In case you were wondering where all the money went and why the economy is still in the doldrums, here are a couple of clues. “The 500 largest non-financial companies are sitting on $1.8 trillion in uninvested cash.” That’s a stat from Fareed Zakaria in Newsweek, quoted by Paul Buchheit in a 7/22 CommonDreams essay. The piece goes on to note that whereas the Republicans blame big government’s lavish spending on the poor, the truth is quite a different story: IRS figures report that “the richest 1% have TRIPLED their cut of America’s income pie” since 1980 (that’s when Reagan began cutting taxes for the rich, and blaming “welfare queens” and big government for everything). From taking 1 out of every 15 income dollars, the rich now take 3 of every 15 income dollars, or a TRILLION extra dollars a year. Put another way, instead of taking $7 of every $100 of America’s income, the rich now take $20 of every $100.
If this sounds like class war, it is, only it’s the rich doing the firing (literally).
Then there’s this, from Bob Herbert’s Sunday column. Top corporations (you know, the guys who have been declared to be “persons” by the Supreme Court, and thereby free to pour as much money—it’s free speech!—as they like into buying politicians) have been using the economic collapse to fire workers in droves. Those who are left are forced to take pay cuts, or else. Here are the stats:
“from the 4th quarter of 2007 to the 4th quarter of 2009, real aggregate output in the U.S., as measured by GDP, fell by about 2.5% but employers cut their payrolls by 6%.”
Worse, when the economy started to rebound (due to that evil government stimulation), the corporations somehow forgot to start hiring again. Herbert quotes economics Prof. Andrew Sum this way:
“At the end of the 4th quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go DOWN by $122 billion.”
In other words, the corporations are “making out like bandits” and, as Fakaria noted, sitting on mountains of cash, saved from not rehiring workers. As Prof. Sum writes: this economic recovery “has seen the most lopsided gains in corporate profits relative to real wages and salaries in our history.”
Meantime, the Republicans blame Obama and the Democrats for a “jobless” recovery (demanding lower taxes to stimulate hiring; more “trickle-down”—that’s what we need!). And the electorate appears ready to do the same thing.
Isn’t our capitalist democracy a wonder?