The Stand

Austerity cuts aren’t working, except for America’s top 1%

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groves-david-13By DAVID GROVES
The Stand


A Harvard business professor recently discovered that we Americans are pretty pessimistic about how wealth is distributed in this country. All of us — Democrats and Republicans alike — believe that wealth is distributed unfairly to the richest Americans. But we have no idea how bad it’s gotten.

Watch this mind-blowing demonstration of the Harvard study’s findings that is making the rounds on the Internets this week:

 

 

The Dow Jones Industrial Average hit record territory today, but fully half of all the stocks, bonds and mutual funds are owned by America’s super-wealthy, our top 1%. The bottom 50% of Americans own only a half-percent of these investments between them. They aren’t investing, they are just scraping by.

This goes a long way toward explaining why, in this post-recession “recovery,” the only thing that’s really recovering are corporate profits and stock prices. That doesn’t help most Americans, having a good job does. And the “job creators” aren’t creating jobs.

“Right now, CEOs are saying, ‘I don’t really need to hire because of the productivity gains of the last few years’,” said Robert E. Moritz, chairman of the accounting giant PricewaterhouseCoopers.

Worse, as Charles Pierce points out in Esquire, in a regulatory and tax environment that protects corporate profits at the expense of working-class American’s living standards, CEOs have no intention of creating jobs any time soon.

Simply put, the job creators are now not creating jobs. They have no intention of creating jobs now or in the future… They simply will reduce the number of jobs they have now and grind the remaining employees, most of whom have no recourse any more, either to the government or to organized labor. The job creators thereupon will get rich not creating jobs, and they will continue to get rich not creating jobs, because creating jobs costs them money. Any politician who says anything else is lying to you.

Even as American voters have rejected the Tea Party’s austerity measures, the right-wing conservatives in government — kept in place by unlimited contributions from super-wealthy financiers like the Koch brothers — stick to the script of cutting government in order to maintain corporate tax loopholes and keep the top 1% from paying their fair share. And to get their way, they are willing to slash budgets across the board, shut down the government, and default on America’s obligations to pay its bills, if necessary.

austerity_not-workingOn the eve of this week’s across-the-board sequester cuts in federal spending, The Washington Post reported, “Federal, state and local governments now employ 500,000 fewer workers than they did on the eve of the recession in 2007, the longest and deepest decline in total government employment since the aftermath of World War II.”

The trickle-down strategy of cutting government spending to keep tax rates low for corporations and the top 1% has clearly failed to create jobs. Instead, it is killing family-wage public sector jobs, shredding important social programs, and threatening the most important safety nets we have to keep Americans out of poverty: Social Security and Medicare.

Truly, now is the time for something completely different.


David Groves is Editor of The Stand.

Short URL: http://www.thestand.org/?p=21333

Posted by on Mar 5 2013. Filed under OPINION. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Comment for “Austerity cuts aren’t working, except for America’s top 1%”

  1. sorscher

    Public policy is driven by political power.

    Global businesses have built *plenty* of political power. The outrageous inequality in the video is exactly the desired outcome for the 1%. They organized their political power and got what they wanted.

    Civil society has lost political power through globalization, and decades of rhetoric to discredit government, weaken institutions of civil society and de-legitimize policies that raise living standards.

    Today’s “Must read” in The Stand email digest — http://www.thestand.org/?p=21318 — is exactly the right move. Civil society needs to see itself in historic political terms, not as individual issue-oriented organizations.

    Investor interests have successfully framed every policy around “making business succeed” – bad trade policy, dismantling public education, regressive taxes, erosion of social programs. We need a coherent unified political voice from civil society that builds social capital.

    We all do better when we all do better.

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