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Profits Over People: Why Weren’t the Vaccine Manufacturers Nationalized?

Do COunterPunch, Janeiro 13, 2022
Por  DAVID ROSEN


Photograph Source: tani.P – CC BY 2.0

As of December 18, 2021, more than 800,00 Americans had died due to Covid-19 epidemic. The historic legacies of both the presidencies of Donald Trump and Joe Biden will be shadowed by the those who died, let alone suffered, from the pandemic.

On January 20, 2021, the day Trump left office, 392,641 people had died of Covid; as of December 18, 2021, 411,359 people died during the first 11 months of Biden presidency – and Biden has another three years in office.

Often forgot, during the seven years of World War II (1939-1945), 407,316 U.S. military personnel were killed.

Historically, during a period of national emergency, the U.S government nationalizes key business sectors. During the Civil War, World War I and II, and in subsequent periods of national crises, the federal government-initiated programs to safeguard the country for adversity.

So, why has the death of 800,000-plus Americans – and 5.5 million people worldwide – from Covid not risen to a crisis-level requiring the U.S. government to nationalize the key pharmaceutical manufactures? Yes, why?

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Unknown by most Americans, the U.S. has a long history of nationalizing vital industries and businesses during a period of national crisis. An excellent analysis by Thomas Hanna, “A History of Nationalization in the United States, 1917-2009,” details how the federal government has — since the Civil War — repeatedly intervened in the affairs of private business interests to safeguard the nation’s greater interests. The following summarizes information drawn from Hanna’s study.

Civil War

Under the Railways and Telegraph Act of 1862, the Union took over captured Confederate trains and railroads, and merged them into the federally owned U.S. Military Railroads system that was created in February 1862 by the War Department.

World War I

On April 6, 1917, the day the Senate ratified the declaration of war with Germany, Pres. Woodrow Wilson exercised a provision of the Radio Act of 1912 that enabled nationalization during a war; the Navy physically acquired radio companies, consolidated them and broke patents to stimulate innovation; it also took over around 50 commercial radio stations and closed down the rest of them (along with all amateur radio operators).

The Wilson government nationalized the telegraph and telephone networks, specifically the operations of Western Union and AT&T respectively.

In December 1917, Pres. Woodrow Wilson invoked the Army Appropriations Act of 1916 and signed an executive order taking control of the nation’s railroads (except local, city lines).

In September 1918, the U.S. nationalized the arms manufacturer Smith & Wesson following a labor dispute.

Still other companies nationalized included the Federal Enameling and Stamping Company, a fuse-making company facing bankruptcy; and Liberty Ordnance Company and Mosler Safe Company, “companies were unwilling (or unable) to produce required war materials at a reasonable price …”

The U.S. government nationalized the American subsidiaries of German companies.

Great Depression

Through the creation of the Tennessee Valley Authority (TVA), the federal government nationalized the privately owned Tennessee Electric Power Company (TEPCO), the largest privately owned power monopoly in the state.

Through an executive order (6102) and the Gold Reserve Act of 1934, the Roosevelt Administration essentially nationalized the nation’s gold reserves.

World War II

With war looming, in May 1941, Pres. Franklin Roosevelt declared an “unlimited national emergency,” stating “this Government is determined to use all of its power to express the will of its people, and to prevent interference with the production of materials essential to our Nation’s security”; in June ’41, a strike at North American Aviation Inc., a producer of military airplanes led Roosevelt to issue an executive order (8773) authorizing the Secretary of War to nationalize the facility.

In August 1942, S.A. Woods Machine Company refused to accept a federal order approving the recommendations of a management-labor arbitration process; the case was referred to Roosevelt who issued an executive order (9225) nationalizing the company’s facilities.

In May 1943, Pres. Roosevelt signed an executive order (9340) placing any mine that had experienced a strike or work stoppage under government control; in June 1943, Congress passed the War Labor Disputes Act (over the veto of President Roosevelt) giving the government authority to nationalize any facilities that could be used for war production; during the war, some 3,300 coal mines were nationalized.

In April 1944, Pres. Roosevelt issued executive order (9438) allowing the Commerce Department to nationalize elements of the Montgomery Ward department store chain, including its main factory in Chicago; the action culminated in federal troops forcibly removing the company president, Sewell Avery, from his office.

In addition, the U.S. nationalized 13 leather manufacturing facilities, 565 railroads, 7 textile mills and many other private companies.

As had happened during WW-I, the government nationalized the American subsidiaries of German and Japanese companies.

Cold War

In September 1950, Congress passed the Defense Production Act (DPA) that gave the President broad authority to intervene in the domestic economy to further the war effort; the DPA has since been reauthorized by Congress more than 50 times and remains in force to this day (the next renewal vote will be around September 2025).

