The Corp-ernment Symbiosis: How Corporations Became A Bloated Government's Best Friend

Tyler Durden's picture

Corporate profits have been boosted unusually in recent years by fiscal support to the economy, the very heart of the risk posed by 'the cliff.' The national savings rate fell while private savings rebounded during the recession and 'recovery' to date.


The incremental demand created by large budget deficits came with very limited business costs, unusually boosting profit margins - as is eminently clear from the chart below...


...and crushing wages and labor costs (as we noted previously).


With earnings surprises relative to the beginning of quarter estimates now negative for the sixth quarter in a row...


...and expectations for an 11.9% YoY rise in S&P 500 EPS next year (after this year's +5.3%)...


Molehill, slide, or cliff, we simply do not see these expectations being met from further fiscal support.

Critically though, despite all the political rhetoric, jawboning and pre-election bluster, corporations may or may not be people, but what they have turned out to be is the government's best friend as without corporations firing millions, the government would be unable to enslave everyone via a habituation to the government's "transfer payment" generosity. Since government has no 'choice' but to do its rightful duty and bail out those poor citizens crushed by the "evil" corporations, it allows the US Treasury to spend, spend, spend under the guise of another false conflict. The corporations (knowingly or unknowingly) are doing the government's bidding (and receiving the quid pro quo) even as the tentacles of uber-government reach everywhere and more than half the US population would exist in a state of learned helplessness if its weren't for Uncle Sam's weekly check, modest as it may be.

To summarize: crony Capitalism for the richest, socialism for the poorest; and the middle class goes the way of the Twinkie Dodo.


Charts: Citi

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LawsofPhysics's picture

Corporations/people need their subsidies/entitlements, any questions?

Michaelwiseguy's picture

Corporations are legal terminology "CORPORATE PEOPLE", not "Natural People" Americans are too stupid to understand the distinction between the two.

By Gordon Duff and Press TV — “The tendrils that stretch from Tel Aviv have shown themselves of late, not immediately but the mosaic is beginning to come together, the pattern to be seen, understood, its brazenness and hubris grossly contradictory to popular “victimization mythology” used to wage war on the world “through deception.” Three missiles have traveled the 50 miles from Gaza to Tel Aviv and Israel’s “Iron Dome” was proven less than promised and the possibility of tens of thousands of missiles from Lebanon became an inexorable reality if the “madness of Netanyahu” goes unhindered.

I understand Netanyahu; I just do not forgive him. Where Gaddafi faced physical danger, defiant to the end, Netanyahu believes himself under similar circumstances.

He sits in Tel Aviv like a spider as he hatches his plots, Romney and the promise of a Greater Israel and a “shock and awe” attack by the US on Iran, those schemes lie in ruins.


NewThor's picture

"I'm with the corporation and I'm here to help."

Cliff Claven Cheers's picture

At the bank where I work we ask delinquent credit card holders to apply for food stamps and other forms of welfare so they can free up some money to pay us.

Genius No?

Skateboarder's picture

Sorry sir, all the disposable income went toward booze and pot.

Cliff Claven Cheers's picture

Trust me I see all the liquor store purchases, fast food, gas stations, macys etc.  The good ole american shoppers, gotta love em.

NewThor's picture

You know, if they legalized Marijuana.

I wouldn't actually have to spend money on it.

I hear that shit is really easy to grow.

Joe Davola's picture


Skateboarder's picture

I'm from the mid-20s crowd and I can attest, quite truthfully, that a good portion of my peers spend most of the paycheck on booze.

It's so expensive to hit the bars, but the modern club-going lifestyle is so engrained in their heads from all the garbage music and lifestyle promotions of their favorite celebrities that they barely have a choice left to make.

Squid-puppets a-go-go's picture

whaddyamean no choice?

