One of the denizens over a Kilroy’s decided to jump into an economic argument throwing pies.
In the process of us demolishing his ignorance all of us realized he’d never been taught how corporate profits work. It then occurred to some of us that perhaps some of the reason the really “common-sense” arguments of how to “make America great again” have not resonated, is because perhaps a lot of you out there also don’t know the real shape things are in either….
This is not a screed. This is just a demonstration of where things are… using data and charts that are very easy to find only if you know where to already look (FRED) and very hard to find if you don’t know where they are…
We’ll start with a parable…..
Once upon a time there was a family whose last name was Quintiles… A little larger than average they were nuclear with a father who worked, a mother who also worked and 3 children spaced roughly 3 years apart…
The mother went back to work when her first child reached teenager status. They had unlimited food… All they ate was pie (there is a joke there). As the children were growing up, the mother portioned out the pie for all so all could get enough to eat….
When the mother went back to work she taught her oldest to put the pie in the oven and feed the children while leaving two pieces for the parents when they returned home.
He was to divide the pie into five pieces and give everyone their share… For a while they monitored the portions closely then seeing no issue never looked at it again. ..
Over time the portion being retained by the teenager gradually grew in size. After all he was cutting. The children couldn’t complain. And the parents never knew because he left portions for them that were consistent.
The smallest got it worst.. Being small and weak he lost the largest share of his portion first. After getting used to living on that bigger piece, when desirous of more pie, the oldest then began sliding the knife inward on the middle child’s portion… It got smaller and smaller.
Then he begin trimming Mom and Dad’s. who were really too busy to notice or care. In the end he was eating half the pie, and the other four were sharing the other half….
One day, the littlest one complained. Then the other four noticed they too had smaller portions. They banded together, and re-arranged duties so the first child now carried out the garbage and the other two children got to rotate pie cutting duties…
They all had enough food forever. However the oldest one threw a fit.. “Not fair”, he cried… “You all get more food, and I’m losing it… This is Socialism”. Eventually when his pleas had no listeners, he too shut up and was content with his “never-ending” piece of pi….
What does that mean you say? Master, please explain…
Ok.. so you may be clear. The family is American society. The earners are the American working class who earn and buy things that fuel the economy. During Conservative rule, the American people elected to let corporations be what run our government and by extension, our lives… They were put in charge of the government and for a while it was nice. Then they started wanting more. With no greater force to stop them, they took more and more and more.
Everyone else got less. They got more. Everyone else’s pie got smaller and smaller though the entire pie stayed the same. Those with smaller pie pieces were given a litany of excuses including saying they had no choice. Hard times were upon us. But no one was looking at what they were getting as they made our lives more miserable.
Finally the bottom class said we can’t live on $7.25 an hour, and the conversation got started. Everyone realized their portions too had decreased, and that all that decrease had accumulated to the pie of the ones who’d been appointed to do the cutting with no supervision or regulation or negatives for doing wrong.
They got together, changed the rules, forced the recalcitrant child to obey, and he screamed “Socialism”… and threw a fit.
The fit was ignored and the tantrum stopped. The child ended up being happy getting enough to live on as was everyone else…
Nice story.. you said something about charts?
This is the chart showing time since we began keeping records. Notice the gradual increase in the inclines in the Clinton years, steeper in the Bush years, and steeper in the Obama years.
Even looking at this chart can be misleading. For example in the Clinton years the rising tide did raise all boats.. Corporate profits rose because every level of income also rose, from poorer to richest. Anyone living during those times of higher federal taxation did better each year than the year before. But, with the cuts of the Bush era, the benefits only went to top earners, something Obama was not able to change with the Tea Party holding down both houses and tax increase on the wealthy, during his term…
So a better guide would be the ratio of Corporate Profits (CP) to the total pie (GDP). This would show the how much corporate profits were taking of the finite pie.
The thing to remember when viewing this is that America’s middle class’s greatest times were between 1950 and 2000… The chart shows why.
The numbers on the left stand for percent of the national pie… At Bill Clinton’s swearing in, the national pie was divided 5% to corporations and 95% to the people. Today it is at 11% for corporations versus 89% for the people….
We, The People, under the new rules written by the corporations, for the corporations, and of the corporations, have been squeezed out of 6% ….. (6% which now mostly goes to the top earning 16,000 people)
Currently our GDP is around $18 trillion dollars a year…. $18,000,000,000,000.
Six percent of that (amount originally ours but now corporate’s) is roughly $1.1 trillion… At a 150 million of us working that averages out to an rough income loss of $7.333 per worker…
Would you be ok with $7,000 more per worker in your family? $14,000 more PER YEAR in two-income families?
That is what happens when you move $1.1 trillion from Corporate profits over to employee income.
Let them scream Socialism on deaf ears. We know it won’t hurt them, it’s all bluff, because we know they were doing quite well when they had far less profits…
So if you don’t have enough to live well, don’t blame Mexicans. Don’t blame those on SNAP. Don’t blame Muslims. Don’t blame inner city inhabitants. Don’t blame Obama. Don’t blame the Supreme Court. Don’t blame anyone except those who are entrusted with the cutting of the pie you are to get…
Right now, that is Republicans in Congress and those lobbyists handing them laws to be passed…
The only way it changes is for all to gang up and make the change… Only one candidate is unbought and offering to do that.