The Strange case of the US Economy.

[Flopper]

Taking the economy hostage. Depressing demand for political purposes. I swear, the nonsense around here gets positively disturbing. How anyone can possibly think that a CEO or business owner would deliberately curb or reduce their own profits, it just boggles the mind. It's like the democratic party has opened a huge vat of stupid and people are swallowing it without a second or even first thought of their own.

Everybody talks about a lack of demand as though that's it, increase demand and our worries are over. Well not so fast kemo sabe, it ain't that easy. First of all, there's the question of how to do that, not just temporary shit like the president's jobs bill, but real and permanent job creation. That ain't going to happen until the business climate in this country changes for the better, there's no magic jobs plan or policy that can fix everything and poof, people start hiring again.

Then there's the question of costs, when you raise taxes and increase the number of regulations to be complied with, and healthcare costs continue to go up, as does the cost of energy, the the cost of doing business goes up too and prices soon follow. News flash - demand is not helped when prices rise. The supply side of the equation comes into play too.

This is not some "crackpot" theory..it comes from my experience in working with the business world as well as what I've seen in the media. Remember, HP under Carly Fiorina, fired some 30K employees while the company was showing profit. She went on to become a Republican candidate.

Citigroup sent out a famous memo that the US was a "Plutonomy"..

Daily Kos: Citigroup's Shocking 'Plutonomy' Reports -- h/t Michael Moore

Citigroup Plutonomy Report Part 1
Oct 16, 2005



- The World is dividing into two blocs - the Plutonomy and the rest.

The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.

- Equity risk premium embedded in "global imbalances" are unwarranted.

In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc.

This imbalance in inequality expresses itself in the standard scary "global imbalances". We worry less.

- There is no "average consumer" in a Plutonomy.
[...]
Indeed, traditional thinking is likely to have issues with most of it. We will posit that:

1.the world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest.
Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S.

What are the common drivers of Plutonomy?

Disruptive technology-driven productivity gains,
creative financial innovation,
capitalist-friendly cooperative governments,
an international dimension of immigrants and
overseas conquests invigorating wealth creation,
the rule of law, and
patenting inventions.

This sort of demonstrates the private industry at large has very little intention of changing anything until they get most if not all of what they want.

Very low taxes, no regulations.

Fewer and fewer corporations are controlling more and more industries. There once were many newspapers and other news sources in America competing with each other, but now just a handful of media corporations control what the public is told.

Corporate giants have moved into small town American devouring competition, controlling local government, and setting wages.

Today the giant banks control the wealth of this nation as never before. The top 10 banks in the US control 77% of the banking assets.

An how has this benefited America? We now have the highest income inequality of the highly developed nations. Between 1979 and 2005, the mean after-tax income for the top 1% increased by 176% while the middle class income (middle quintile) increased 21% and the income of the poor increase was 6%. We are rapidly moving toward a nation of great wealth and great poverty with little in between, an environment in which democracy can not survive.


Dr. Dennis Cuddy -- Competition in America?
Income inequality in the United States - Wikipedia, the free encyclopedia

 

[KissMy]

So under the Obamacrat regime corporations increased profits by cutting US worker jobs & benefits.