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.