Home > Cande = Conjecture & Exaggeration, Fande = Fact & Evidence, The Economy > The Superwealthy Scam of millionaires and billionaires skimming profits off the backs of hard-working Americans…it’s Corporate Serfdom for the majority of U.S.

The Superwealthy Scam of millionaires and billionaires skimming profits off the backs of hard-working Americans…it’s Corporate Serfdom for the majority of U.S.

Don Peck, of The Atlantic magazine, bringing the Fande! Mr. Peck’s new book is called Pinched: How the Great Recession Has Narrowed Our Futures & What We Can Do About It.

source: http://www.theatlantic.com/magazine/archive/2011/09/can-the-middle-class-be-saved/8600/

EXCERPTS:

“Yet for all their outsize presence, multinationals [corporations] have been puny as engines of job creation. Over the past 20 years, they have accounted for 41 percent of all gains in U.S. labor productivity—but just 11 percent of private-sector job gains. And in the latter half of that period, the picture grew uglier: according to the economist Martin Sullivan, from 1999 through 2008, U.S. multinationals actually shrank their domestic workforce by about 1.9 million people, while increasing foreign employment by about 2.4 million…. 

‘The Great Recession has quantitatively but not qualitatively changed the trend toward employment polarization’ in the United States, wrote the MIT economist David Autor in a 2010 white paper. Job losses have been ‘far more severe in middle-skilled white- and blue-collar jobs than in either high-skill, white-collar jobs or in low-skill service occupations.’ Indeed, from 2007 through 2009, total employment in professional, managerial, and highly skilled technical positions was essentially unchanged. Jobs in low-skill service occupations such as food preparation, personal care, and house cleaning were also fairly stable. Overwhelmingly, the recession has destroyed the jobs in between. Almost one of every 12 white-collar jobs in sales, administrative support, and nonmanagerial office work vanished in the first two years of the recession; one of every six blue-collar jobs in production, craft, repair, and machine operation did the same….
 
In 2007, the economist Alan Blinder, a former vice chairman of the Federal Reserve, estimated that between 22 and 29 percent of all jobs in the United States had the potential to be moved overseas within the next couple of decades. With the recession, the offshoring of jobs only seems to have gained steam. The financial crisis of 2008 was global, but job losses hit America especially hard. According to the International Monetary Fund, one of every four jobs lost worldwide was lost in the United States….

Edmund Phelps and Leo Tilman, professors at Columbia University, have proposed the creation of a National Innovation Bank that would invest in, or lend to, innovative start-ups—bringing more money to bear than venture-capital funds could, and at a lower cost of capital, which would promote more investment and enable the funding of somewhat riskier ventures. The broader idea behind such a bank is that because innovation carries so many ambient benefits—from job creation to the experience gained by even failed entrepreneurs and the people around them—we should be willing to fund it more liberally as a society than private actors would individually.

Removing bureaucratic obstacles to innovation is as important as pushing more public funds toward it. As Wall Street has amply demonstrated, not every industry was overregulated in the aughts….

Over time, the United States has expected less and less of its elite, even as society has oriented itself in a way that is most likely to maximize their income. The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000, and is now 35 percent. Income from investments is taxed at a rate of 15 percent. The estate tax has been gutted….

High earners should pay considerably more in taxes than they do now. Top tax rates of even 50 percent for incomes in the seven-figure range would still be considerably lower than their level throughout the boom years of the post-war era, and should not be out of the question—nor should an estate-tax rate of similar size, for large estates….

None of the tax changes recommended here would create an excessive tax burden on high earners. If a few financiers choose to decamp for some small island-state in search of the smallest possible tax bill, we should wish them good luck….

The rich have not become that way while living in a vacuum. Technological advance, freer trade, and wider markets—along with the policies that promote them—always benefit some people and harm others. Economic theory is quite clear that the winners gain more than the losers lose, and therefore the people who suffer as a result of these forces can be fully compensated for their losses—society as a whole still gains. This precept has guided U.S. government policy for 30 years. Yet in practice, the losers are seldom compensated, not fully and not for long. And while many of the gains from trade and technological progress are widely spread among consumers, the pressures on wages that result from these same forces have been felt very differently by different classes of Americans.

What’s more, some of the policies that have most benefited the rich have little to do with greater competition or economic efficiency. Fortunes on Wall Street have grown so large in part because of implicit government protection against catastrophic losses, combined with the steady elimination of government measures to limit excessive risk-taking, from the 1980s right on through the crash of 2008.