They could even become Amish if they wanted to


FoeHammer's picture

Mid 20's as well. Club Brain-Dead: It's the hottest spot!

redpill's picture

They have a word for the merger of government and business, it's called economic fascism.  It's a different animal than straight-forward nationalization, which is plagued by the government idiocracy.  With economic fascism, the giant corporations use their business acumen to help the government more fully fleece the populace, while government helps the giant corporations with tax gifts and de-facto monopolization through regulation.  A very symbiotic relationship.  Oh, by the way, the rest of us get fucked.

OpenThePodBayDoorHAL's picture

I think this guy has it right: it's called Inverted Totalitarianism:

alangreedspank's picture

So the welfare state is a banking industry subsidy? Shocking!

Go Tribe's picture

Take away their Twinkies. Oh wait...we did that already.

LawsofPhysics's picture

Does it matter? NO.  Just like people who can't be successful at creating something of real value, corporations that can't do the same should be allowed to go bankrupt and have their assets and the assets of their owners sold outright to pay of the creditors.  If you take the risk and profit in the good times, then you should also be the one that suffers and fucks off and dies when you mis-manage the company. NO MORE BAILOUTS, PERIOD.

Skateboarder's picture

What we have is a very confused world population who have forgotten the basics of valuation in general. Why else would anyone allow a bailout in the first place?

Until this is the response from every earthborn human, society still has work to do:

"Bailout? For a bank/corporation? ARE YOU FUCKING KIDDING ME! Get the fuck outta here before I shove your head up your ass."

Chupacabra-322's picture

@ Michaelwiseguy,

There are 2 types of States, THE STATE OF’s and CORPORATIONS and LEGAL FICTIONS IN ALL CAPS, ____ State in non ALL CAPS are the land you stand on. THE UNITED STATES IN ALL CAPS IS A CORPORATION. America is the land body we stand on. Learn this. Your name in ALL CAPS IS A LEGAL FICTION ALSO. You will see it on all OFFICIAL GOVT DOCS and anything involving $. Look at your mail and wallet you will see your STRAWMAN. No STATE OF will listen to you they are CORPORATIONS AND PART OF US INC. Only a majority of people can give CONSENT OF THE GOVERNED. LEARN ABOUT CORPORATION US INC., THE STATE OF, THE CITY OF, THEY ARE ALL CORPORATIONS. COURTS ARE ADMINISTRATIVE COUTS AND UNCONSTITUTIONAL, Ron Paul said it in his speach. This is the MATRIX we live in, an illusion that nothing changed when the free United States of America became THE UNITED STATES, the CORPORATION. PROOF IS IN THEIR OWN US CODE: USC 28 Section 3002, No. 15(a) “United States” means a Federal Corporation.) The United States was incorporated February 21, 1871 (16 Stat. 419, Chap. 62, 41st Congress, 3rd Session), the purpose being “an Act to provide a Government for the District of Columbia, reorganized June 8th, 1878, (20 Stat. 102, Chapter 180, 45th Congress, 2nd Session) as “an Act providing a permanent form of government for the District of Columbia” aka US Inc. Uniform Commercial Code, UCC9-307 (h) states “Location of United States. The United States is located in the District of Columbia.

LawsofPhysics's picture

Correct.  Almost a 100-year experiment.  I wonder what the corporate owners are going to do with their property when the corporation goes into receivership?  The U.S. already went bankrupt.

Chupacabra-322's picture

@ LawofPhysics,

Hey, Psssssst, got news for ya.  We're already been in receivership.  Search engine it.



LawsofPhysics's picture

" We're already been in receivership."


Not sure I follow you.  Did you mean; "We've already been in receivership" or "We're in receivership now."


I'd argue the latter, but only because of the too big to fail bullshit, let the bad debt clear already.  yes, it will be painful, but necessary.

Chupacabra-322's picture

The latter, "We're in receivership now."  Then again The UNITED STATES, FASCIST CORP. has been technically bankrupt twice in our history.  1871, or District of Columbia Organic Act of 1871 which formed the UNITED FASCIST STATES and 1933.

