The Wageless Recovery

Discussion in 'Economy' started by georgephillip, Jul 6, 2011.

  1. georgephillip
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    georgephillip Gold Member Supporting Member

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    Economists from Northeastern University have found that since our wageless "recovery" began in June of 2009, following an 18 month Great Recession, "corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent of that growth."

    The Bureau of Labor Statistics has revealed the average real hourly earnings for all US employees actually declined by 1.1 percent between June 2009, when "recovery" began and May 2011, "the month for which the most recent earnings numbers are available.

    The Wageless, Profitable Recovery - NYTimes.com

    Ellen Brown connects the dots between rising corporate profits and declining hourly earnings with how the Wall Street bailout killed local lending, thereby making it impossible for small business owners to drive an authentic recovery.

    "The credit collapse of September 2008 was triggered by the speculative activities of giant Wall Street banks.

    "These profligate banks, which would have gone bankrupt without federal support, have emerged from the crisis bigger and more powerful than before.

    "The federal government has supported and subsidized bank consolidation, resulting in the elimination of more than a thousand community banks by takeover or failure."

    The big banks take advantage of an extremely low Fed funds rate to speculate in derivatives, futures, commodities and currencies, knowing the US taxpayer will bail them out again when their bets go bad.

    "They are big, they are powerful, and they have lost interest in local lending. In the past three years, the four largest banks have cut back on small business lending by a full 53 percent.

    "The two banks that were the largest recipients of TARP funds, Bank of America and Citigroup, have cut back on local lending by 94 percent and 64 percent, respectively."

    Ellen's solution to this problem is the same one the state of North Dakota discovered in 1919 when it began doing business as The State Bank of North Dakota.

    "Alone among states, North Dakota had the wherewithal to keep credit moving to small businesses when they needed it most. BND’s business lending actually grew from 2007 to 2009 (the tightest months of the credit crisis) by 35 percent. BND accomplished this through participation loans, in which BND contributes to a community bank’s loan, in order to free up the bank’s capital for more lending..."

    How the Bailout Killed Local Lending - and How Some States Hope to Bring It Back | Truthout
     
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  2. B. Kidd
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    B. Kidd Gold Member

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    One percent in wage growth in these times is better then 0 or a negative. You need to remember that a little more then 50 per cent of the recent corporate profits as a whole are due to overseas sales.
    What about globalism do you not comprehend? It is here and it is here to stay to a greater or lesser degree, but, nontheless, it is here to stay.
    We need to adjust, innovate, and read international markets better.
     
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  3. georgephillip
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    georgephillip Gold Member Supporting Member

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    What possible difference does it make where the sales driving corporate profits were made?

    Maybe we should review corporate profits?

    "The total accounting profits received by corporations..."

    Definition of corporate profits, definition at Economic Glossary

    Those 'total accounting profits" were made possible by wage-earning workers wherever they are employed and 88% of their contribution to the growth of real national income in the US went to pre-tax corporate profits while "aggregate wages and salaries accounted for only slightly more than one percent of that growth."

    What is it about greed you don't understand?

    "The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,' said it was 'unprecedented' for American workers to receive such a tiny share of national income growth during a recovery.

    "According to the study, between the second quarter of 2009, when the recovery began, and the fourth quarter of 2010, national income rose by $528 billion, with $464 billion of that growth going to pretax corporate profits, while just $7 billion went to aggregate wages and salaries, after accounting for inflation."

    The Wageless, Profitable Recovery - NYTimes.com

    Globalization can take many forms.
    The current version has a distinctly feudal look.
     
  4. uscitizen
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    uscitizen Senior Member

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    Whiney assed liberal. What matters is that the rich got richer.
     
  5. georgephillip
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    georgephillip Gold Member Supporting Member

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    I have not yet begun to whine

    "The Wall Street bailout of 2008 has radically altered the banking business. The bailout was supposed to keep credit flowing to Main Street, but it has wound up having the opposite effect.

    "Small and medium-sized businesses have traditionally been the main engines for increasing employment, and they need bank credit for their working capital; but today credit to local businesses has collapsed nearly everywhere."

    How the Bailout Killed Local Lending - and How Some States Hope to Bring It Back | Truthout

    However, even whiners recognize the only true solution...
    More tax cuts for the "producers."
     
  6. uscitizen
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    uscitizen Senior Member

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    All they talked abvout was Main Street and Wall Street.

    How many of us lives on either of those two streets?
    And yes those on those streets benefitted the most.

    People thought the Main Street reference was rhetorical, it was not it was accurate.
     
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  7. Trajan
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    Trajan conscientia mille testes

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    I can't hear you bro, my private jet is spooling up...what?:lol:
     
  8. saveliberty
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    saveliberty Diamond Member

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    I have disconnected from Wall Street. I also own my home as a home and not a piggy bank. Thinking guns might be a good investment...
     
  9. percysunshine
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    percysunshine Gold Member

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    The NY Times? Does anyone actually read them anymore? That is soo 80'ish.
     
  10. georgephillip
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    georgephillip Gold Member Supporting Member

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    The bailout was supposed to support Wall Street lending to community banks; however, in the last three years the four largest banks have reduced small business loans by 53%.

    "The two banks that were the largest recipients of TARP funds, Bank of America and Citigroup, have cut back on local lending by 94 percent and 64 percent, respectively."

    How the Bailout Killed Local Lending - and How Some States Hope to Bring It Back | Truthout

    Considering these goliaths would have gone bankrupt without the US taxpayer, repayment of TARP funds has come at a huge cost to small businesses in the US.
     

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