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"Golden Age for Corporate Profits" As Workers Get Whacked

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- 1870 days ago -
As across-the-board federal budget cuts go into effect and the "real pain" predicted by economists and policy experts begins to creep into the lives of everyday people--namely US workers--investors on Wall Street are saying: "bring it on."

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Kit B (276)
Tuesday March 5, 2013, 6:33 am
Poster / Illustration provided by Common Dreams

As across-the-board federal budget cuts go into effect and the "real pain" predicted by economists and policy experts begins to creep into the lives of everyday people—namely US workers—investors on Wall Street are saying: "bring it on."

Quoted in a New York Times article on Monday that describes the current economy as a "golden age for corporate profit," Savita Subramanian, who heads the equity and quantitative strategy for Bank of America Merrill Lynch, said that despite the terrible times for working people and warnings that nearly three-quarters of a million jobs could be lost this year in the US, "the market wants more austerity."

Reading the article prompted journalist and book author Naomi Klein to tweet:
****Tweets from Naomi Klein and New York Times available at VISIT SITE***

Responding directly to Subramanian's remark that a market push for "austerity" was a good thing for the overall economy, Mark Weisbrot, co-director of the Center for Economic and Policy Research, said such a comment made "no sense at all."

And Weisbrot agrees with Klein's observation that what's being observed should be broadly seen as a robbery by profit-bloated corporations of what should be economic gains more equitably shared with working people.

Though the "sequester" cuts are predicted to cut the growth rate this year by as much as .5 or .7 percent, what economic gains are made, Weisbrot says, "will likely continue to go to the rich, as they have for the past three decades."

As the Times points out, most of the profit gains made by multinational corporations since the 2008 crash have come because of increased productivity and government-backed lending that only larger firms can leverage. Neither of these gains, however—or the profits derived from them—are being shared with workers or lower-income, struggling Americans.

According to the Times:

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966.

And as Travis Waldron at ThinkProgress points out:

From 2009 to 2011, 88 percent of national income growth went to corporate profits while just one percent went to workers’ wages, and hourly earnings for workers actually fell over that time. And while they aren’t investing in job growth, corporations are also paying taxes at a rate that hit a 40-year low in 2011.

But what's the answer to fixing this continued trend where the gains steadily flow to the top?

According to Richard Eskow at the Campaign for America's Future, it begins with acknowledging the clear disparities and ends with actually introducing policies beneficial to working people. As he wrote recently in a piece titled the "Great Wealth Robbery":

The real “job creators” aren’t the ultra-wealthy. If they could create jobs with all their added wealth, they would have done it already. The real job creators are working people with jobs.

They don’t invest their money in hedge funds or stash it in offshore accounts. They spend it: on food, transportation, their kids’ education, maybe a night at the movies … And then other people get jobs making those things possible.

We have a working model to follow: The USA in the 35 years after World War II. As Paul Krugman says, “To the extent that people say the economics is confusing or uncertain, that’s overwhelmingly because people want it to be.” We know how to do this.

Raising the minimum wage is a start. A maximum wage would help, too, by reducing CEOs’ incentives to emphasize quarterly gains over long-term growth and leaving more to be shared with employees.

We also need a national strategy for regaining the more reasonable distribution of income this country had in the 1950s. We need to ensure that the door of opportunity, which is closing every day for millions of young people, is opened again. And we need to ask the wealthiest to really pay their fair share – at something closer to the top tax rates of the 1950’s or 1960’s. [...]

Most of all, we need to educate those around us so they understand what’s happening. That includes the well-intentioned well-to-do, who might do more to end the problem if they knew it existed. After all, you can’t stop a robbery until you know it’s happening.

By: Jon Queally, staff writer | Common Dreams |

Kit B (276)
Tuesday March 5, 2013, 6:38 am

I was accused of disliking Mitt Romney only because he is republican. I don't look first at a party and second at the candidate, or maybe I should say I have not in the past. Today's group of looney tunes Congressional leaders are not deserving of any respect. When making a political point is more important than the welfare of the country, more important than allowing able bodied folks to earn a living, more important to save a few bucks for the very, very wealthy than keeping a structured development of recovery on track, than yes, I will begin to judge first by the choice of party affiliation.

David C (147)
Tuesday March 5, 2013, 6:53 am
wealth creates greed........greed creates injustice and destruction

JL A (281)
Tuesday March 5, 2013, 9:42 am
I am dreaming of the Midas touch working on them as it did on Midas...and then we fill up Fort Knox.

Kit B (276)
Tuesday March 5, 2013, 10:26 am

Fort Knox has not been filled for some time, I do believe their room for your charges J L.

Kit B (276)
Tuesday March 5, 2013, 10:29 am

**there is room....***

Gene J (290)
Tuesday March 5, 2013, 10:38 am
"Responding directly to Subramanian's remark that a market push for "austerity" was a good thing for the overall economy, Mark Weisbrot, co-director of the Center for Economic and Policy Research, said such a comment made "no sense at all."

Austerity is the ONE thing guaranteed to crash our economy and plunge us back into recession. And republicans know it. They were NEVER in favor of it until a Democrat became president. Nixon said "we are all Keynesians now" as he used those principles during his administration and so did Reagan and both Bush's, all the while supported by the republican rank and file. Now that we have such champions as McConnell and Boehner around, it is a bad idea. But it wouldn't have been had Romney been elected. Oh, I know that could never have happened, but still, they'd be singing a different tune had he been. And the hypocrites know it.

