Sunday, April 8, 2012

Despotism


In Executive Pay, a Rich Game of Thrones. The New York Times. By Natasha Singer

[excerpted] "Among the 100 top-paid C.E.O.s, overall pay last year rose a scant 2 percent from 2010.

• The median chief executive in this group took home $14.4 million — compared with the average annual American salary of $45,230.

• In all, the combined compensation of these 100 C.E.O.s totaled $2.1 billion, the rough equivalent of the estimated annual economic output of Sierra Leone...."

VERSUS

Welfare Limits Left Poor Adrift as Recession Hit. The New York Times.

[excerpted] "Just one in five poor children now receives cash aid, the lowest level in nearly 50 years.

As the downturn wreaked havoc on budgets, some states took new steps to keep the needy away. They shortened time limits, tightened eligibility rules and reduced benefits (to an average of about $350 a month for a family of three).

Since 2007, 11 states have cut the rolls by 10 percent or more...

...the number of very poor families appears to be growing. Pamela Loprest and Austin Nichols, researchers at the Urban Institute, found that one in four low-income single mothers nationwide — about 1.5 million — are jobless and without cash aid. That is twice the rate the researchers found under the old welfare law. More than 40 percent remain that way for more than a year, and many have mental or physical disabilities, sick children or problems with domestic violence."

MAJIA HERE: I'm not suggesting that everyone should be payed the same amount.

However, I do feel that anyone who wants to work should be able to work. Government and industry should cooperate to ensure full employment.

Wages should be adequate to enable people to pay for living expenses and government should ensure that children of working parents are cared for in quality day cares, not run-down, dangerous facilities with poorly trained staff.

Instead, government has subordinated public purpose to corporate interests:

Government prioritization of corporate interests over public welfare during the financial crisis was reflected in the lopsided allocation of funds to banks, including the bailout of investment banks that should not have been eligible for relief, and the unlimited backstopping of AIG’s credit default swaps while average Americans, who saw work hours and income collapse, received little-to-no support. 

During the height of the great financial crisis, secret Federal Reserve loans to the biggest banks totaling $7.7 trillion enabled them to reap $13 billion in profits . U.S homeowners, who faced around $6.5 million in delinquent and foreclosed mortgages, saw little to no relief.”  In 2009, Graham Bowley reported in The New York Times that the federal financial “bailout helps fuel a new era of Wall Street wealth” enabling “hefty bonuses” to corporate Wall Street executives.  Goldman Sachs alone received $70 billion in combined funds from TARP, the Federal Reserve, AIG, and the FDIC.   As of 2010, six U.S. banks, held assets in excess of 63 percent of the U.S. Gross Domestic.  

Perhaps most telling, the US government largely declined to prosecute those financial agents responsible for the crisis within these monopolists, many of which profited from rampant foreclosure fraud in the wake of the crisis.  Reflecting on these data, Economist Simon Johnson observed: "The US increasingly displays characteristics that we have seen many times in middle-income “emerging markets” – new dimensions of vast inequality, forms of financial instability that benefit the best connected, and consistently easy credit for the privileged."    

Growing inequality stifles post-recession recovery. While U.S. corporate profits have reached unprecedented levels, both in absolute dollars and as a share of the economy, unemployment is at its highest level since the Great Depression.  Over one half (fifty-five percent) of Americans’ wages were affected in the forms of job layoffs, wage and hour cut backs, and unpaid furloughs during the recession years of 2007 to 2009. Thirty-two percent of Americans reported unemployment during that period. On average, U.S. citizens lost twenty percent of their household wealth from 2007 to 2009 (Pew Research Center, 2010).  Data published in 2011 indicate that fourteen percent, or one in six Americans, lives below the official poverty threshold.  

The losses of household wealth, wages, and benefits are ongoing and point to the growing impoverishment of the nation at the same time that the federal government is proposing widespread cuts in social spending, particularly in the area of health (but not military spending or financial bailouts). 
 
The consolidation of wealth in a few corporations and the lopsided US government response to the financial crisis are symptomatic of a political-economic regime within the country that has little regard for the welfare of the vast majority of population. Globalization, automation, financialization and growing inequality have lessened elite dependence upon the labor and consumption power of western, industrial populations. Globalization enables corporations to outsource production abroad wherever labor costs are lowest. Automation replaces workers in all industrial sectors. Financialization allows the creation of value outside of manufacturing and services through rent-seeking activities and high-frequency trading. Inequality reduces consumption power. For instance, in 2011, Citigroup estimated that luxury shoppers in the US earn 50 percent of the total income and make 48 percent of total expenditures...

             Bob Ivry, Bradley Keoun and Phil Kuntz . Secret Fed Loans Helped Banks Net $13B. Bloomberg.com (2011, November 27): http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html.

      Bradlye Keoun and Phil Kuntz “Wall Street Aristocracy Got $1.2 Trillion From Fed,” Bloomberg (2011, August 22): http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html

      Graham Bowley “Bailout Helps Fuel a New Era of Wall Street Wealth,” The New York Times (2009, October 17): http://www.nytimes.com/2009/10/17/business/economy/17wall.html?_r=1&th&emc=th

      Dylan Ratigan “Goldman Sachs' Black Magic, Here's How They Did It,” The Huffington Post (2009, October 16): http://www.huffingtonpost.com/dylan-ratigan/goldman-sachs-black-magic_b_324095.html

      Bill Moyers, Simon Johnson and James Kwak Bill Moyers Journal [on-line] (2010, April 16): http://www.pbs.org/moyers/journal/04162010/profile.html.

      Simon Johnson “Who is Carlos Slim,” Baseline Scenario (2009, October 17): http://baselinescenario.com/2009/10/17/who-is-carlos-slim/.

 
      National Family Farm Coalition. “Food, Inc. and Fresh: Facts and Solutions Needed to Fix the Food System.” NFFC.Net (no date): http://www.nffc.net/Learn/Fact%20Sheets/food%20inc%20and%20fresh.pdf.

      Robert Lezner. “Capital Gains: Top .1% Earn ½ Capital Gains. Forbes (2011, Nov 20):
http://www.forbes.com/sites/robertlenzner/2011/11/20/the-top-0-1-of-the-nation-earn-half-of-all-capital-gains/.

      Ellen Byron and Karen Talley "Luxury Sales at Risk," The Wall Street Journal (2011, August 10): B1

      Henry Blodget. “Here Are Four Charts That Explain What The Protesters Are Angry About...”Business Insider (2011, Oct 15): http://www.businessinsider.com/here-are-the-four-charts-that-explain-what-the-protesters-are-angry-about-2011-10?utm_source=twbutton&utm_medium=social&utm_campaign=bi#ixzz1b3DqeIBh.

      Pew Research Center. “The Great Recession at 30 Months.” Pew Research Center [on-line] (2010, June 30). Available: http://pewresearch.org/pubs/1643/recession-reactions-at-30-months-extensive-job-loss-new-frugality-lower-expectations.

      Frances Fox Piven. “The War Against the Poor.” TomDispatch.Com (2011, Nov 6): http://www.tomdispatch.com/post/175463/tomgram%3A_frances_fox_piven%2C_the_war_on_the_home_front/#more).

      McKinnon, J. D. (Deficit panel stresses spending cuts. The Wall Street Journal (2010, July 1): A6.

      Ellen Byron and Karen Talley "Luxury Sales at Risk," The Wall Street Journal (2011, August 10): B1


 



No comments:

Post a Comment