Table of Contents
What is Profiteering?
Profiteering refers to the act of seeking excessive profits through unethical methods.
One particularly contentious example of profiteering is payday loans. While not exactly defined, payday loans typically refer to short-term, high-interest loans due on the borrower’s next payday. The dispute comes down to whether payday loan agencies actually make undue profits due to their high-interest rates. Some evidence suggests they do, other evidence shows a narrow profit margin.
The Zero Theft Movement is dedicated to eliminating the rigged parts of the U.S. economy in order for the healthy, ethical parts to thrive. Profiteering could be one way in which corrupt businesses and individuals attempt to unethically maximize their profits at our expense, especially during times of crisis.
Megacorporations and their lobbyists could be heavily influencing regulation and legislation. Protect our politics and economy by joining the Zero Theft Movement.
The news of the COVID-19 pandemic and the consequent lockdowns caused panic buying and profiteering. As mentioned in the introduction, profiteering often happens during times of crisis. When there are sudden supply or demand shocks.
Profiteers view the turmoil as an opportunity to turn a profit, ethical or not.
Hand sanitizers, masks, and TP
Recent cases of price gouging have emerged during the COVID-19 pandemic. For example, the cost of hand sanitizer reportedly shot up by 53% at one point. NBC News ran a story detailing how a New York Attorney General had fined three Amazon sellers for their hand sanitizer price hikes. The news report states, “Northwest-Lux charged Amazon shoppers $79.99 to $129.99 for 2-liter bottles of Purell, which are typically priced between $20.87 to $35.00, the attorney general’s office said.”
From Iowa Senator @ChuckGrassley on Twitter: “Beef is flying off grocery shelves but farmers are seeing prices go down if packers are illegally manipulating markets during the crisis we need USDA & DOJ & CFTC to investigate + help farmers. 4 companies control 80% of market & they’re taking advantage.”
In essence, Senator Grassley claims that the oligopoly in the beef packing market has allowed those 4 unnamed companies to fix prices.
While meat processors reported record highs, cattle ranchers were hemorrhaging money during the pandemic. 19 Senators grouped together to send an investigation request to the Department of Justice in May 2020, writing: “Since February, we have seen live cattle prices slump by more than 18 percent, while wholesale beef prices have increased by as much as 115 percent during the same period.”
The DOJ has reportedly broadened its investigation to the whole supply chain for beef, chicken, and pork.
The rich get richer
Numerous organizations (e.g. NPR, The Conversation, Oxfam, etc.) have raised concerns about the growing wage gap between most citizens and ‘pandemic profiteers,’ the billionaires who have made even more billions during the global health crisis.
According to Inequality.org, “After 11 months of pandemic misery, where millions have lost their jobs, health and wealth, total US billionaire wealth increased $1.3 trillion since mid-March, 2020, an increase of 44 percent.”
If you’re curious, Americans for Tax Fairness has created a list of the top earners.
The issue of economic inequality, of course, goes well beyond U.S. borders. The United Nations Secretary-General, in April 2021, claimed that while the wealth of the world’s richest individuals has surged by $5 trillion, there have been 3 million deaths, increasing infections, the worst recession in 90 years, 120 million people falling back into extreme poverty, and the equivalent of 255 million full-time jobs lost.
The Politics of Defense Contracts and War Profiteering
“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist.”
President Dwight Eisenhower, from his farewell address
War profiteers make exorbitant profits by charging unreasonable prices on items during wartime or through government contracts.
In the U.S., war profiteering dates all the way back to the American Revolution. Citizens started numerous food riots against profiteering merchants who hiked up prices on their goods. An angry mob of Boston women, in 1777, famously accosted the merchant Thomas Boylston, demanding he lower his coffee prices. He refused, so the women took his stock.
Unfortunately, war profiteering appears to have remained a constant all the way to the present day U.S. Perhaps now, even more, dangerous than ever before as many believe profiteering has become a systemic problem involving the military, defense industry, and politicians.
In 2019, Congress raised concerns about war profiteering rampant in U.S. relief and reconstruction efforts in Iran and Afghanistan. A House hearing states, “The United States…devoted more than $50 billion to relief and reconstruction activities in Iraq and Afghanistan, and…inspectors general…have reported that millions of these dollars still are unaccounted for. Millions may have been lost to fraud and other misconduct, and these inspectors general have opened hundreds of investigations into fraud, waste, and abuse in Iraq, Kuwait, and Afghanistan involving illegal kickbacks, bid rigging, embezzlement, and fraudulent overbilling.
President Eisenhower, during his final address quoted in part above, warned Americans of this union, referring to it as the ‘military-industrial complex’ (MIC). Sometimes that term has been extended to the military-industrial-congressional complex (MICC) to form an iron triangle.
In the MICC, defense contractors would be the defense contractors, and the bureaucracy the U.S. military
Ubernetizen at en.Wikipedia.) (Uploads / Later version(s) were uploaded by Helicon at en.Wikipedia., Public domain, via Wikimedia Commons
DID YOU KNOW?
According to Bloomberg, the U.S. spent $681 billion total on government contracts. $445 billion of that total spend went to defense contracts.
Potential Real World Examples of MICC Profiteering
At its worst, weapons manufacturers might try to boost business and profits by influencing government officials to go to war.
Raytheon & Mark Espers
The logo for Raytheon, one of the largest weapons manufacturers in the world
The government instituted ethics laws to help jam the revolving door (where industry lobbyists essentially switch roles with regulators and legislators). However, in early 2020, the Department of Defense, led by a former Raytheon lobbyist and then-U.S. Secretary of Defense Mark Espers, submitted a legislative proposal that would have eliminated a key ethics law.
