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Sept. 24, 2015 — When businesses go rogue

Over the last few years, as China has become Destination Central for companies to relocate manufacturing jobs, there has been a troubling trend: defective and sometimes dangerous goods which have found their way back to the American marketplace.

There have been stories of antifreeze in toothpaste, formaldehyde in drywall, and mercury in vitamins, all of which have found their way into the American consumer marketplace.

But a pair of stories regarding products coming from companies in the First World have hit the news hard this week. On Tuesday, Peanut Corporation of America CEO Stuart Parnell was sentenced to 28 years in prison for his role in a salmonella outbreak in 2009 that spread to 46 states and sickened hundreds of people, killing nine.

In testimony during the trial, it was found that Parnell and his minions not only shipped peanut products known to contain salmonella, it also faked lab results for other shipments to make them test negative for the bacteria.

Then, yesterday, Volkswagen CEO Martin Winterkorn announced his resignation after it was found that up to 11 million so-called “clean diesel” cars, with Audi and VW branding, were not actually clean at all. Instead, there were lines of computer code in the engine control module that would ensure that, under most of today’s testing procedures, that the car would not be shown to emit high amounts of NO2 into the atmosphere.

In both of these cases, the people who ran these companies rigged testing that allowed these products into the marketplace. It is rogue capitalism, where companies are allowed to do anything they want, even if their products harm the very people who buy them.

There has been plenty of such rigging in the last few years, especially in banking, insurance, and health care. Mortgage companies were allowed to create financial products that were predicated on a high number of people being unable to pay their mortgage bills on time, thereby depressing the housing market and the general economy — except for the market in mortgage-backed securities.

The regrettable aspect is that, because of a lack of U.S. government funding over the years, the organizations that are supposed to oversee these industries do not have the requisite personnel to do an effective job.

One report placed the number of agents overseeing car emissions at eight, overseeing 10,000 complaints each. That’s a worse caseload than school counselors, public defenders, and mental health crisis managers. And we all know what has happened in these sectors.

Think about it.


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