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The Big Things That Matter And The Little Things That Annoy

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I write about major problems: the collapsing US economy, wars based on lies and deception, the police state based on "the war on terror" and other fabrications such as those orchestrated by corrupt police and prosecutors, who boost their performance reports by convicting the innocent, and so on. America is a very distressing place. The fact that so many Americans are taken in by the lies told by "their" government makes America all the more depressing.

Often, however, it is small annoyances that waste Americans' time and drive up blood pressures. One of the worst things that ever happened to Americans was the breakup of the AT&T telephone monopoly. As Assistant Secretary of the US Treasury in 1981, if 150 percent of my time and energy had not been required to cure stagflation in the face of opposition from Wall Street and Fed Chairman Paul Volcker, I might have been able to prevent the destruction of the best communications service in the world, and one that was very inexpensive to
customers.

The assistant attorney general in charge of the "anti-trust case" against AT&T called me to ask if Treasury had an interest in how the case was resolved. I went to Treasury Secretary Don Regan and told him that although my conservative and libertarian friends thought that the breakup of AT&T was a great idea, their opinion was based entirely in ideology and that the practical effect would not be good for widows and orphans who had a blue chip stock to see them through life or for communications customers, as deregulated communications would give the multiple communications corporations different interests than those of the customers. Under the regulated regime, AT&T was allowed a reasonable rate of return on its investment and, to stay out of trouble with regulators, AT&T provided excellent and inexpensive service.

Secretary Regan reminded me of my memo to him detailing that Treasury was going to have a hard time getting President Reagan's economic program, directed at curing the stagflation that had wrecked President Carter's presidency, out of the Reagan administration. The budget director, David Stockman, and his chief economist, Larry Kudlow, had lined up against it, following the wishes of Wall Street, and the White House Chief of Staff James Baker and his deputy Richard Darman were representatives of VP George H.W. Bush and did not want substantial Reagan success that would again threaten the Republican Establishment's hold over the party. Baker and Darman wanted to be sure that George H. W. Bush and not Jack Kemp succeeded Ronald Reagan, and that required a muted Reagan success that they could claim as theirs for moderating an "extremist" program.

I told Secretary Regan that if I had another deputy assistant secretary, I could reach a reasonable conclusion whether the breakup of AT&T was sensible. He replied that he was sure that was the case, but that once I had three deputies the headlines in the Washington Post and New York Times, Business Week, Newsweek, and so on, would be: "Supply-sider builds empire at Treasury." He said it would sink me and that without me he could not get the President's economic program out of the President's administration. "Which do you want to do," he asked, "save AT&T or cure stagflation?"

Curing stagflation gave America 20 more years. Ironically, the good times started to erode when Reagan's other goal was accomplished and the Soviet Union dissolved in 1990. "The end of history" resulted in India and China opening their labor markets to American capitalists, who began producing offshore with foreign labor the products that they sold to Americans. The labor costs savings pushed up corporate profits, shareholders' returns, and managerial bonuses. But it deprived Americans of middle class incomes and wrecked the balance of trade. The US income distribution and the trade deficit worsened.


Many progressives blame the worsening income distribution on the Reagan tax rate reductions, but the real cause is the offshoring of manufacturing industrial, and professional service jobs, such as software engineering.

None of us in the Reagan administration foresaw jobs offshoring as the consequence of the Soviet collapse. We had no idea that, by bringing down the Soviet Union, we would be bringing down America. During the Reagan years India was socialist and would not allow foreign corporations, had they been interested, to touch their labor force. China was communist and no
foreign capital could enter the country.

However, once the Soviet Union was gone from the earth, the remaining socialist and communist regimes decided to go with the winners. They opened to Western corporations and sucked jobs out of the developed West.

But this is a different story. To get back to deregulation, nothing has worked for the consumer since deregulation. Deregulation permitted corporations to impose their costs of operation on
customers without having to send them a bill. For example, corporations use
voice recognition technology to keep customers from salaried customer representatives. I remember when a customer with a problem could call a utility company or bank and have the problem immediately corrected.

No more. There was an error in my phone bill today, which I had corrected without result on two previous occasions. As everyone knows by now, it takes 10-15 minutes, usually, to get a live person who can actually fix the problem. After listening to sales pitches for 12 minutes, I got a live person. Once the problem was understood, it was pronounced to be an upper-level problem out of his hands. I waited another 10 minutes while he tried to reach a superior who had the code to fix the problem that the phone company had produced in my account. The entire time I listened to product advertisements.

How many times has this happened to you?

Whoever invented these artificial voice capabilities is the enemy of mankind. Whomever a customer calls -- utilities, credit card companies, banks, whatever, the customer gets a voice machine. Some voice machines never tell the customer how to get a live person who can, on occasion, actually fix the problem.

In my opinion, the strategy behind endless delays is to cause customers to give up, slam the telephone down and play the higher incorrect bill as it is cheaper in time and frustration to correcting the problem and being billed in the correct amount. These ripoffs of the customer are produced by Wall Street pressures for higher earnings.

The frustrations, of course, multiply when one reaches an offshored service somewhere in the Third World. The incentive is to hang up and to pay the excessive bill so that phone, internet, or credit card services are not cut off.

Had Don Regan and I known that the high-speed Internet was in our future and that American corporations would use it to destroy the jobs traditionally filled by US university graduates, possibly we would have decided to save the regulated telephone monopoly and to deliver the economy over to stagflation.

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http://www.paulcraigroberts.org/

Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here. His latest book,  How America Was Lost, has just been released and can be ordered here.