From a speech in Congress in The Bankruptcy of the United States Congressional Record, March 17, 1993, Vol. 33, page H-1303, Speaker Representative James Trafficant Jr. (Ohio) addressing the House states:

“…It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 – Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: “The U.S. Secretary of Treasury receives no compensation for representing the United States…

Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens of mortgages until the Federal Reserve Act (1913) “Hypothecated” all property within the Federal United States to the Board of Governors of the Federal Reserve, in which the Trustees (stockholders) held legal title. The U.S. Citizen (tenant, franchisee) was registered as a “beneficiary” of the trust via his/her birth certificate. In 1933, the Federal United States hypothecated all of the present and future properties, assets, and labor of their “subjects,” the 14th Amendment U.S. Citizen to the Federal Reserve System. In return, the Federal Reserve System agreed to extend the federal United States Corporation all of the credit “money substitute” it needed.

Like any debtor, the Federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the Federal United States didn’t have any assets, they assigned the private property of their “economic slaves,” the U.S. Citizens, as collateral against the federal debt. They also pledged the unincorporated federal territories, national parks, forests, birth certificates, and nonprofit organizations as collateral against the federal debt. All has already been transferred as payment to the international bankers.

Unwittingly, America has returned to its pre-American Revolution feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the People have exchanged one master for another.”


Chupacabra-322's picture

National Security is deception/Illusion to hide the fact that we are Slaves of the Coporate Banking Global Elite. They have set up a Police State to protect THE UNITED STATES CORPORATION. Ever wonder why your name is in CAPITAL letters on your birth certificate. Yes, unknowingly we've all been given away at birth to debt bondage and slavery to a "strawman". Research it.


It is not the duty of the police to protect you. Their job is to protect the Corporation and arrest code breakers. Sapp v. Tallahasee, 348 So. 2nd. 363, Reiff v. City of Philadelphia, 477 F.Supp. 1262, Lynch v. N.C. Dept of Justice 376 S.E. 2nd. 247.


The FCC, CIA, FBI, NASA and all of the other alphabet gangs were never part of the United States government. Even though the “US Government” held shares of stock in the various Agencies. (U.S. V. Strang , 254 US 491, Lewis v. US, 680 F.2d, 1239)


Social Security Numbers are issued by the UN through the IMF. The Application for a Social Security Number is the SS5 form. The Department of the Treasury (IMF) issues the SS5 not the Social Security Administration. The new SS5 forms do not state who or what publishes them, the earlier SS5 forms state that they are Department of the Treasury forms. You can get a copy of the SS5 you filled out by sending form SSA-L996 to the SS Administration. (20 CFR chapter 111, subpart B 422.103 (b) (2) (2) Read the cites above)

The IRS is not a U.S. Government Agency. It is an Agency of the IMF. (Diversified Metal Products v. IRS et al. CV-93-405E-EJE U.S.D.C.D.I., Public Law 94-564, Senate Report 94-1148 pg. 5967, Reorganization Plan No. 26, Public Law 102-391.)

The IMF is an Agency of the UN. (Blacks Law Dictionary 6th Ed. Pg. 816)

The U.S. Treasury is now the IMF. (Presidential Documents Volume 29-No.4 pg. 113, 22 U.S.C. 285-288)


And finally,

There are no Judicial courts in America and there has not been since 1789. Judges do not enforce Statutes and Codes. Executive Administrators enforce Statutes and Codes. (FRC v. GE 281 US 464, Keller v. PE 261 US 428, 1 Stat. 138-178)

Michaelwiseguy's picture

Thanks for your input Chupacabra-322.

The 16 Trillion Dollar District of Columbia Corporation Debt Is Not National Debt!

The debt of the Federal Government Of The United States Of America Corporation as Enacted is theirs and theirs alone! You Don't Have to Pay on It!

The District of Columbia Organic Act of 1871 aka “An Act to provide a Government for the District of Columbia (41st Congress, 3d Sess., ch. 62, 16 Stat. 419, enacted 1871-02-21) is an Act of Congress, which revoked the individual charters of the City of Washington, the City of Georgetown, and the County of Washington and created a new city government for the entire District of Columbia. The legislation effectively merged what had been separate municipalities within the federal territory into a single entity. It is for this reason that the city, while legally named the District of Columbia, is still commonly known as Washington, D.C. However, this act was abolished in 1874, and while the name did not change, the territorial Governor was replaced with a three-member Board of Commissioners appointed by the President. This system existed until 1974 when the District of Columbia Home Rule Act allowed for District residents to elect their own mayor.

