Home > Political Economy > Honey, they shrunk our share

Honey, they shrunk our share

from David Ruccio

two charts 

source

The flip side:

source

  1. Georg R. Baumann
    June 17, 2011 at 1:05 pm

    Brilliant!

    Roughly, tripling from 200 bln to 600 bln in the decade 1990-2000, and then only 600 bln to 1,400 bln? Hmm, they did not manage to triple profits in the 2000-2010 decade. What went wrong? ;-)

    Seriously though David, how would you comment on this extraordinary raise 2000-2010?

  2. Peter Radford
    June 17, 2011 at 3:38 pm

    What I find extraordinary – and deeply disappointing – is that the skew shown in these charts has not engendered a popular reaction. Are voters so accepting of the relentless market dogma here that they fail to see an alternative? They are the ones being pounded. They are the ones being forced into debt to offset the lack of wage growth. And yet they don’t react.

    Or, perhaps, the Tea Party is a partial manifestation of anger.

    How long can this persist? Aren’t the capitalists eventually going to dry up the well of profit by starving the masses of spending power?

    Maybe that’s why the economy appears headed into stagnation. In which case those profits are in danger.

    • Commoner
      June 17, 2011 at 4:27 pm

      “Aren’t the capitalists eventually going to dry up the well of profit by starving the masses of spending power?”

      Perhaps business has found consumers other than the mass market, or thinks it has. See . . .

      http://prospect.org/cs/articles?article=business_is_booming

      http://inequality.org/us-middle-class-and-madison-ave/

      If so, then most of us are in truly dire straits barring something far better than the Tea Party.

    • Alice
      June 18, 2011 at 3:26 am

      Peter – says “How long can this persist? Aren’t the capitalists eventually going to dry up the well of profit by starving the masses of spending power?”

      Its playing out now because the capitalists cant give up their dogma of shrunken government, low taxes and then lower taxes for them…or the freedom and de-rgeulation to take it all offshore (production, profit. taxes, the lot) – and leave labour behind. Thats why the graphs look the way they look.

      Must have been great to be Greenspan and have a job as a senior economic adviser when you your only job was promoting doing nothing to get the US here, where it is now.

  3. Ken Zimmerman
    June 18, 2011 at 12:11 am

    Before 1950 the “middle class” did not exist in the US. It was invented and nurtured after WWII intentionally by people who believed the past distribution of wealth in the US was unfair, uneconomic, and unbecoming for the world’s greatest democracy and major superpower. That work was accompanied by the re-invention of civil rights, anti-poverty programs, expansions in public education, and tax rates that removed much wealth from the hands of the wealthiest Americans. But those who do not agree with the existence of a middle class (or these other activities); who see a vibrant and functional middle class as a weapon aimed at the heart of America have been working just as diligently since 1950 to undo the invention of that class and tax structure and wealth distribution that goes with it. Not that the middle class has been a stellar success. It has not been. It has been criticized as shallow, venal, and overly focused on appearances. So then the day of the middle class may be over. But that does not mean we want or ought to return to the economics, class structure, or community structures of pre WWII America. So as the “American Prospect” article asks, “What is to be done?” Germany provides a useful model, as do France and some of the Pacific Rim countries. But fitting any of these models into the stream of American history and culture would be difficult, maybe impossible. Using that history and culture as a guide, we need solutions that can do the following:
    1. Make most Americans hate and despise Jim DeMint, Paul Ryan, and other politicians that “work” to secure benefits mainly for the rich.
    2. Make most Americans react with disgust to American corporations that offshore to better their profits.
    3. Create popular support for much higher tax rates on the richest Americans.
    4. Make it popular to close corporate tax loopholes.
    5. Create wide support for making America a world leader again in all areas, from infrastructure to education (at all levels), from the democratic control of corporations to the need to help and support those with less income and opportunities, from the death penalty for corporate leaders who loot America to banking that serves the interests of all of America.
    For this to happen we need steel-minded and forceful policy makers and enforcers who accept no excuses for failure. President Dwight Eisenhower was one such. A conservative man by temperament and upbringing he nonetheless understood well the balance that makes America what it is (or was until the last 30 years). In a 1954 letter to his brother he wrote:

    Now it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions. I oppose this–in some instances the fight is a rather desperate one. But to attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything–even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon “moderation” in government. Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

    The last sentence seems to aptly fit our current circumstances.

  4. June 18, 2011 at 1:30 pm

    The superficial appearance is profits versus wages. The implicit reality requires factor analysis, but nobody does that any more – today’s economists say it’s antiquated.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.