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Thanks to the for giving this information.... by Alpha Clothing Company on Thursday, Aug 12, 2010 at 3:27:06 AM
your not putting blame where it belongs... mis reg... by steve brandt on Thursday, Aug 12, 2010 at 10:35:06 AM
boy Steve you must be joking! For those of you out... by Michael Shaw on Friday, Aug 13, 2010 at 3:31:58 PM
Mr. Roberts it is nice that you have broken ranks ... by Steven G. Erickson on Thursday, Aug 12, 2010 at 11:15:23 AM
How about blocking intersections in protest on bot... by Steven G. Erickson on Thursday, Aug 12, 2010 at 11:23:06 AM
i'm standing up if you need a extra.... by steve brandt on Thursday, Aug 12, 2010 at 1:08:45 PM
Pass the word. Yes, stand in, stand up, and get th... by Steven G. Erickson on Thursday, Aug 12, 2010 at 3:47:14 PM
we actually should not even attend any pro sportin... by magoo on Friday, Aug 13, 2010 at 12:52:24 PM
America's largest producer and employer, the Penta... by Sherwood Ross on Thursday, Aug 12, 2010 at 11:47:54 AM
Lets not forget Halliburton, VP Cheney's former ( ... by Paul Kruger on Thursday, Aug 12, 2010 at 1:06:22 PM
Mussolini once said "Fascism should more aptly be ... by McMicah on Thursday, Aug 12, 2010 at 1:27:10 PM
(People are such herd animals)...it's NOT Socialis... by Bia Winter on Friday, Aug 13, 2010 at 9:39:37 AM
The MIC was the first act in Mussolini style corpo... by Michael Shaw on Friday, Aug 13, 2010 at 4:04:19 PM
Re. "I might have been able to prevent the destr... by Paul Kruger on Thursday, Aug 12, 2010 at 11:56:56 AM
The breakup of ATT did not give me any choice of p... by Old Uncle Dave on Thursday, Aug 12, 2010 at 3:59:41 PM
"Regulation" seems to be the operative word here..... by Bia Winter on Friday, Aug 13, 2010 at 9:44:14 AM
exactly what regulation meant to AT&T before t... by Michael Shaw on Friday, Aug 13, 2010 at 11:05:54 AM
.......that NOW they have even more "natural monop... by Bia Winter on Friday, Aug 13, 2010 at 12:35:01 PM
I hear ya Bia! That was the worst unconstitutional... by Michael Shaw on Friday, Aug 13, 2010 at 3:20:04 PM
Thanks for taking the time to look and investigati... by Debbie S on Thursday, Aug 12, 2010 at 12:18:40 PM
well said...... by steve brandt on Thursday, Aug 12, 2010 at 1:06:17 PM
...came first from the INSIDE, Debbie.(The same on... by Bia Winter on Friday, Aug 13, 2010 at 9:48:36 AM
"A robot must obey any orders given to it by human... by Paul Kruger on Thursday, Aug 12, 2010 at 12:34:37 PM
your not putting blame where it belongs... mis reg... by steve brandt on Thursday, Aug 12, 2010 at 1:03:27 PM
Strange thing to lay on progressives when it is th... by Paul Kruger on Thursday, Aug 12, 2010 at 1:17:42 PM
Remember the "Military Industrial Complex" Ike war... by Bia Winter on Friday, Aug 13, 2010 at 9:56:19 AM
Phone service and air travel, the two areas discus... by Paul Karsh on Thursday, Aug 12, 2010 at 2:23:45 PM
Well you have gone full circle. I thought you had ... by dumpthedlc on Thursday, Aug 12, 2010 at 3:15:47 PM
Yes, the monopoly AT&T certainly provided more... by martinweiss on Thursday, Aug 12, 2010 at 3:37:55 PM
Yep...under the Ayn Rand philosophy, freedom from ... by David Morris on Friday, Aug 13, 2010 at 5:10:29 PM
A couple of additions that come to mind off-the-cu... by ear on Thursday, Aug 12, 2010 at 3:46:19 PM
I really appreciate your recent writings, Paul, bu... by David Morris on Thursday, Aug 12, 2010 at 5:50:07 PM
I took my time about commenting tonight, curious t... by Ritt Goldstein on Thursday, Aug 12, 2010 at 8:36:48 PM
I took my time about commenting tonight, curious t... by Ritt Goldstein on Thursday, Aug 12, 2010 at 8:39:38 PM
I give the former secretary cudo's for some of thi... by Michael Shaw on Thursday, Aug 12, 2010 at 10:05:58 PM
Ma Bell was an overbloated group of arrogant miser... by Michael Shaw on Friday, Aug 13, 2010 at 12:48:46 AM
What I take away from this article and the comment... by Maxwell on Friday, Aug 13, 2010 at 7:09:28 AM
Spiraling deficits caused by these cuts have nothi... by Michael Shaw on Friday, Aug 13, 2010 at 10:56:17 AM
"Unregulated greed has destroyed the capitalist sy... by Bia Winter on Friday, Aug 13, 2010 at 9:24:27 AM
I really enjoy Roberts, I'm a real fan. His perspe... by Terry on Saturday, Aug 14, 2010 at 6:17:38 AM
Mr. Roberts is alluding is the fact that these hug... by Michael Shaw on Saturday, Aug 14, 2010 at 12:44:08 PM
...here in Florida is Progress Energy, which was d... by Ginger McClemons on Saturday, Aug 14, 2010 at 4:35:49 PM