Free market
idealists argue that capitalism works for anyone with a little initiative and a
willingness to work hard. That might be true if job opportunities were available
to everyone. But the facts reveal a lack of opportunity, largely because the
very system of capitalism that's supposed to work for everyone is betraying its
most productive members.
It's a
step-by-step process of hypocrisy disguised as free
enterprise:
1. Let the
public pay for the research.
Since World War
2 our federal government has played the dominant role in the research of new
technologies, with an emphasis on the long-term basic research that
painstakingly perfects design while not yet producing revenue. Corporate
R&D, on the other hand, is heavy on the profit-making late stages of
development.
Government has
contributed significantly to the development of today's most modern
technologies. Business has taken full advantage. Even during the frenetic growth
of the 1990s, industry funding for computer research declined dramatically while
government research funding continued to climb. As of 2009 universities were
still receiving ten times more science & engineering funding from government
than from industry.
2. Use the
publicly-funded technologies to double profits in 8
years.
From 2003 to
2011 total corporate profits more than doubled from $900 billion to almost $2
trillion.
A big part of
that is the financial industry, which has adapted the (nationally built)
Internet to fashion trillion-dollar trading schemes. Up until 1985 financial
firms never earned more than 16 percent of domestic corporate profits. Their
share recently reached 41 percent.
3. Use the
recession as an excuse to cut taxes in half.
For the twenty
years prior to the 2008 recession, corporations paid an average annual rate of
22.5% in federal taxes. Since then the average has been
10%.
4. Quietly
hoard all the excess money.
Anywhere from
$2.2 trillion to $3.4 trillion in cash is being held by non-financial
corporations, who have chosen to fatten stockholders rather than invest in new
production facilities and the employees needed to make them
profitable.
Once again, the
financial industry leads the way. Just 12 large banks hold 69 percent of
industry assets, close to $8 trillion. But they're not making their money
available to consumers or small businesses. According to the Federal Reserve
Bank of Dallas, community banks, which hold less than one-fifth of industry
assets, provide over half of all small business loans.
5. Pay
existing workers what they earned in 1970.
Less, actually.
Average real wages were $17.42 in 2007, down from $19.34 in 1972 (based on 2007
dollars). Wages as a percentage of the economy, at 44% of GDP, are at an
all-time low.
Jobs that remain
are increasingly low-wage positions. Apple is a good example of the race to the
bottom for wages, with an estimated $420,000 profit per employee and a $12 per
hour pay rate for its store workers.
6. Eliminate
all the other people who helped increase productivity.
Not only are
"job creators" failing to create jobs with their cash hoards, but they're also
cutting jobs in order to 'streamline' their operations. Evidence comes from The
Nation, Market Watch, and Business Insider.
-- Verizon,
which made $38 billion in 2008-11 and paid no tax, cut 41,100
jobs.
-- AT&T,
which made $9 billion in 20011 and paid no tax, cut 54,000
jobs.
-- Merck, which
made $34 billion in 2008-11 and paid a 7% tax, cut 13,000
jobs.
Other leading
job-cutters:
-- Citigroup,
which made a $28 billion profit in 2010-11 and paid no
tax.
-- Boeing, which
made $15 billion in profits in 2008-11 and paid no tax.
-- IBM, which
made $75 billion in profits in 2008-11 and paid less than 2% in
taxes.
-- HP, which $40
billion in profits in 2008-11 and paid an 11% tax.
-- Pepsico,
which made a $10 billion profit in 2011 and paid a 6.3%
tax.
-- Proctor &
Gamble, which made almost $60 billion in profits in 2008-11 and paid 11% in
taxes.
-- Google, which
avoided about $2 billion in 2011 taxes by shifting revenue to a Bermuda tax
haven.
7. Ignore the
facts.
And do nothing to address the mistreatment of American workers. CEOs, Congress, and the media are all skilled at this final step of betrayal.
ARA/HJ
- Latest News
- Top Hits