Mark Provost: Why the Rich Love Unemployment

[Ichingcarpenter]

Christina Romer, former member of President Obama’s Council of Economic Advisors, accuses the administration of “shamefully ignoring” the unemployed. Paul Krugman echoes her concerns, observing that Washington has lost interest in “the forgotten millions.” America’s unemployed have been ignored and forgotten, but they are far from superfluous. Over the last two years, out-of-work Americans have played a critical role in helping the richest one percent recover trillions in financial wealth.

Obama’s advisers often congratulate themselves for avoiding another Great Depression – an assertion not amenable to serious analysis or debate. A better way to evaluate their claims is to compare the US economy to other rich countries over the last few years.

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In the boardrooms of corporate America, profits aren’t everything – they are the only thing. A JPMorgan research report concludes that the current corporate profit recovery is more dependent on falling unit-labor costs than during any previous expansion. At some level, corporate executives are aware that they are lowering workers’ living standards, but their decisions are neither coordinated nor intentionally harmful. Call it the “paradox of profitability.” Executives are acting in their own and their shareholders’ best interest: maximizing profit margins in the face of weak demand by extensive layoffs and pay cuts. But what has been good for every company’s income statement has been a disaster for working families and their communities.

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The administration’s problem is not a question of economics, but a matter of values and priorities. In the first Great Depression, President Roosevelt created an alphabet soup of institutions – the Works Progress Administration (WPA), the Tennessee Valley Authority (TVA) and the Civilian Conservation Corps (CCC) – to directly relieve the unemployment problem, a crisis the private sector was unable and unwilling to solve. In the current crisis, banks were handed bottomless bowls of alphabet soup – the Troubled Asset Relief Program (TARP), the Public-Private Investment Program (PPIP) and the Term Asset-Backed Securities Loan Facility (TALF) – while politicians dithered over extending inadequate unemployment benefits.


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http://www.nakedcapitalism.com/2011/05/mark-provost-why-the-rich-love-unemployment.html



A very good read

[liberal N proud]

1. "neither coordinated nor intentionally harmful"

:wtf:

Every corporation practices the same tactics and they are not coordinated? Please!!!!!!!!!

But it is true that the only thing the corporation is interested in is PROFIT. They will sell everything if it meant a profit this quarter not worryinga about next quarter or even next year.

[Ichingcarpenter]

2. in other words

[pansypoo53219]

3. low wage republikkklans

1st, destroy unions. next start squeezing the dwindling middle. FORGET HENRY FORD AT ALL COST.

[Martin Eden]

4. Short Term Profit ... Long Term Blindness

The less money that average Americans have in their pockets, the less money they have to spend on what the corporations are selling. Diminishing the purchasing power of consumers is a recipe for economic collapse.

[Ichingcarpenter]

5. the shift from full-time jobs to temporary positions

This is an important point and data from the article



Another consequence of labor-market flexibility has been the shift from full-time jobs to temporary positions. In 2010, 26 percent of all news jobs were temporary – compared with less than 11 percent in the early 1990′s recovery and just 7.1 percent in the early 2000′s.

Housing? Loans.... temporary jobs don't fuel recovery