As America’s winners have been separated more starkly from its losers, the idea of compensating the latter out of the pockets of the former has met stiff resistance: that would run afoul of another economic theory, dulling the winners’ incentives and squashing their entrepreneurial spirit; some, we are reminded, might even leave the country. And so, in a neat and perhaps unconscious two-step, many elites have pushed policies that benefit them, by touting theoretical gains to society—then ruled out measures that would distribute those gains widely.

Even as we continue to strive to perfect the meritocracy, signs that things may be moving in the other direction are proliferating. The increasing segregation of Americans by education and income, and the widening cultural divide between families with college-educated parents and those without them, suggests that built-in advantages and disadvantages may be growing. And the concentration of wealth in relatively few hands opens the possibility that much of the next generation’s elite might achieve their status through inheritance, not hard or innovative work….

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Read more…

source: http://motherjones.com/politics/2011/06/speed-up-american-workers-long-hours?page=1

EXCERPT:

‎”Yes, year after year, Americans wring even more value out of each minute on the job than we did the year before. U-S-A! U-S-A!

Except what’s good for American business isn’t necessarily good for Americans. We’re not just working smarter, but harder. And harder. And harder, to the point where the driver is no longer American industriousness, but something much more predatory….

Consider a recent Wall Street Journal story about ‘superjobs,’ a nifty euphemism for employees doing more than one job’s worth of work—more than half of all workers surveyed said their jobs had expanded, usually without a raise or bonus.

In all the chatter about our ‘jobless recovery,’ how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.

This is nothing short of a sea change. As University of California-Berkeley economist Brad DeLong notes, until not long ago, ‘businesses would hold on to workers in downturns even when there wasn’t enough for them to do—would put them to work painting the factory—because businesses did not want to see their skilled, experienced workers drift away and then have to go through the expense and loss of training new ones. That era is over. These days firms take advantage of downturns in demand to rationalize operations and increase labor productivity, pleading business necessity to their workers.’

How does corporate America have the gall? You pretty much know the answer, but for official confirmation let’s turn to Erica Groshen, a vice president at the Federal Reserve Bank of New York: It’s easier here than in, say, the UK or Germany ‘for employers to avoid adding permanent jobs,’ she told the AP recently. ‘They’re less constrained by traditional human-resources practices [translation: decency] or union contracts.’ In plainer English, here’s Rutgers political scientist Carl Van Horn: ‘Everything is tilted in favor of the employers. The employee has no leverage. If your boss says, ‘I want you to come in the next two Saturdays,’ what are you going to say—no?’

And lest CNBC hornswoggle you, this is not just a product of the recession. Throughout the past decade, salaries stagnated and workloads grew, but Wall Street’s bubble allowed us to drown our sorrows in credit. (Sure, I’m working crazy hours and our pension fund is history, but check out my granite countertop!) Then came the crash, and the speedup…speeded up….

Even among college grads, unemployment is twice what it was in 2007, and those statistics don’t take note of all the B.A.’s stocking shelves and answering phones. McDonald’s recently announced that it had gotten more than a million applicants for 62,000 new positions. Enough said.

Meanwhile, what’s passed off as the growing pains of a modern economy is—not to go all Marxist on you—simply about redistribution. For 90 percent of American workers, incomes have stagnated or fallen for the past three decades, while they’ve ballooned at the top, and exploded at the very tippy-top: By 2008, the wealthiest 0.1 percent were making 6.4 times as much as they did in 1980 (adjusted for inflation). And just to further fuel your outrage, that 22 percent increase in profits? Most of it accrued to a single industry: finance.

In other words, all that extra work you’ve taken on—the late nights, the skipped lunch hours, the missed soccer games—paid off. For them….

European companies face the same pressures that ours do—yet in Germany’s vigorous economy, for example, six weeks of vacation are de rigueur, weekend work is a last resort, and companies’ response to a downturn is not to fire everyone, but to institute Kurzarbeit—temporarily reducing hours and snapping back when things start looking up (PDF). Sure, they lag ever so slightly behind us in productivity. But ask yourself: Who does our No. 1 spot benefit?

Exactly. So maybe it’s time to come out of the speedup closet. Rant to a friend, neighbor, coworker. Hear them say, ‘Me too.’ That might sound a little cheesy, and it’s not going to lance Mitch McConnell from the body politic of America. But if you’re in an abusive relationship—which 90-plus percent of America currently is—the first step toward recovery is to admit you have a problem.”

source: http://www.nytimes.com/2011/08/13/opinion/blow-genuflecting-to-the-tea-party.html?src=ISMR_AP_LO_MST_FB

EXCERPT:

“I must confess that every time Representative Michele Bachmann uttered the phrase ‘as president of the United States’ during Thursday’s Republican presidential debate I blacked out a little bit, so I’m sure that I missed some things.