District of Columbia Home Rule Act - As Amended Through 1997

The Stock Share Holders of the Washington D.C. Corporation are alone responsible for the 16 trillion dollar debt, made so by the Act of 1871 and subsequent Act revisions.

It also follows, The Federal Reserve Act of 1913 created a Banking Corporation with Stock Share Holders.

The accumulated debt held on the Federal Reserve Corporation's balance sheet belongs to The Stock Share Holders of the Federal Reserve Corporation, and the owners of its Member Banks, period.

District of Columbia Act of 1871 Defacto formed 1

District of Columbia Act 1871 De Facto formed 2

District of Columbia Act 1871 De Facto formed 3

Skateboarder's picture

Thanks for the post Chupa. Tell it once, tell it a million times, until everyone understands what the fuck they did to your existence. It's gotta be an asskicker for anyone who comes to realize the difference between your coporate self and real self (which barely exists lol), but that's the angle at which this whole thing has been played out at, and it's very important for everyone to understand the difference between a legal word and a regular word.

Boring as shit, but a must-have accompaniment to all pursuits of understanding the global corporate system:

Chupacabra-322's picture

@ Skateboader,

To know the system is to destroy the system.  We're literally debt SLAVES.  It's what the Banksters and Global Elite fear.  Copy and paste, forward the truth.

Meet Your Strawman

Skateboarder's picture

Decent video, Chupa, a fair introduction to the complex issue. I'm a fan of Clint Richardson's blog - he writes some wonderful articles. If I were to suggest reading regarding the subject, I would definitely pick his article.

Just Ice's picture

Pathetic society of dependency...and what do they (the dependents) all do once gubmint runs out of confiscated $ to bestow upon them.  The rioting and suicides in Greece and Spain come to mind.

otto skorzeny's picture

a disintegrating middle class(thanks to wealth destruction through inflation) finds a messiah-type demagogue to lead them-where has this played out so well before?

chubbyjjfong's picture

Over the past year I took my money out of the financial system.  I bought hand tools and built a guitar.  It was extremely satisfying.  I now have a fine instrument to play.  Gold manifests itself in many forms.  Physical value.  Its a wonderful thing.

otto skorzeny's picture

this is ZH-I hope you built that gee-tar out of gold.

chubbyjjfong's picture

To me, 'it is as good as gold'.  That is the point.

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

That's all fine and good but did you have a permit to do so!?  The feds have been harassing one U. S. guitar maker for years with their tyranny.  Seems the company was not following U. N. mandated regulations.

chubbyjjfong's picture

I believe you are referring to Gibson being raided by WEG for illegally importing Indian Rosewood without proper CITES documentation.  I built my guitar from a fence post in my garden that has been there since 1926.  I can hear the footsteps of the Wildlife Enforcement Group as I type.  I doubt they know jack shit about Podocarpus totara though.

ptoemmes's picture

Hmmm...I never thought of turning employees into government transfer payment slaves to be a (profitable) business model.

falak pema's picture

the current meme here on ZH is "this is socialism". 

Its a sign of profound ignorance for people of intelligence to talk thus; a sign of logical regression ensconsed in prejudice that espouses dogmas of "freedom without responsibility and accountablitiy", of hubris fed on narcissism without restraints, and relegates the social contract like it were a vile and secondary object of society. We lose the nation, we lose democracy.

This is factually and philosphically inexact. The most vibrant thread in the flowering of knowledge in the West has been the realisation that the heart of civilization is Man and not the economy. The economy is a means to and END. And as the wheel of knowlege has spun its fruits have made man more powerful intellectually as technologically. But the finality of society is to serve man, to feed, lodge and clothe him and to ensure his reproduction so that each generation progresses.

