Monday, January 6, 2014

Robert Reich: The Great (Upward) Redistribution

To make Reich's long story short:

... And 2013 was a banner year for profits.

Robert Reich
Where did those profits come from? Here’s where redistribution comes in. American corporations didn’t make most of their money from increased sales (although their foreign sales did increase). They made their big bucks mostly by reducing their costs — especially their biggest single cost: wages.

They push wages down because most workers no longer have any bargaining power ...

... In the 1950s, over a third of private-sector workers were members of labor unions. Now, fewer than 7 percent are unionized.

All this helps explain why corporate profits have been increasing throughout this recovery (they grew over 18 percent in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic product — and wages the smallest share of GDP — than at any time since records have been kept.

Hence, the Great Redistribution.

Merely the workings of the "free market"? First, show me a free market; then maybe you can make that argument. Reich points out the ways in which government has put its thumb on the scales, to the benefit of corporations (hence investors, hence mostly wealthy people) and the detriment of their employees. This may be a zero-sum game, but it is far from a fair game. And it's the worst it's ever been in recorded American history. Just how far can the 1% push matters before the 99% collapses? and what happens then?

Off topic, tonight, Houston is forecast to experience a freeze down to 22°F. This morning, after last night's (apparent) 26°F freeze, the temperature has not exceeded freezing despite a partly sunny morning. The only thing saving us from utter misery is the lack of precipitation. Stella drove to work this morning... standing at bus stops in this weather is to be avoided. I can only hope the lack of rain continues until she gets home.

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