That ethics law alluded to above establishes a two-year ‘cooling-off period’ for senior officials, where senior government workers who were once lobbyists cannot involve themselves in any kind of behind-the-scenes lobbying activity.
According to a POGO article, “The new proposal would remove the cooling-off period for behind-the-scenes work for certain senior defense officials, preserving the defense industry’s unfettered access to the Pentagon’s decisions about what to buy, how much to spend, and where to go to war.”
The Technology CEO Council, formed by chief executives from Motorola, Dell, and Intel, published a report in October 2010 on inefficiencies in government contracting supply chains. The council estimated potential savings over ten years could exceed $700 billion, given the streamlining of the supply chain and the elimination of fraud.
If the government does not put in an effort to streamline their contracting supply chains, are they ripping off the public?
The Cunningham Scandal
Randall Harold “Duke” Cunningham, former California Congressman, received an 8-year jail sentence after pleading guilty in his 2005 bribery case, according to a report by the New York Times.
Congressman Randy “Duke” Cunningham at TOPGUN, 1992.
Wangtopgun at en.Wikipedia, CC BY-SA 3.0 via Wikimedia Commons
The Department of Justice press release, which we have excerpted below, details the copious evidence found against Cunningham:
“…[He] admitted that he received at least $2.4 million in bribes. These bribes were paid to Cunningham by several co-conspirators through a variety of methods, including checks totaling over $1 million, cash, rugs, antiques, furniture, yacht club fees, boat repairs, moving costs, and vacation expenses.
The bribery, fraud, and tax evasion conspiracy described in the Information included: the purchase of Cunningham’s home in Del Mar, California, at an artificially inflated price by a defense contractor; the subsequent payoff of the mortgage on Cunningham’s new, multi-million dollar home in Rancho Santa Fe by another defense contractor; a $200,000 down payment by a third coconspirator to enable Cunningham to purchase a condominium in Arlington, Virginia; the payment of the capital gains tax by the purchaser of Cunningham’s Del Mar home; the purchase and maintenance by a defense contractor of a yacht (the “DukeStir”) and a Rolls Royce for Cunningham; as well as payments by a defense contractor for a graduation party for Cunningham’s daughter, jewelry, home furnishings, and travel and hotel expenses.
Cunningham failed to disclose any of the benefits on his Financial Disclosure Statements to the U.S. House of Representatives or on his federal tax return. Cunningham further admitted that in return for these bribes he used his public office and took other official action to influence the appropriations of funds and the execution of government contracts in ways that would benefit two of the co-conspirators, who were the majority owners of defense contracting companies.
War Profiteers Writing Their Own Rules?In 2015, Politico alleged that arms makers had written their own rules in the Agile Acquisition bill. The magazine quotes an interview with Will Goodman, a former Senate aide who’d become the VP of policy at the National Defense Industrial Association: “There were, literally, 10 provisions of Chairman Thornberry’s Agile Acquisition bill that had some kind of direct or indirect lineage from our recommendations…They were tightly aligned and in some cases were word-for-word adaptations.” The Politico article discusses how provisions in the Agile Acquisition bill could boost defense industry profits at the expense of taxpayers. It points to how the bill would allegedly “weaken the power of Pentagon’s chief weapons tester…who often uncovers flaws in big-ticket weapon systems.”
According to political watchdog OpenSecrets, “Nearly 530 people have worked for both a member of one of the six main defense-related committees and as a lobbyist for defense companies. Some staffers straddle both groups, working for both the committee and a member of the committee, not infrequently at the same time.”
The defense industry seemingly has representatives throughout the government. So if many of the trusted experts the government relies upon have ties to weapons manufacturers, then it’s no mystery why the latter’s interests would be prioritized.
How YOU Can Prevent Profiteering
When it comes to the war and defense industry profiteering, we’re talking about hundreds of billions of taxpayer dollars in contracts every year. If we truly have a MICC iron triangle, then how can we expect the corrupt among our legislators and regulators to protect our best interests?
At its very worst, the consequences of profiteering extend far beyond money. War causes incalculable suffering to so many. Soldiers, innocent civilians, livelihoods, homes.
And for what? A buck?
Stopping profiteering takes a vigilant public, holding government officials accountable starting from the allocation of the government’s resources. You might have felt like you did not have enough of a voice to raise concerns to government officials, but we at the Zero Theft Movement have provided the platform to amplify the sentiments of the public.
The Zero Theft Movement, along with our growing community, work together to calculate the best estimate for the monetary costs of corruption in the U.S. Corporate, political, and everything in between.
We have built a safe and independent platform where you and your fellow citizens work together to investigate and debate potentially rigged areas across the economy. Through blockchain voting, the way to make all your work permanent, public, and unchangeable, you decide whether (1) theft is or isn’t occurring in a specific area of the economy, and (2) how much is being stolen or possibly saved. Through direct democracy, we can collectively decide where the problem areas are and start working on addressing them systematically.
The ZTM community knows that many businesses, including some corporations, act ethically. We are trying to hold the bad actors accountable. The corrupt corporations, lobbyists, and government officials. That way, good people and businesses can properly thrive and enjoy the piece of the pie we’re all due.
The Zero Theft Movement does not have any interest in partisan politics/competition or attacking/defending one side. We seek to eradicate theft from the U.S economy. In other words, how the wealthy and powerful rig the system to steal money from us, the everyday citizen. We need to collectively fight against crony capitalism in order for us to all profit from an ethical economy.
Terms like ‘steal,’ ‘theft,’ and ‘crime’ will frequently appear throughout the article. Zero Theft will NOT adhere strictly to the legal definitions of these terms (since congress sells out). We have broadly and openly defined terms like ‘steal’ and ‘theft’ to refer to the rigged economy and other debated unethical acts that can cause citizens to lose out on money they deserve to keep.