By Doug Ross
Writing at The Reformed Broker, Joshua Brown correctly dismisses the Left’s incessant calls for economic “fairness”, but then ensnares himself in another field of rhetorical quicksand: the “stupidity” of corporations and the private sector.
…the economy isn’t fair and you can make a pretty strong case that it’s gotten less fair, but that fact alone will never sway those in power…
…So instead of lamenting the lack of fairness, let’s talk about the stupidity of this hollowing out of the middle class in this country, year after year, with bought and paid for legislation and preferential tax treatment.
Henry Blodget demonstrated last night how, while corporate profits have never been higher, the wages paid to workers at these same corporations have never been lower. While corporate profit margins just hit a 70-year high, have a glance at wages as a percentage of GDP:
Corporations haven’t magically learned a new secret to profitability, they’ve just found a workaround to the need for a living wage in this country. F*** it, someone else’s problem.
Yes, Joshua: corporations have all — in concert — decided to screw the “middle class”, whoever that may be. It’s not the insane, ever growing number of regulations from hundreds of government entities that grow like weeds in good times and bad. It’s not takeovers of entire industries — like health care — with countless repercussions as diktats and fiats emanate from unelected, faceless bureaucrats. Corporations certainly couldn’t be husbanding resources to prepare for the unknown, could they?
And, oh my: 54 percent of jobs are created by small businesses, not large companies. How is it that they, too, appear to have conspired to screw “the middle class”?
…the stupidity of having such an obviously unbalanced economy is the more important discussion we should be having right now. The corporations are every bit as vulnerable to the disappearance of the middle class as the middle class is itself.
They’ve managed around this issue thus far with an increasing emphasis on exports (now responsible for half of the S&P 500’s sales and profits) as well as systemic and legally-sanctioned overseas tax evasion. Consider that Exxon Mobil made $19 billion in profits in 2009 and paid zero Federal income tax (you want to laugh, they actually got a rebate of $256 million). GE earned $14 billion in 2010 and also paid zero in Federal income tax. Microsoft and Hewlett-Packard have each set up offshore subsidiaries which they use as payment conduits so as to keep their profits shielded from the IRS.
But offshoring of profits and the export of goods and services won’t sustain these corporations forever. At a certain point, native companies within the developing world will nudge our adventuring multinationals aside (China’s already building its own version of Wall Street). And when that happens, Corporate America is going to turn around and be horrified by the devastation in its own backyard.
So, Joshua, why have these corporate entities set up offshore tax shelters? Could it be because they are incented to do so, thanks to populist — and destructive — corporate tax policies and (in the case of GE) crony capitalism?
And concerning Exxon Mobil, could it also be that we already pay an incredible rate of taxation on every gallon of gas, which — by the way — hits the middle class, and poor, and the rich equally?
Well, you enormous f***ing idiots, you fired all your customers. You’ve spent the last decade or so suppressing wage growth in the name of “creating shareholder value” and now even your shareholder base is disappearing.
You allowed wages to stagnate for a decade and made every decision you could in the service of nudging the quarterly profit higher, thinking less of the yearly profit and virtually nothing of the long-term viability of your business.
No, Joshua: you are dead wrong.
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