posted on Dec, 3 2012 @ 08:14 AM
Business insider has posted a couple of charts showing exactly why our economy is such a mess nowadays. Corporate profits (you know those guys who are
whining that they will go out of business if they are taxed a couple of tics more) are at an all time historic high while we all suffer and guess
Wages as a percentage of the economy are at an all time low.
Coincidence, I think not.
These Two Charts Show How The Priorities Of US Companies Have Gotten Screwed Up
Sure, corporations did take a big hit in 2008, like the rest of us, but, unlike the rest of us, they've bounced back to soaring new profits like
never before while all the rest of us have been tightening our belts. Their claims that the business climate is too uncertain to create new jobs or
pay their workers a living wage are shown to be lies.
They've been milking this recession to keep the workers on edge, always fearful of losing their jobs during this period of economic uncertainty to
wring every last concession from those workers to increase their profits even further.
The process of cutting workers wages weakens the economy by taking away their customer base. It used to be that this model worked because they had
easy credit to make up for the workers low wages and provide them with the additional buying power to keep the economy afloat but, now with everybody
tightening their belts and drowning in debt and the banks unwilling to lend, their whole greedy system is set to fall around us all.
What's wrong is that an obsession with a very narrow view of "shareholder value" has led companies to put "maximizing current earnings
growth" ahead of another critical priority in a healthy economy:
The happiness and well-being of employees.
What those who obsess exclusively about profits forget is that one company's wages (costs) are other companies' revenues.
If American companies were willing to trade off some of their current earnings growth to make investments in wage increases and hiring, American
workers would have more money to spend. And as American workers spent more money, the economy would begin to grow more quickly again. And the growing
economy would help the companies begin to grow more quickly again. And so on.
But, instead, U.S. companies have become obsessed with generating near-term profits at the expense of paying their employees more, making capital
investments, and investing in future growth.
This may help make their shareholders temporarily richer.
But it doesn't make the economy healthier.
And, ultimately, as with any ecosystem that gets out of whack, it's bad for the whole ecosystem.
The whole system of focusing solely on shareholder value has perverted our economic system and created an atmosphere where the people at the top
forget what really keeps a strong economy chugging along; a strong middle class with the funds available to buy the products the corporations produce.
As the middle class is whittled away by corporate greed, the foundations of our economy are eroded away until the whole thing is on the precipice set