Was anyone shocked to learn today’s news that while corporate profits have made a recovery, jobs and incomes have not? Shouldn’t we be used to these jobless recoveries by now?
The last two recoveries before this tepid one did not see large increases in jobs. It could be that economic bubbles hide excess labor that flourishing companies start to carry, so when the bubble bursts, millions of jobs go away permanently.
At each recession, businesses have learned how to make do with fewer workers. And as each year passes, the inequality-creating policies of low taxes on the wealthy, privatization of government services, union-busting and a low minimum wage have continued to erode the incomes and buying power of all but the top one or five percent of incomes.
This elixir of policies allows wealth to accumulate at the top and enables the owners of productive means to grab everyone’s share of a growing economy.
It used to be that when the economic pie grew, everyone’s slice got a little bigger. Now only the portion allotted by owners to themselves is growing.
The sequester is one small step in the squeezing of everyone else for the benefit of the rich. Congress and the President have decided that they no longer want to borrow money to pay for jobs and services that taxes used to finance before the Bush II tax cuts for the wealthy. Rather than raise taxes to pre-Bush levels to pay for these jobs and services, we are cutting them out. Meanwhile, the rich continue to count their tax savings.
The current trend can only go so far, however. Who will buy things if only the rich have money? Either enough businesses will realize that they need middle class customers to survive or we’ll have a 30’s-like depression and social protest movements will reach a level that scares the ruling elite into economic policies that produce a flatter income and wealth chart.
In the mean time, however, millions of people are going to suffer. And by suffer, I don’t mean not being able to buy the latest generation of smartphones or having to go to junior college for two years. I mean not having enough to eat or having a text book in high school classes and not having a library opened nearby. I’m talking about not being able to afford a doctor or medicine. I’m talking about homelessness and living on the edge and off the Internet grid.
Meanwhile the wealthy will eat cake—flourless chocolate, judging from the dessert trends in expensive restaurants nowadays.