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Profits Vs. People: Which Comes First In America?

By VVAW

Richard Nixon, in his State of the Union address, tried to scare away America's economic crisis by saying: "There will be no recession in the United States of America." This statement comes as a shock to the millions of Americans facing a deluge of rising prices and shrinking buying power. Even Nixon's aides are having a hard time making reality fit the distortions of Nixonomics.

Ground beef is $1.39 a pound, gas is over 50 cents a gallon and a loaf of bread may cost as much as a dollar in the spring. Five million people are out of work and economists say that it could be as high as 7-8 million by the end of the year. The inflation rate is hovering around 8% while wages are being held to a possible 5.5% increase. However, the corporations in agriculture and energy are showing enormous profits while wage earners are drowning in the "non-existent" recession.

The answer to this contradiction is summed up in one word: exports. According to United Nation statistics, a third of the wheat bought on the world market comes from the United States and Canada. During the 1960's, the US exported over 40% of its cotton, rice and major grain crops. Japan now eats 29% of all U.S. meat exports and in 1973, the U.S. tripled its total meat exports. Not only does agribusiness profit from exports, the energy industry has reported that most of its phenomenal profits in the last quarter of 1973 came from foreign oil sales and production.

To understand the importance of exporting and U.S. production, one need only look at the related industries. As the corporations send more to foreign markets, the supply available to American consumers shrinks accordingly. When wheat is sold overseas, the cost per bushel dramatically rises. This affects the meat industry since feed comes from grain. Now take the high cost of meat and add it to the rising cost of transporting that meat and you have $1.39 for hamburger. That's a pretty simplified picture, so let's look at the grain industry in more detail.

Testifying before the House Committee on Ways and Means, Secretary of Agriculture Earl Butz said: "Exports are responsible for about one-fifth to one-quarter of net farm income... This year we are exporting the produce of more than 80 million acres, equivalent to nearly 30% of harvested cropland." At the same time, the government was paying corporations to withold 60 million acres of land from production. Instead of curbing exports to increase the supply at home, Nixon allowed the grain industry (read: corporations like Continental - a subsidiary of ITT, Tenneco, General Foods, Greyhound and Safeway) to make a killing with the Soviet wheat deal. While witholding information from the public about a major wheat sale to the Soviet Union, he let the giant grain dealers in on the secret, allowing them to buy up wheat supplies cheaply. Then, when the price of what on the world market had jumped several dollars, the exporters unloaded the wheat to the Russians, thus making a huge profit (part of which included 150 million dollars in government subsidies which are funded by taxpayers money).

All this exporting causes a shortage on the domestic market and forces prices up. Cattle feed costs more, thus causing a rise in the prices of wholesale beef. This causes a ripple in the whole meat industry as everyone raises their price, until it reaches the consumer (who can't raise the money to pay for it). No one who steps inside a supermarket can miss this. In August, 1972, a dozen eggs cost 31 cents in Chicago. A year later that same dozen eggs cost 80 cents. In June, 1973, a pound of chicken cost 45 cents in New York City. Just two months later, that same pound of chicken cost 74 cents.

The fuel industry works the same way with an even more drastic effect. In earlier issues of Winter Soldier, we explained that the fuel "crisis" was a planned shortage, but it is also important to realize that the super profits the oil companies are reporting come from the inflated prices of oil on the world market. Exxon, one of the biggest oil producers, had an overall profit increase of 50% in 1973. Seventy-five percent of that profit was made overseas. Everyone knows the effect that the fuel shortage has had in terms of jobs and the very way Americans must now live. To further illustrate the trouble the economy is in, the GNP (Gross National Product) showed only 1% increase. That means that the supply of goods on the U.S. market is dropping while the prices for those goods are rising.

Besides the stagnation in U.S. production at home, many companies are moving their factories to other countries where labor is cheap and unorganized. Already, whole factories have been moved to Africa, Asia, and Latin America. Only one new oil refinery has been opened in the U.S. in the last two years while several refineries have been constructed overseas. These movements overseas play a key part in domestic inflation. Inflation, put simply, means that the dollar has less value for purchasing goods while the supply of goods decreases.

This is the essence of imperialism. Nixon and his policies are only protecting this basic tenet of the American economy -- the scramble to make profits. If Exxon and ITT can make more money by selling and producing in foreign markets then that's what they will do. They will also insure their ability to do this by controlling the policies of the federal government to the extent of buying a president, pouring millions into campaign contributions, lobbying, and asking for military protection of their foreign holdings. Inflation does not hurt ITT. We oppose imperialism because it hurts us -- the poor, wage earners and small businesspeople alike. To demand an end to imperialism means to demand an end to joblessness, an end to high prices, an end to government by the dollar, and an end to wars like Vietnam. To kick Nixon out of office is to show that we are opposed to these practices and will not tolerate loss of lives or food for the rise of profits.