This current regressionary spiral, in neo-feudal oligarchy, this return to hyper-verticality, is the expression of a peak phenomenun : that of unlimited resources to feed the industrial meme that has made us what we are since 1850 when the industrial age began. 

We are now in a new age of revolution like Copernicus and Galileo before us, where we will have to find other ways of advancing. Our current paradigm will not ensure that our children lead better lives than us. That is becoming increasing clear in first world. Technology and market forces are a means to achieve the END of furthering human well being, not of creating a zombie society where some maximise profit at the expense of others.

Its all about balancing individual freedoms and collective needs and the responsibility that entails, especially on the strong. 

adr's picture


Freedom is the ability to fail and be given that chance without interference from others. Freedom is also the right to tell anyone what you wish and to allow prejudice and selectivism. Essentially to move as far away from collectivism as possible.

If you want to start a business and only cater to people between the height of 5'4" and 5'10" with red hair, well you should be allowed to do so. If there isn't a market for a business like that, then you will fail. You will learn from your mistake and perhaps widen the audience for your product. Liberalism has tried to wipe this practice off the map because it proves that certain people are just plainly better at some things than others. A single town may advance further than another by the virtue of its people. Proof of right means that not all ideas can be accepted as truth.

This also allows for everyone to grow, as there is no handout to keep people existing at the bare minimum. You either embrace success or starve. The downfall of our society has been people trying to embrace the first tenant of socialism, that all can be equal and everything should in order to prevent anything or anyone from failing. By trying to wipe out failure you can only be assured to fail.

ebworthen's picture

The Kleptoligarchy is not compassionate.

I see an increasingly zombie society.

"To Serve Man" = Soylent Green

SilverMoneyBags's picture

Actually when corporations run the government its called State Capitalism, not socialism.

falak pema's picture

Nope, Exxon does not belong to the state, neither does Apple. We are not in Petrochina or Gazprom structures. That is true state capitalism.

America is the most oligarchical capitalist state. And its inverted totalitarianism : the corporates control the government not the other way around as in true statist countries. 

The FED, which is private owned, although it works under government mandate, is the hub of this inverted construct. 

Democracy and republic are now OWNED by the corporate class, and Oligarchy markets are their way of pumping profits to themselves legally as do their crony government friends via taxes; double whammy!

The worst of both worlds. And the Reagan age has now completed TOTAL transfer to private elitist, closed shop hands from state initiated by the FED move; which was constrained by the FDR-JFK years by big state structures; who lost their "people's base" when the labour movement was destroyed by Reagan as by Thatcher. 

Perfect matrix now and its gone global as its compatible with its mirror opposite : State capitalism as in Russia/China. 

The middle class loses out as neo-feudalism only tolerates the serf.

slaughterer's picture

This "recovery" is sociopathic, inhumane and totalitarian

NEOSERF's picture

Hostess averts shutdown...all hail the bailout?

ebworthen's picture

No, the Mexican baker will buy the rights and make Twinkies in Sonora.

adr's picture

I like how profits can be greater than sales, and not by a small amount either.

I mean if someone told me I can make more in the way of profit than the actual dollar value of the good I sold, I think I would laugh in his face.

But there it is, plain as day that the percent change in profits is somehow way ahead of sales.

I guess that is profit on selling stock instead of selling goods. Why would you ever need to actually make anything if you can just pay yourself in stock and get filthy rich in the process.

God Rockefeller wouldn't have even needed to open a refinery today. Just say that he was going to transform oil into fuel, and really mean it. Investors would shower him with freshly printed cash.

ebworthen's picture

The Kleptoligarchy cemented by the Supine Court deciding that private property could be confiscated to increase tax revenues and that corporations are individuals.

The bailouts by both sides of CONgress came in-between those two decisions.

N.D.A.A. is almost a year old.


Joe Davola's picture

I'm with you man, Kelo opened a big door and it's only a matter of time until some really odious stuff is paraded through.

FoeHammer's picture

I'm sure it's all in my best interest too! That's what the teevee said.   /sarc