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:: For the people, or profits
Whose side is the government on?
By David Hoppe
Last week, as argument in Washington, D.C. dragged on over whether or not the nation would make good on its loans and how best to deal with its mounting debt, a story in The Indianapolis Star reported that Colts football team owner Jim Irsay was frustrated.
Irsay wasn't stressed about the lack of compromise in the nation's capital. He was troubled by his not yet having come to an agreement on a new contract with Colts quarterback Peyton Manning. Although Irsay had promised to make Manning the highest paid player in the National Football League, with an annual salary of $20 million, Manning was still mulling the deal.
Irsay groused that if he paid Manning more than $20 million, there wouldn't be enough money left to build a winning team.
No wonder Republicans are so adamant about not raising taxes on the richest Americans. If Jim Irsay's taxes were increased by five percent, the Colts might have to say good-bye to Reggie Wayne. Talk about a job killer!
The dirty truth underlying the political posturing on both sides of the government's recent debt and budget wrangling is that the entire debate has managed to sidestep doing anything about the sorry state of employment - especially the lack thereof - in America today.
Sure, both sides have paid lip service to "jobs." But the fact is that the structure of our economy, and the government policies supporting that structure, are increasingly stacked against working people, whether they happen to be hourly wage earners or salaried middle managers.
We keep hearing that profits will drive growth in business and result in new hires. Republicans go even further, asserting that the richest individuals shouldn't have their taxes raised because this will inhibit investment leading to economic expansion.
But this isn't what's happening. In fact, it's just the opposite. Corporate profits are up 22 percent since 2007, according to the Economic Policy Institute. But Paul Wiseman of the Associated Press reports that the U.S. job market is still the weakest among G-7 countries, with 5.4 percent fewer American jobs than there were in December 2007.
This is not an accident. Corporate America has discovered through the course of this so-called Great Recession that it can actually produce more with fewer people. As Steven Rattner, a former adviser to Barack Obama has observed: "Perversely, the nagging high jobless rate reflects two of the most promising attributes of the American economy: its flexibility and its productivity. Eliminating jobs - with all the wrenching human costs - raises productivity and, thereby, competitiveness."
According to Mark Provost in Truthout , over the past two years, U.S. corporate profits and share prices have risen at the fastest pace in history. But 2009 also showed the slowest wage growth on record, with the second slowest year following in 2010. Meanwhile, as Monika Bauerlein and Clara Jeffery note in Mother Jones , our productivity in 2009 increased at twice the rate it did in 2008, and twice as fast again in 2010.
So worker productivity and corporate profits are booming. Last week, in Indianapolis, giant health insurer WellPoint reported Second Quarter profits of $702 million; Dow AgroSciences' profits increased 18 percent, to $1.5 billion. And for months, numerous reports have indicated that, all told, Corporate America is sitting on over a trillion dollars in cash.
But neither the availability of ready cash, nor increased profits, nor, for that matter, the most advantageous tax rate since the 1950's, has made a significant dent in our high rate of unemployment. Not only that, those lucky enough to have jobs are finding themselves squeezed - being asked to take on the work of one or more missing co-workers.
This is something to keep in mind when we hear from government/corporate leaders that America just can't afford universal health care. Or that we have to cut Medicare and Medicaid. Or raise the age for Social Security eligibility.
Something else to consider is how it is our government and the politicians in both parties who ostensibly represent us seem to have come to the conclusion that their responsibility lies less with "the people" than with corporate boards and their shareholders. To those who claim that government does nothing well, take another look: through programs like the Troubled Asset Relief Program (TARP), the Public-Private Investment Program (PIPP) and the Term Asset-Backed Securities Loan Facility (TALF), government has indeed facilitated a boom in corporate profitability and productivity.
It's people like you and me who have been forgotten unless, of course, our names happen to be on a solicitation list for campaign contributions.
In his oral history of the Great Depression, Hard Times , Studs Terkel observed that many people in those days felt that, somehow, their economic misfortunes were their own fault. They felt guilty about losing jobs and not being able to provide for their families. The last thing they thought was that maybe what befell them had to do with the way the system was rigged against them.You could argue that it was these feelings of self-loathing that saved our capitalist system from a major overhaul. We'll see how guilty people feel this time around.