Welcome To The New America

In an Opinion piece by Harold Meyerson, he quotes Michael Cembalest, chief investment officer of J.P. Morgan Chase, as saying

...the fact that profit margins (the share of a company’s revenue that goes to profits) of the Standard & Poor’s 500 companies are at their highest levels since the mid-1960s, despite the burdens of health-care costs, environmental compliance and other regulations that are presumably weighing down these large companies.

 This is no surprise.  It has been reported in many places that corporations are doing quite well, thank you.  They are sitting on tons of cash and profits are up.  Good evidence that money and profits do not create jobs, but I digress.

So, why are corporations doing so well despite being overwhelmed with taxes, regulations, uncertainty, unions, health care costs, etc, if you believe republicans, anyway?

Well, again, according to Cembalest,

Why the increase? “There are a lot of moving parts in the margin equation,” Cembalest writes, but “reductions in wages and benefits explain the majority of the net improvement in margins.” This decline in wages and benefits, Cembalest calculates, is responsible for about 75 percent of the increase in our major corporations’ profit margins.

Or, to state this more simply, profits are up because wages are down.

He asserted in the July 11 edition of “Eye on the Market,” the bank’s regular report to its private banking clients, if you are interested in more details.

So why have wages and benefits declined?  Meyerson suggests that "the great majority of American employers no longer have to sit down and hammer out collective bargaining contracts with their workers has contributed to the increase in profits at wages’ expense. And many of those employers want to keep it that way."

[snip]

"In the real America, union elections have declined 80 percent since 1970, as employers have become adept at delaying and opposing — often by illegally threatening their workers with job loss — their employees’ attempts to unionize. In the America of 2011, there are scarcely any union organizing campaigns. There are fewer union members: Just 7 percent of private-sector employees are unionized, down from 35 percent in the 1950s. And what was the last strike you recall? The strike as a bargaining tool for workers is now the province of professional athletes, the last American employees who have enough clout even to contemplate taking a walk."

Wow!  Athletes!  That's what we have come to.  You have to be a worker making a million dollars a year to be able to go on strike.


 Corporations have neutered the workers.  They are fat and happy.  Now they are poised to take over the government.  Welcome to the New America.

Corporate Profits And Jobs

If the above chart does not explain it enough, here are some numbers that I picked up over at Journey Home.

• Taxpayers will hand out nearly $100 billion in tax breaks and loopholes to oil and gas companies in the coming decades.
  
• Just in 2010 alone, the top five oil companies (the above four, plus ConocoPhillips) reduced their global workforce by a combined 4,400 employees, while making a combined $73 billion in profits. 
  
• Despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell and BP combined to reduce their U.S. workforce by 11,200 employees over that time
  
• every $1 billion of military spending costs anywhere between 3,200 and 11,700 jobs or more when compared to other ways of spending the money. 
  
• Overall, today’s clean economy establishments added half a million jobs between 2003 and 2010, expanding at an annual rate of 3.4 percent.
  
• Though modest in size, the clean energy and tech industries already employ more workers than the fossil fuel industry; some 2.7 million jobs spread across a diverse group of industries. 

Corporate profits do not create jobs.

Are You Hungry?

Here are some interesting statistics. 

I am not going to comment on them other than to say, think about these numbers the next time you bit into that big juicy steak. 

Number of people worldwide who will die as a result of malnutrition this year: 20 million
Number of people who could be adequately fed using land freed if Americans reduced their intake of meat by 10%: 100 million

Percentage of corn grown in the U.S. eaten by people: 20
Percentage of corn grown in the U.S. eaten by livestock: 80

Percentage of oats grown in the U.S. eaten by livestock: 95

Percentage of protein wasted by cycling grain through livestock: 90

How frequently a child dies as a result of malnutrition: every 2.3 seconds

Pounds of potatoes that can be grown on an acre: 40,000
Pounds of beef produced on an acre: 250

Percentage of U.S. farmland devoted to beef production: 56

Pounds of grain and soybeans needed to produce a pound of edible flesh from feedlot beef: 16

911

Who Pays Taxes?

How often have you heard the following statement, usually from republicans:

“It’s hard to have a fair tax system where only about half the people are paying,”

If you believe republicans, half the people in the US are deadbeats and living off the hard work of the other 50%.

Want the truth? 

Here's the short answer:

"81.9% of the population pays federal taxes based upon income or payroll, and of the remaining 18.1% that don't, 95% of those are elderly or very poor."

Want the long answer?  Read it here.

God Speaks!

Nearly 500 homes destroyed by fire in Texas.

I think God is speaking to Perry and telling him to get out of the presidential race.

The Impact of 30 Years of Reaganomics

Here's a chart that I picked up over at Green Eagle.  It is self-explanitory.

The Do Nothing Solution

That's right!  Let's DO NOTHING.

We hear lots of jawboning from both the right and the left about what needs to be do to solve the deficit/debt problem.  But wait!  Why do we have to do anything.  Check out the chart below.

If Congress does nothing, nothing at all, they just go home and sit on the porch, the deficit will go down to about 1% of GDP, and the debt falls from a peak of 73% of GDP to about 60% as shown in the figure below.

Also note that this "Do Nothing" performance is much better than if Congress extends all current (essentially Republican) policies.

Well, where do all these reductions come from?  As explained in the Center for American Progress article that has these figures,

• $1.2 Trillion dollars in spending cuts will be triggered if Congress does nothing,
• $3 Trillion dollars in revenue increases will occur when the Bush tax cuts expire,
• $2 Trillion dollars from Congressional inaction on the alternate minimum tax and the sustainable growth rate formula in Medicare.

Obviously, doing something is better than doing nothing.  Right?  Well, let's take a look at what is being proposed.

• The president's fiscal commission "would leave the country with about $1 trillion in additional debt compared to simply doing nothing"
•  The republican budget plan passed by the House "would incur approximately $1.5 trillion more debt than doing nothing at all".

So, right now, if your goal is to reduce the deficit/debt, the best plan out there is for Congress to go home and sit on their collective asses because they are only going to make it worse.

Republicans VS Democrats

Look at the following three figures that I picked up over at Campaign For America's Future, and tell me who is better for our economy and our country.

New Name For Rick Perry

I just saw this over at Immoral Minority and had to repeat it.  Rick Perry is now known as:

P-RICK