Remember the GOP bluster about President Obama's supposed hostility to business & how his "socialist" policies would drive companies into bankruptcy? Well, like so many GOP talking points this one was also false. Corporate profits are up 18.6% from last year and their after-tax profits represent the largest portion of GDP in history.
Profits accounted for 11.1% of the U.S. economy last quarter, compared with an average of 8% during the previous economic expansion. They fell as low as 4.6% of GDP during the recession.
Corporations are doing just fine and they should credit their workers for that. Unfortunately, most can't even be bothered to send even a simple thank you card - unless it's a pink slip - much less share the wealth with the people who produce their products and services.
Over the last year the average hourly wage for jobs in the private sector has gone from $23.12 an hour to $23.52 an hour, according to the Bureau of Labor Statistics. That represents a gain of 1.7%, slightly higher than inflation over roughly the same time period.
Hmmm.... 18.7% rise in profits and only 1.7% rise in wages.
Why aren't workers benefiting? Mainly because the unemployment rate remains high, which depresses both consumer spending and salaries. Without increased demand, companies are reluctant to hire and current employees are reluctant to ask for raises. After all,if your company knows that there are 10 people begging for your job, why give you a raise at all?
As the Hostess workers discovered, even taking pay cuts won't save jobs. The company just pockets the savings, plunders the pension fund, and lays you off anyway.
The Economist noted in July:
Businesspeople are among the most vocal in their calls for government deficits to be cut, but if firms spent more, and hired new workers, deficits would fall of their own accord.
Who does this situation benefit? Big business. They took those "record" profits and funneled their dark money contributions into SuperPACs in an attempt to buy the election, thereby giving them the opportunity to rig the system even more. And they haven't given up on that goal.
This is what's at stake in the "fiscal cliff" talks! The GOP leadership, dancing to the tune of their big money contributors, seems to think it can force the Democrats to accept Mitt Romney's economic plan as some sort of "compromise" on the budget. What they couldn't win in an election, they hope to gain by bluster and intransigence. Let's hope that turns out just as well for them as the election did.
The GOP may control the House, but that gang of misfit legislators that fills the caucus clown car received fewer votes as a whole than the smaller number of Democratic House members:
It can be a bit difficult to tally up the popular vote in House elections because you have to go ballot by ballot, and many incumbents run unopposed. But The Washington Post’s Dan Keating did the work and found that Democrats got 54,301,095 votes while Republicans got 53,822,442. That’s a close election — 48.8%-48.5% –but it’s still a popular vote win for the Democrats.
The House GOP received no mandate in the last election. Redistricting saved their majority, so they're still totally capable of committing mass suicide - and taking the country with them - in these budget talks.
Make no mistake: the big money guys spent hundreds of millions and still couldn't buy the election. But it's totally within the Democrats' power to hand them a victory anyway. We have the upper hand in this and the ability to give a hand up to the middle class and America's beleaguered workers.
Now, if only our party leadership just has the spine to stand firm and stand up for us....