Kit B (276)
Tuesday March 5, 2013, 10:43 am

Shh...Gene as long as we don't use the word Austerity it isn't real.

Wayne W (12)
Tuesday March 5, 2013, 11:37 am
Thank you, Kit. The points in the article can't be emphasized enough. Demand is what creates jobs. Money in the hands of the middle class is what creates demand. Continuing attacks on working families and unions since the Reagan years have flattened the income growth of the middle class. It's axiomatic that middle class income rises and falls with union membership. Union membership is at an 80 year low now.

I wonder how many realize that austerity could well increase the debt, probably as likely as not, depending on how austerity is implemented. Austerity misery, bigger debt, crackpot economics. This is the the GOP platform.

Kit B (276)
Tuesday March 5, 2013, 12:02 pm

True Wayne but due to lack of vision, the Grand Old Poopieheads think they have a WIN in their corner, Not that anyone expects them to later step forward and take responsibility for this total load of crap that will have disastrous affects on the economy.

Angelika R (143)
Tuesday March 5, 2013, 5:55 pm
and most scary they just might get that win if they can manage to convince the majority that the misery ahead is solely Obama's fault. Polls lately around sequester time already started to show that tendency.They won't give a rats butt if the economy crashes and people starve or commit suicide as long as they have their scapegoat to blame and they won't stop this for the next years to come. We know about repubs brain function, that includes their memory AND that of their loyal voters.


Sheryl G (363)
Tuesday March 5, 2013, 6:37 pm
The economy is or was adding jobs (now with sequester who knows) but most of those positions pay pretty poorly.

Some 58% of the jobs created during the recovery have been low-wage positions, according to a report by the National Employment Law Project. Only 22% have been mid-wage jobs and 20% higher-wage positions.

A report from the Department of Labor that showed more than half of displaced workers who lost their jobs during the recovery and found new ones were working for lower wages.

Only 46% of these re-employed, full-time workers were earning as much as they did at the jobs they lost. About one-third reported taking a pay cut of 20% or more.

And those are the so called fortunate ones who found a job again.


JL A (281)
Tuesday March 5, 2013, 6:54 pm
Not counting those who are still receiving pay cuts, like CA's state workers Dandelion!

Helen Porter (39)
Tuesday March 5, 2013, 10:03 pm
My conception is that we, the People of Earth, have a lesson to learn. We must learn to receive to share and not for self alone. That's the trap of the filthy rich, (what an appropriate term) who want to receive for self alone. And they tell the poor, "We got ours. Now you get yours."

Problem is, only the wealthy were born with silver spoons in their mouths, all the necessary financial and social contacts, an excellent education provided, all the right backs to rub who, in turn, will rub their backs. This is only the creed of many...I did say many NOT all.....who say "I got mine. You get yours."

We all like to receive. And we all have something to give. However, without jobs, how can people give? Many of the greatest people who ever walked this Earth were born poor. Yet they have given much. So you "gimme....gimmee.." guys are robing yourselves when you rob the poor.

Our technology has made us one people. The greedy are ravaging, destroying our planet. If we survive, we will survive together. If we die, we die together.

I don't think even the wealthy have a space ship ready to " fly, fly away." And if they do, the word is already out."Earth and it's people are quarantined. Look what they did to their own people."

Esther Z (94)
Tuesday March 5, 2013, 10:23 pm
More austerity? Really? How is austerity working for Greece, France, England, and other European countries?
If anyone is interested, you should watch Rachel Maddow show, for March 5th, where she showed a graph of trending corporate profits( bullish) vs. Labor earnings(dead to bearish). It pretty much blows away the Repugs mantra that tax cuts for the "job creators" means more jobs for a hurting economy. Corporations today are reaching historical profits at the expense of the American worker. Most profits are being invested overseas, building markets for India, China and other third world countries; all cheap labor with hardly any regulations protecting the worker. As for so call austerity measures, austerity to a Republican, means cutting taxes, yet again, to "stimulate" the economy, and cutting any social program helping the working American, who is the victim of the labor practices of the very corporation enjoying a federal hand out through subsidies and lower corporate taxes. So, guess which group will be badly hurt by the sequester? it's not going to be the corporations enjoying those historical profits!

Judy C (97)
Wednesday March 6, 2013, 3:37 am
This article and all of you guys' comments are very accurate, and point out the futility of following the self-destructive path this country is on. We are collectively paying a price for the pursuit of materialism, and the alienation that goes with it. So many people are consumed with fear, and an impoverished mentality of survival. Our country is being run by criminals and psychopaths.

The type of Republicans who are running Congress now must see the lower classes as less than human in order to be as abusive as they are. Scapegoating is necessary to sustain this system. People seem to choose ignorance, as the world we thought we could dominate spirals out of control. The assumption of maintaining endless growth and progress is being revealed as delusional. The people are anesthetized by their various distractions and addictions, and for those who choose to be conscious, it's like watching a train wreck.

Maybe it will become necessary for a complete self imposed destruction of our system to occur, and then we can, hopefully, rise out of the ashes.

Kerrie G (116)
Wednesday March 6, 2013, 6:24 am
Noted, thanks.

Süheyla C (234)
Wednesday March 6, 2013, 9:51 am
Noted Thanks Kit .
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