A Cooperative (Not Corporate) Economy
By Sean Thomas-Breitfeld
Originally published in Kim Klein and the Commons
Although the recession officially ended a year and a half ago, this is still a very difficult holiday season for millions of us. Job losses left 8 million people looking for work at some point over the past three years; and even those who held on to their jobs lost their savings due to declining home values and retirement accounts. But we keep hearing news about the record-breaking profits that businesses and banks are raking in, and it’s never been clearer how far we are from a cooperative economy.
Last month, the Commerce Department reported that American businesses earned profits at an annual rate of $1.659 trillion in the third quarter; the highest figure recorded since the government began keeping track over 60 years ago.
Then last week, the President met with 20 executives from corporate America to appeal to them to “get some of the cash off the sidelines;” a more politically correct way of asking corporations to share the wealth and cooperate in extending the economic recovery they’re experiencing to the rest of us. A couple of days later, Congress passed a tax deal thatcost more than the 2009 stimulus, undercut the future funding of Social Security by “temporarily” cutting the payroll tax that goes to the Social Security trust fund, and also extended the Bush tax cuts for the rich. Those last two provisions make up almost 30% of the total package (see the chart from CBPP) and reject the commons vision that we can care for people and the economy better together.
In the midst of all of this public debate over the economy, and how/whether/what to contribute to it, public opinion has been consistently confused and confusing. The tax cut deal may have sparked a revolt by some members of the President’s party, but a Washington Post poll found that the compromise was supported by a majority of Americans. Taking a closer look at the poll results though, we learn: that the only provision in the deal with strong support was the extension of unemployment benefits; that slim majorities want to reduce the deficit now (not after the economy improves) and support the estate tax cut provision (though it’s doubtful they understood that the estate tax cut will benefit less than 1% of the estates in America), and; that a plurality think the tax deal won’t make a difference in the national economy.
Yesterday, a poll found that 68% of voters believe that when a corporation has a tremendous amount of cash on hand that it’s primary objective should be to create jobs; but 50% opposed having the government require such an investment in job creation by corporations. If we take these polls at face value; Americans want those who are suffering from the real economic depression that continues in our communities to get extended unemployment benefits, but still want ultra-rich heirs and heiresses to inherit more un-earned wealth, and (as we’re told over and over) want to reduce the deficit in some mystical way. And Americans want corporations to do the right thing by creating jobs; but don’t want the government to ensure they do.
These sorts of contradictions about what and how we should expect our economy’s winners to contribute to the real economy that affects people on the ground reflects a faith in the beneficence of corporations and the wealthy. And while this is a season of faith and hope; these myths about the good intentions of the wealthy, corporate wise men ignore the fact that they are sitting on cash reserves and tax cuts in order to enrich their own coffers, not to get Main Street out of this depression. They haven’t been offering us any gifts of gold (or even incense and myrrh) for decades, and neither ‘charm offensives’ by the President or favorable public opinion are sufficient to get them to invest in an economic recovery that extends to those of us in the bottom 80% of the income spectrum (last year the richest 20% earned over half of all income in the U.S.). If we want a better economy we will need corporations and the rich to contribute, just as we’ve contributed to their bottom lines with our spending this holiday season.