But one thing that I didn’t miss was the moment when all the candidates raised their hands, confirming that they felt so strongly about not raising taxes that they would all walk away from a hypothetical deficit-reduction deal that was as extreme as 10 parts spending cuts to one part tax increases.

That moment should tell every voter in America everything about this current crop of Know-Nothings — no person who would take such a stance is fit to be president of the United States or any developed country.”

source: http://www.nytimes.com/2011/08/13/opinion/magical-unrealism.html?hp

“That has been the nature of every Republican debate this cycle: deny the truth or tell an outrageous lie with such bellicosity that no one dares to challenge it.”

source: http://thecaucus.blogs.nytimes.com/2011/08/11/fact-check-the-republican-debate/?hp

EXCERPTS:

“Representative Michele Bachmann of Minnesota repeated her assertion that ‘we should not have increased the debt ceiling’ — which would have led the nation to default.

Mrs. Bachmann misrepresented the debt ceiling deal when she complained that Congress had given a ‘blank check’ to President Obama by raising it. The debt limit had to be raised to pay for the bills that Congress had already approved, not future spending. And the final deal required reducing the deficit by some $2.1 trillion over the next decade.

Her gloss of the warning issued by Standard & Poor’s, the agency that lowered the nation’s rating, was off as well. ‘When they dropped our credit rating, what they said was we don’t have an ability to repay our debt,’ she said.

That is not what it said. Standard & Poor’s has carefully avoided partisan finger-pointing in its comments. But some of the factors it cited — from the ‘political brinkmanship’ that left the nation at the precipice of default to its concerns that the deficit-cutting deal ‘falls short’ of what is needed — can be attributed to Republicans in Congress as much as, or even more than, President Obama.

The ratings agency lamented in its report on the downgrade that ‘the statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.’

It was Republicans in Congress who made it a bargaining chip. They balked at raising the debt limit unless the White House agreed to a new package of spending cuts. The Obama administration initially sought a ‘clean’ bill to raise the debt limit, but the Republicans prevailed.

When a bill to reduce the deficit and raise the debt ceiling was finally passed this month, the nation was just hours away from a default that economists warned would have harmed the fragile economy.

Of course, President Obama acted similarly to Mrs. Bachmann when he was in the Senate: he voted against raising the debt limit in 2006, a vote his aides say he regrets.

But prominent economists and business leaders have said a failure to raise the debt ceiling would have led to a default that would have hurt the economy. Ben S. Bernanke, the Federal Reserve chairman, testified that it would probably be ‘a recovery-ending event.’

Several Republicans assailed President Obama at the debate for not cutting spending enough. Standard & Poor’s warned that the final agreement ‘falls short of the amount that we believe is necessary.’

But President Obama pushed for a plan to cut the deficit by more — $4 trillion, with cuts to entitlement programs including Medicare and Medicaid, as well as some $1 trillion in new revenues. It was House Republicans who rejected it, opposing any tax increases and ultimately pushing for the smaller measure.

Mrs. Bachmann claimed that the deal had led to only ‘$21 billion in illusory cuts.’ That was the amount projected for the very short term. The nonpartisan Congressional Budget Office found that the deal would cut the deficit by at least $2.1 trillion over the next decade.

Her complaint that the cuts were illusory also clashed with her own critique of the debt ceiling deal from last week, when The Des Moines Register quoted her as saying: ‘Under this debt-ceiling bill, do you know how this works? The first thing that gets whacked and with a hatchet is defense.’”

source: http://latimesblogs.latimes.com/showtracker/2011/08/late-night-jon-stewart-calls-foxs-megyn-kelly-a-hypocrite-.html

EXCERPT:

Jon Stewart: “They’re really only ‘entitlements’ when they’re something other people want. When it’s something you want, they’re a a hallmark of a civilized society, the foundation of a great people. ‘I just had a baby, and found out that maternity leave strengthens society, but since I still have a job, unemployment benefits are clearly socialism.”

* That’s sarcasm, folks.

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Remember: Republicans and Conservatives will lie, cheat and steal.

Fande = Fact & Evidence; Cande = Conjecture & Exaggeration

Bring your Fande, leave your Cande!

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