways for new ideas is reduced from four to two.

  • Less bargaining power for the suppliers of aerospace component parts that sell to Boeing/Airbus, and less bargaining power for engineers and workers who make airplanes.

  • A stripping out and consolidation of the aerospace supplier system, including for highly advanced components like engines and advanced materials.

This last factor will likely prove important at a time when U.S. military competition with China is heating up. Administrations from the end of WWII into the 1990s understood that a strong and diversified domestic commercial production system was vital to ensure the supply of advanced weaponry at reasonable prices. By contrast, they understood that monopolists tended to both degrade the quality of components while simultaneously jacking up prices, as the recent TransDigm pricing scandal well illustrates.

The Trump Administration is not wrong to hold that China and other trading partners are unfairly protecting their own steel and aluminum industries in ways that harm American prosperity and national security. But if the Administration and/or Congress want to do something to actually fix the problem, this must include addressing the deep pro-monopoly bias built into the architecture of the World Trade Organization in the 1990s, and creating a well-funded team of strategists to devise more sophisticated approaches to protecting the industrial security of the United States.

JOHN W. McCAIN'S ECONOMIC AGENDA IN THIRTY SECONDS

For several months DWT has been trying to make it clear that McCain's campaign is being run by a pack of lobbyists, at least 166 of them, and that they are taking gigantic amounts of money from unsavory characters and governments, much of it possibly skirting laws that prevent, foreign governments-- in this case Saudi Arabia, shady Eastern European regimes and Communist China, as well as the Russian Mafia-- from influencing American elections. The problem McCain has with people concerned about outsourcing and shipping American jobs overseas was viscerally highlighted this winter when McCain lobbyist/staffers persuaded him to kill a Boeing bid worth $100 billion in favor of a European company. McCain received more bribes contributions from that European company's executives than any other American politician. Their bribes paid off. That's a lot of lost American jobs. A video I found at Clean Money Clean Elections today illustrates the entire complex issue in 30 seconds. It's worth taking a look: