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November 27, 2011 11:30 AM Proving the 99% right

By Steve Benen

When it comes to the circumstances that help drive the Occupy protests, Floyd Norris shines a light on a dynamic that speaks volumes. To put it simply, this just won’t do.

In the eight decades before the recent recession, there was never a period when as much as 9 percent of American gross domestic product went to companies in the form of after-tax profits. Now the figure is over 10 percent.

During the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy. Now the figure is below 44 percent.

For companies, these are boom times. For workers, the opposite is true.

To help drive the point home, the NYT ran a series of accompanying charts, including these two:

There’s just no way to spin this. We’re looking at an era in which, at least as a share of the larger economy, after-tax corporate profits have soared to levels unseen since we began keeping track, whole after-tax incomes have fallen to levels unseen in generations.

The previous record for corporate profits as a share of GDP was 8.98% — set in 1929. Last year, it was over 9.5%. This year, it’s over 10%.

It’s a Gilded Age that we’re apparently not supposed to talk about.

There is, of course, a political angle to all of this. It’s elected policymakers who help set tax rates, for example, and choose not to ask corporations to contribute a little more, despite record profits, despite extremely low corporate tax burdens, despite enormous public needs, and despite an enormous debt.

Republicans look at these conditions and, with a straight face, insist that more must be done to intensify these circumstances, and blame President Obama for creating an uncooperative climate for corporations. Andrew Sullivan’s reaction rings true:

Does this seem to you to be an era in which the president knows nothing about business and needs to get out of the way of the great American job-making machine by, er, cutting taxes even further? Or does it seem an era in which global corporations can make serious global money even when domestic workers are suffering, and where the obvious primary worry for any government would be the collapse of demand and risk of deflation at home? […]

That reality suggests a country veering fast into two countries, and one party, the GOP, proposing to accelerate the shift. I’d lean on the rudder right now somewhat toward getting revenues from those currently enjoying a boom, while the rest try slowly to recover from excessive debt. Not because I hate the successful, or despise the wealthy. But because that’s the obvious way to stabilize the polity and economy.

What’s obvious has no meaning to those who choose to be oblivious. Republicans not only fail to see this as a problem in need of attention, but condemn those who even mention it out loud as radical class warriors, hell bent on tearing the country apart.

If the American mainstream disagrees, it’s going to have a chance to say so in about 49 weeks.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • c u n d gulag on November 27, 2011 12:00 PM:

    Why can't Democrats pick up the disgraced scumbag John Edwards "Two America's" cry?
    They need to hammer the people over the head to show that the 1% isn't doing its share for the 99% of the rest of us?

    Oh yeah, could it be that they're almost all part of the 1%?

    The Democrats of old would have thrived in economic times like these.
    But, it's tough to watch and listen to some millionaire Whoreporatist talk about the peoples pain and think they mean it, let alone understand it.

    One party is stupid and f*cking heartless.
    The other party is feckless and f*cking clueless.

    The American Experiment is over - and "We the people" lost.

  • TCinLA on November 27, 2011 12:19 PM:

    Given that members of Congress - House and Senate - are able to vote on changes to the rules for Delaware-based corporations (you know, all the big ones?) that they are investors in, based on their ability to invest using insider information no one else can use, which is how they have all become millionaires in the same period of time that this economic situation has developed, does anyone here actually think we are going to get them to start voting against their own interests - which are not ours?

    "Representative government" - well, maybe if you're one of the one percent. The rest of us, not so much.

    We've done it to ourselves the same way the Romans did when they opted for Empire over Republic.

  • Ten Bears on November 27, 2011 12:34 PM:

    Two countries? It has long been my contention, for a variety of reasons, that we are devolving into a group of semi-autonomous, autonomous or even fully independent "Nation/States" centered upon economic, bio/geo ecological and cultural commons not unlike Joel Garreau's 1981 book the Nine Nations of North America. While thirty years out of context, Nine Nations is never-the-less a good background to our existing social divisions and a good indicator where we may be going (physics is everything, everything is physics. "wheels coming off" implies momentum, momentum implies an anticipation of where the wheels will go).

    My take, as an overly educated Mad Scientist, is we've reached a point of statistical saturation. We've grown so large, so diverse, that we have in essence become a perpetual motion machine bound by all the laws of physics (nature) to fail. How long it will take, how much agony we'll have to endure, is an open question. Revolution, devolution, secession are moot, are a boondoggle (look it up).

    Maintaining the status quo, trying to "fix" it or "save" it or even just trying to keep it from falling apart are fool's errands. It 's inevitable. What we need to be doing is figuring out how to get through it, and what we will be on the other side of it.

  • UnbiasedEye on November 27, 2011 12:37 PM:

    Eloquently put: those who choose to remain oblivious.

    I wish I knew how to wake the sleeping majority, whose crucial interests lie in what's obiviously fair and right and smart.

    The very wealthy and the corporate tycoons may not know it but they need the same intelligent, progressive tax system, and a government that's not a dirty word.

    ---

    unbiasedeye.com

  • Hedda Peraz on November 27, 2011 12:42 PM:

    Oblivious? Hardly. There are barnacles on my yacht.

  • stormskies on November 27, 2011 12:43 PM:

    WE the Corporations
    WE the oligarchy
    WE the self appointed Zarathustra's

    WE shit on all of you 'little people' ......... and smile as we do ..........

  • schtick on November 27, 2011 1:47 PM:

    The rich and the corporations have had record profits for the last 8 or 10 years, expecially since this recession and the middle class have had their wages cut, prices go up, and have lost a good chunk if not all, of their pensions/401ks/retirements.
    Then the sewer slugs that live for the rich to step on, spit on, and piss on, say the rich have all earned it because it's the American way to steal from everyone, get a big bonus for it and to be born into the wealth that allows you to rob everyone else and call it profit.
    And the sewer slugs repeat the talking points of the rich by saying everyone in the middle and lower class that are crying are lazy and want to live off the government while they are doing the same thing the people they are bitching about are. I would venture to guess even more so.
    But these same sewer slugs have no problem with the rich and big corporations getting welfare from the government nor with these elected idiots living off the government getting automatic raises every year and full benefits for themselves and their families nevermind the retirement after a few short years. It's the American way, yanno.

  • jjm on November 27, 2011 3:14 PM:

    Look, the wealthy can not dominate forever unless they can retain a hold over the popular imagination.

    The ruling class has to impose their tastes, lifestyles, etc. over those they ruled in order for them to maintain their powerful hold over them. The 'people' had to try to emulate the rulers. No amount of force, policing etc. could substitute for the psychological domination of the masses. It's easier to simply keep making themselves the center of all attention, and making people identify with them.

    Now, there are cracks. Not just a few critics here and there, or comedians making fun. The people are seeing the wealthy today for what they are: predators.

    Recently a stock trader who had lost his job complained bitterly to the NYT: "people just don't lionize us anymore, the way they used to." Another memo from CEOs worried that OWS was turning people off from glamorizing and idolizing CEOs.

    This is how the rule by corporations will end.

  • glenda yakel on November 27, 2011 5:02 PM:

    and you are saying the Democrats have nothing to do with it? Do you honestly believe rich Democrats don't have their companies in other countries? And why are they giving money out constantly and putting our kids in hock? Put blame where blame is do Both parties are full of it and need to go back and do what the American public not only needs but wants

  • bleh on November 27, 2011 6:54 PM:

    I mostly concur with glenda. Republicans are 100% with large corporations and very wealthy individuals, and the Democrats' loyalty is split. Look at the economic advisers Obama surrounds himself with -- Geithner, Summers -- look at the schizophrenia of Schumer, look at the personal wealth and social milieu of leaders like Pelosi.

    The Republicans have a clear mission, and the Democrats have divided loyalties. Put another way, the 1% have the Republicans fighting full-throttle for them, and the 99% have the Democrats sorta-fighting, with one hand tied behind their backs.

    Want to change it? Give money to the Elizabeth Warrens and Bernie Sanders of the world.

  • jjm on November 27, 2011 7:18 PM:

    @glenda yakel: You say "why are they giving money out constantly and putting our kids in hock?" And to whom are you referring when you say this? Who are the recipients of this money that they supposedly are giving out?

    Subsidies for oil companies with record-breaking profits?

    Just who put our kids in hock? Bush ran up our massive deficits then hampered our ability to pay for our debts with his tax cuts.

    What is putting our kids in hock is trying to sell them nothing but loans to live on after they massively indebt themselves on the hope that an education will better their chances of making a living. Just why do you think there are so many young, bright well educated people in OWS? Because the corporations are holding back jobs, salaries, and decent benefits for them.

  • MNRD on November 27, 2011 9:11 PM:

    It's quid pro quo. The Republican politicians push for extreme policies that enable the wealthy to gain a bigger and bigger percentage of the pie, and then the wealthy turn around and give a big part of that extra money to those politicians so that those politician will be reelected and continue to push for more extreme policies that will enable the wealthy to get an even bigger percentage of the pie. And so the cycle continues.

  • Anonymous on November 27, 2011 9:19 PM:

    income gap widened all over the developed world. Even in Europe and Japan.
    It's mainly from technologies and globalization. They made the world safer and closer together and lift so many people out of poverty in the developing world while developed world had to deal with aging population and income gap.

    that being said, income inequality was much more wider in US by far. As bad as Egypt or Mexico. that is where American political system failed.
    Countries like Sweden still enjoy relatively egalitarian middle class society with high minimum wages and great social safety net and high education. Sweden is also business friendly with lower, simple corporate tax.

    I think the biggest misguided notion from Republicans is that if you help the poor, you will lose your wealth. "If the bottom is up, the top will be down."

    But the opposite is true as a country grows better with collectively intelligent and secure population than a class society with high crimes and distrust.

    We need to be humble and learn from other countries as they used to learn from US in the past.

  • pea on November 27, 2011 11:28 PM:

    A large proportion of the workforce now is the boomers, who are probably near what should be the peak of their lifetime wage -- so the decline in % of GDP that is wages is doubly troubling it seems.

    the GOP is running a scan on the 99% and the Dems in power (part of the 1% mostly) are enablers.

    OWS needs to do more than occupy parks

  • Robert L. Miller on November 27, 2011 11:37 PM:

    Occasionally, the 99% resist the stupidity of the right. The proposed initiative to repeal the individual mandate as part of the 2006 Massachusetts health reform law has failed to gather enough signatures to be placed on the ballot in 2012. The "Massachusetts Against the Individual Mandate" (MAIM - hard to believe this acronym) could not get enough volunteers to obtain the 69,000+ signatures required. You can find more information about this story at this Web site:http://blog.hcfama.org/2011/11/23/individual-mandate-repeal-initiative-fail/.

  • jhm on November 28, 2011 6:49 AM:

    This, in a nutshell, shows the foolishness of the criticism of the Occupy protests that they offer no solutions. Leave aside that in reality, if anything, they are offering too many solutions (and the media can't be bothered to represent anything but pre-digested 30 second platitudes); these trends have been ongoing since before the 2000 election (and dot-com bust). As a whole the media have only rarely highlighted inequality, and the fact that they are doing so now is hardly unrelated to the protests. I would analogize it to a group standing up in a room and pointing out the window at a large speeding truck about to careen into the crowd (but only the cheap seats) and the announcers dismissing them because they're offering no solutions.

  • Sparky on November 28, 2011 7:59 PM:

    OUR GOVERNMENT FOR THE MOST PART IS RUN BY MONEY. THE BANKS AND WALL ST. CONTROL THE DECISIONS MADE IN THE FINANCIAL ARENA, BIG PHARMA and LARGE FOOD COMPANIES CONTROL THE FDA AND THE LIST GOES ON... WITHOUT CAMPAIGN FINANCE REFORM NOTHING IS GOING TO CHANGE. I SEE NO NEED TO BANTER BACK AND FORTH ABOUT OBAMA, PERRY, BUSH, KERRY, BERRY OR HARRY - IT DOES NOT MATTER AS OUR GOV'T HAS SOLD ITS SOUL AND THAT IS A FACT. DEM OR REPUB. IS NOT THE ISSUE AS MOST DO NOT WORK FOR THE PEOPLE ANYMORE. WHAT BOTHERS ME MOST IS THAT MANY PEOPLE CANNOT SEE THIS AND THEY ARE STILL HUNG UP ON DEM OR REPUB. - OBAMA OR WHOEVER. IT IS JUST A BIG SMOKESCREEN TO KEEP OUR EYES OFF THE REAL PICTURE AND THAT IS: MONEY AND POWER OWN THE IMPORTANT DECISION MAKING IN THE U.S. AND OUR CONGRESS DOES NOT MAKE DECISIONS BASED ON THE NEEDS OF THE PEOPLE WHO ELECTED THEM. YOU WANT DIRECTION FOR OWS..... CAMPAIGN FINANCE REFORM!

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