Record Corporate Profits and Record Ordinary Folks Suffering
Dec 1, 2010
By Steffen Schmidt
By Steffen Schmidt
In my recent Op Ed in the Ames Tribune I write that the New York Times reported this week that “Corporate Profits Were Highest on Record Last Quarter.” “American businesses 'earned' profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report.” This is the highest figure since the government started to keep statistics over 60 years ago.
I also wrote that with unemployment at record highs (almost 10%) since the Great Depression and many jobs permanently gone if this doesn’t make the average Joe and Jane mad as hell I don’t know what will.
Let me make a correction here. The 10% unemployment (9.5% really) is a government lie to make us feel that it’s not sooo bad. MoneyCentral.msn points out that “the Labor Department's statistics don't include the underemployed and those who have stopped looking for work. This alternative measure creates a much higher number.” That number is between 17% and 20%. Raghavan Mayur, president at TechnoMetrica Market Intelligence, which is a highly respected analytics firm, came up with a rate of 22% according to dailyfinance.com. http://srph.it/bjW9Zv
A Pew Research survey found more than half of all adults in the labor force had either lost a job or suffered a reduction in income because of the recession.
The teenage unemployment stands at least at 27.1 percent!
There are probably 20 million unemployed and over 50 million have lost their homes or are barely making their mortgage.
According to NANCY TSOU writing in the Lower Hudson news, the wars in Afghanistan and Iraq will cost us 4 to 6 TRILLION if we include all the cost including rebuilding the depleted weapons and taking long term care of the disabled veterans. The wars are still going on and costing us $3 billion per week, which comes to $428 million per day or $300,000 per minute.
For an “old school” political analyst like me American society has morphed into something I don't recognize and I certainly don't like.
I watched all the news media ranting about intrusive searches at airports and conducting deep analysis of what it means that Sarah Palin’s daughter Bristol did not win first place in Dancing with the Stars.
I saw no in depth reflection on what it means that the some of the very culprits responsible for the financial crisis and for the massive, and possibly irreversible taxpayer bailout of companies are now rolling in dough.
I heard very little about the fact that these same record breaking profit companies are not hiring more Americans and indeed continue to fire people to become more ”efficient” and “profitable.” In the United States “worker productivity” is now measured by how much work we can squeeze out of an employee while cutting their salary and benefits.
Yet there is very little pushback and hardly any “moral” outrage from anyone. Where are the religious leaders and clergy for whom this should be a moral dilemma of massive proportions? Where are the politicians who should be speaking truth to power and alarming us that down this path is the destruction of our middle-class-driven economy?
Then there was the additional story that Wall Street is once again in the money and that the fat cats are again splurging at fancy restaurants, at plastic surgeons and at Christies Auction House.
A woman who runs a Brooklyn-based insurance company was quoted in the New York Times saying “… that over the last two years she cut her annual spending on cosmetic surgery in half, to about $3,000.” ANNUAL spending for plastic surgery? I’m sure the insurance rates at her company went down over the past year don’t ‘ya think?
Are you mad as hell yet!
There was the real estate agent – a Ms. Lenz who told reporters that the summer rental market was heating up again and that she had three people bidding more than $400,000 for a summer rental in Southampton.
My first job as a professor was in the Hamptons. I love the Hamptons. The houses are magnificent and I could see the Great Gatsby’s house from my office. But in a time of great economic suffering and a country on its knees isn’t this just distasteful if not morally corrupt?
In their excellent book, Winner-Take-All Politics, political scientists Jacob Hacker and Paul Pierson, report that between 1979 and 2006, the bottom 20 percent of the US population had real income growth of .3 percent, the middle 20 percent real income growth of .7 percent, while the top 1 percent enjoyed real income growth of an incredible 260 percent. As Anthony Robinson puts it “The real story is the decline, even degradation, of the American middle class, which has gone from being the secure bulwark of American democracy and countless civic institutions to a social class where many are, as the saying goes, "just two pay checks from homelessness."
As I said in the Ames Tribune, maybe I am just out of it and don’t understand the new morality in America. Maybe it was always this way but everyone was getting enough of a slice of the pie, even if it was small, that these excesses did not matter. Maybe I need to retire and let someone who understands what’s happening to American write these Op Ed columns.
Or maybe I am right and anyone who does not find this state of affairs shocking and unacceptable is indifferent or just plain ignorant. Yeah, I think I’ll stick with my version of the story. This is all wrong for America.
Steffen Schmidt is University Professor of Political Science at Iowa State University and Senior Political Correspondent for InsiderIowa.com.