In August 1950, Pres. Harry Truman issued an executive order seizing 195 railroads and putting them under the jurisdiction of the U.S, Army.

In April 1952, Truman issued an executive order (10340) nationalizing the steel mills; challenged by the industry, the Supreme Court ruled the seizure unconstitutional.

In 1956, Congress passed — and Pres. Dwight Eisenhower signed — the Federal-Aid Highway Act that set the goal of constructing 41,000 miles of interstate highway; during the ‘50s and ‘60s, 750,000 uses of eminent domain were executed to build the highway system.

1970-2000

Federal “bailouts” replaced nationalization as the modern form of government economic intervention; such bailouts involved Lockheed (1971) and Chrysler (1979), among others.

The federal government nationalized Penn Central Railroad in 1970, setting the stage for the establishment of Amtrak and Conrail; in 1986-87, under Pres. Ronald Reagan, they were reprivatized.

In 1984, FDIC nationalized failing banks, including Continental Illinois National Bank and Trust Company.

In 1989, Pres. Reagan used the Resolution Trust Corporation (RTC) to take over and close 747 insolvent savings and loan associations (S&Ls) with assets of more than $400 billion; “the total cost of the crisis is estimated at around $160 billion, with $132 billion of that shouldered by taxpayers.”

2001-2010

In the wake of the 9/11 attacks, the federal government bailed out numerous airlines, including US Airways, America West Airlines, Frontier Airlines, American TransAir, American TransAir and World Airways.

In the wake of the 2008-2009 financial crisis, the federal government bailed out 707 banks with capital injections; Pres. George W. Bush nationalized the giant mortgage companies Freddie Mac (the Federal Home Loan Mortgage Corporation) and Fannie Mae; the federal government took a 77.9 percent share of insurance giant AIG, a 36 percent stake in Citigroup and took ownership interests in General Motor ($13.4 billion) and Chrysler ($4 billion).

For more details on these actions and a lot more, do read Hanna’s invaluable study.

***

In February 2020, as the Sars-CoV-2 virus began to spread through the U.S., Alex Azar, Secretary of Health and Human Services, testified before Congress. Rep. Jan Schakowsky (D–IL) pointedly asked him: “You’re saying that [a vaccine] will, for sure, be affordable for anyone who needs it?” Azar replied: “We [Trump administration] would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest. … Price controls won’t get us there.”

In the two years – and 800,000-plus deaths – later, both the Trump and Biden administration have worked to ensure that the “private sector” maximized their profits from the Covid pandemic. And the principal providers of anti-Covid vaccines have done very well. Forbes noted:

Big pharmaceutical and insurance companies have played a central role in the pandemic, racing to find a scientific solution to the nightmare virus and covering associated costs, like Covid-19 testing. But the pandemic has also been good for many healthcare businesses.

The leading Covid-19 vaccine providers did exceptionally well during 2021:


+ Pfizer projects 2021 revenues of the Covid-19 it developed (with German partner BioNTech SE) to reach $36 billion and forecasts another $29 billion for 2022.

+ Moderna projected its Covid-19 vaccines sales would be between $15 billion and $18 billion in 2021.

+ Johnson & Johnson project projected its Covid-19 vaccines sales would be $2.5 billion.

The Defense Production Act (DPA) of 1950 states:


The security of the United States is dependent on the ability of the domestic industrial base to supply materials and services for the national defense and to prepare for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism within the United States.

Since the Covid hit the U.S., both the Trump and Biden administrations have used federal resource to address the pandemic. Trump committed $14 billion to pharmaceutical companies to develop a vaccine; Biden has committed nearly $15 billion.

In addition, both presidents have invoked the DPA to address very limited issues. As the Council on Foreign Relations notes, “Trump used the law to crack down on hoarding, limit exports of medical goods, and increase production of critical supplies. Biden has used it to speed up vaccination and testing efforts.”

The DPA can be invoked to prepare for and respond to “military conflicts, natural or man-caused disasters.” Neither Trump nor Biden invoked the Act to nationalized vaccine production to meet the needs of all Americans — nor people throughout the world, especially in lower-income countries.

Sadly, after 800,000-plus deaths, it’s clear that Americans are expendable in the face of Covid pandemic. Since January 17, 2020, when the first cases of Covid in the U.S. were identified, the Dow Jones Industrial Average (DJIA) was 29,348.10; on January 7, 2022, it closed at 36,236.47. Profits over people.


David Rosen is the author of Sex, Sin & Subversion: The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015). He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

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