14 July 2011
The Center for Labor Market Studies at Northeastern University has released a study they have done on the economy. According to the researchers, the recession is over. They base this on a now growing Gross Domestic Product (GDP). The only problem with this is that the recession is not over for everyone.
Corporate profits have grown about 40% in the first seven quarters since the "end" of the recession (from the second quarter of 2009 to the first quarter of 2011). This is a growth of $465 billion. But none of this wealth has reached American workers. The rise in corporate profits has eaten up 88% of the growth in income since 2009. Meanwhile, the study says the median wage for workers is actually below what it was in 2009, and there has been no net growth in job creation (the few jobs created don't equal the number lost plus the number of new people entering the job market).
So the recession is over for the corporations (and some Wall Street investors), but the rest of America is still as bad off as they were during the height of the recession. Millions of people are out of work and those that do have jobs are seeing their buying power go down each year. And as usual, the Republicans want to cut taxes (and continue subsidies) for the corporations -- the only sector of the economy showing record growth in income (and it is record growth since that 88% of all income is the highest share of income ever recorded by corporations after a recession -- the previous high being 53%).
Obviously, the Republican's "trickle-down" economic theory is working just like it always has -- nothing is trickling down, either in wages or in jobs. Maybe it's time for someone to remind the Republicans of the saying that doing the same thing over and over and expecting different results is insane.
If they were serious about cutting the deficit (and the national debt), the Republicans would realize that the corporations need to share some of that record-setting new wealth with the rest of America, and the easiest way to do that is by raising their taxes (or eliminating some subsidies -- or both).
This has become so obvious that even a few honest Republicans are admitting that there needs to be some new revenue in the form of taxes. Ken Langone, a Wall Street investor and former head of the New York Stock Exchange (and large contributor to Karl Rove's new super-PAC), said recently, "Well I say this as a devout Republican. I think in these negotiations, I think number one guys like me, I've said this before, there's a caveat. I shouldn't get Social Security. I should pay more taxes."
And former Republican senator Alan Simpson says, "We're at 15 percent revenue, and historically it's been closer to 20 percent. We've never had a war without a tax, and now we've got two. Absolute bullshit."
This just shows the current Republicans in Congress are more interested in protecting corporate profits (and their own campaign donors) than in really dealing with the deficit or the debt. If they were serious about dealing with the deficit and debt, they would listen to the voices of reason within their own party instead of the teabaggers and corporate CEOs. Even their patron political saint, Ronald Reagan, raised taxes when it was necessary.
The budget can't be balanced on the backs of hurting Americans. Those making record profits (the corporations) must pay their fair share in taxes.
Posted by Ted McLaughlin