"In other words," says Jeff Madrick, "Occupy Wall Street’s
claim that 'We are the 99 percent' is dead on right."
"[C]orporate profits now constitute the largest share of the economy since 1929."1929, by the way, was the year of the Great Crash that ushered in the Great Depression."
[T]he Robber Barons may have kept money due to monopoly advantages and their power over workers. All the while they were adding to GDP by building oil and steel giants, railroads, and mass production companies from chewing gum to cars."Today’s people at the top exploit workers in somewhat different ways. . . . Wall Street helps creates a culture in which it is considered okay for a company to fire workers while giving its CEO a giant raise. . . . [M]uch else of what happens on Wall Street has nothing to do with the real economy, except to waste hundreds of billions of misdirected savings that are plowed back into useless speculation and casino-like gambling by the very rich on trades among themselves."
by KenI had wanted to take a close look at these two terrific pieces, and admire the way they interlock. Well, the way they interlock is pretty obvious, I think, and rather than have me summarize and paraphrase the pieces, I'm sure you'd rather read them yourself.
In case it's not obvious what Robert Reich means by "the basic bargain":
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.The basic bargain is over – not only at Ford but all over the American economy.
Meanwhile, I think of Jeff Madrick as a writer on economics who almost always guides us to the crux of matters, and you should really check out the way he zeroes in on the group we're calling the 1% ("In other words, Occupy Wall Street’s claim that 'We are the 99 percent' is dead on right.") -- or, really, the .1%, as we know -- in support of his basic proposition:
Though the situation is often described as a problem of inequality, this is not quite the real concern. The issue is runaway incomes at the very top—people earning a million and a half dollars or more according to the most recent data. And much of that runaway income comes from financial investments, stock options, and other special financial benefits available to the exceptionally rich—much of which is taxed at very low capital gains rates. Meanwhile, there has been something closer to stagnation for almost everyone else—including even for many people in the top 20 percent of earners.
But his more important point is that these latter-day "Robber Baron equivalents," as he describes them, are way worse than the old ones, who at least built something, produced dramatic increases in the GDP, whereas the .1%, while enriching themselves with their Wall Street-based games, simply suck wealth out of the economy.
Or, as Robert Reich would put it, they've smashed the former basic bargain, and in its place put . . . well, nothing.
AH, HECK WITH IT, LET'S LOOK AT GQ'S DECEMBER
LIST OF "THE 25 LEAST INFLUENTIAL PEOPLE ALIVE"Well, a few samples anyway. As writer Drew Magary explains: "For every Steve Jobs and every Warren Buffett, there's an equal and opposite nitwit who spent 2011 devouring attention and contributing nothing to productive society. We salute the great artisans of utter uselessness with the one celebratory year-end list you don't want to be on."
1. Tim PawlentyEvery election season produces a number of hilariously pointless candidates who have no chance of winning. Some of them have value as novelty items. Look! It's Alan Keyes, the token black Republican! And over there! It's David Duke! He's a racist! These are the fun, fringy candidates. The Sharpton Sector, if you will. Then there are folks like Pawlenty, who fail to register even as novelties. T-Paw (as he calls himself) spent much of 2011 as a six-foot-tall paperweight, an aggressively forgettable fellow perfectly suited to the role of debate filler. The $1 million he spent to lose the Iowa straw poll might as well have been burned in front of a group of orphans.
[
Editor's note: OMG, was that in
this election cycle that T-Paw thought he was a force-to-be-reckoned-with candidate?]
5. Team Spider-Man (Bono, the Edge, and Julie Taymor)Here's an amazing idea. Let's spend $65 million on a musical about Spider-Man, because kids who like Spider-Man and old Jewish tourists who like to go to Broadway shows are totally the same demographic. Now, we're going to need a batch of forgettable U2 B sides and a harness system designed by Lyle Lanley from
The Simpsons' monorail episode. And let's make sure there's a shoe-shopping number! Who's with me? It can't possibly fail!
24. John BoehnerThere once was a time when politicians openly courted the wingnut fringe of their respective parties to get their votes, then had the good sense to ignore those imbeciles once they took office. Those days are over. Boehner, who always looks like someone made him stay at work much longer than he wanted to, represents the self-fulfilling prophecy of open cynicism toward the U.S. government: a politician who was elected specifically to not give a shit.
25. President ObamaOkay, so we're cheating a bit with this one. He did order the raid that wiped Osama bin Laden off the face of the earth. But then he used that surplus of political capital to let everyone in Washington stick a boot in his ass. This is a man who should be the most transformational figure of the century. Hell, he promised to be that. Instead he wields all the power of a substitute teacher at night school.
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