Corporate Profits Hit Record High While Worker Wages Hit Record Low

Source: Thinkprogress.org:

A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.

In the third quarter of this year, “corporate earnings were $1.75 trillion, up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):

Paul Krugman: Income Inequality is impeding Economic Recovery

The famous economist is confirming what Occupy Wall Street has been saying:

 Before the Great Recession, I would sometimes give lectures in which I would talk about rising inequality, making the point that the concentration of income at the top had reached levels not seen since 1929. Often, someone in the audience would ask whether this meant that another depression was imminent.

Well, whaddya know?

Did the rise of the 1 percent (or, better yet, the 0.01 percent) cause the Lesser Depression we're now living through? It probably contributed. But the more important point is that inequality is a major reason the economy is still so depressed and unemployment so high. For we have responded to the crisis with a mix of paralysis and confusion - both of which have a lot to do with the distorting effects of great wealth on our society.

But other learned individuals have made the same argument:

"Countries where income was more equally distributed tended to have longer growth spells," says economist Andrew Berg, whose study appears in the current issue of Finance & Development, the quarterly magazine of the International Monetary Fund. Comparing six major economic variables across the world's economies, Berg found that equality of incomes was the most important factor in preventing a major downturn.

But you don't have to be a scholar to figure this out. Less disposable income means less consumption thus a weaker economy:

But it should be obvious to anyone that if all of the income that results from increases in economic output flow to the top one percent of the population, then the rest of us won't have that income to buy the increasing number of products and services that result from the increased productivity.

What happens, then, is simple: economic growth stalls. Companies won't hire people to produce more products and services if no one has the money to buy them, so they lay people off. Taken as a whole, the economy then has even fewer people with the money to buy new goods and services.

CEO Pay Grew 127 Times Faster Than Worker Pay Over Last 30 Years: Study

Source: Huffington Post:

American CEOs saw their pay spike 15 percent last year, after a 28 percent pay rise the year before, according to a report by GMI Ratings cited by The Guardian. Meanwhile, workers saw their inflation-adjusted wages fall 2 percent in 2011, according to the Labor Department.

That's in line with a trend that dates back three decades. CEO pay spiked 725 percent between 1978 and 2011, while worker pay rose just 5.7 percent, according to a study by the Economic Policy Institute released on Wednesday. That means CEO pay grew 127 times faster than worker pay.

Income inequality between CEOs and workers has consequently exploded, with CEOs last year earning 209.4 times more than workers, compared to just 26.5 times more in 1978 -- meaning CEOs are taking home a larger percentage of company gains.

That trend comes despite workers nearly doubling their productivity during the same time period, when compensation barely rose. Worker productivity spiked 93 percent between 1978 and 2011 on a per-hour basis, and 85 percent on a per-person basis, according to the Federal Reserve Bank of St. Louis.

Obama Fails to Stem Middle-Class Slide He Blamed on Bush

Sadly there are still millions of Americans who still believe in the fraud who is Barack Obama. He lied to us. We should not be surprised. Democrats and Republicans have been lying to us for decades. So why should he be any different:

Barack Obama campaigned four years ago assailing President George W. Bush for wage losses suffered by the middle class. More than three years into Obama’s own presidency, those declines have only deepened.

The rebound from the worst recession since the 1930s has generated relatively few of the moderately skilled jobs that once supported the middle class, tightening the financial squeeze on many Americans, even those who are employed.

“It started long before Obama, but he hasn’t done anything,” said John Forsyth, 58, a railroad-car inspector and political independent from Lebanon, Ohio. “He kept pushing this change, change, change, and he hasn’t done anything.”

Underlying the erosion of the middle class, defined by some economists as the middle 60 percent of income earners, are trends that stretch back decades, including competition from lower-wage workers overseas and technological advances that allow factories and offices to produce more with less labor.

As a candidate in 2008, Obama blamed the reversals largely on the policies of Bush and other Republicans. He cited census figures showing that median income for working-age households -- those headed by someone younger than 65 -- had dropped more than $2,000 after inflation during the first seven years of Bush’s time in office.

Yet real median household income in March was down $4,300 since Obama took office in January 2009 and down $2,900 since the June 2009 start of the economic recovery, according to an analysis of census data by Sentier Research, an economic- consulting firm in Annapolis, Maryland.

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Research Shows the US is a Low Wage Country

This should be a wake-up call to the supporters of this President. If Obama were a Republican this stat would be used against him. But it seems that the left has been drinking the cool aid and refuse to see reality for what it is. President Obama serves the interest of big business. He's proven that over and over again. Don't be fooled any longer.


Source: CBS

Growth of Income Inequality Is Worse Under Obama than Bush

Finally we have someone on the Left willing to expose the Obama fraud. There are some who are going to stick to their principals and not sellout:

Yesterday, the President gave a speech in which he demanded that Congress raise taxes on millionaires, as a way to somewhat recalibrate the nation's wealth distribution. His advisors, like Gene Sperling, are giving speeches talking about the need for manufacturing. A common question in DC is whether this populist pose will help him win the election. Perhaps it will. Perhaps not. Romney is a weak candidate, cartoonishly wealthy and from what I've seen, pretty inept. But on policy, there's a more interesting question.

A better puzzle to wrestle with is why President Obama is able to continue to speak as if his administration has not presided over a significant expansion of income redistribution upward. The data on inequality shows that his policies are not incrementally better than those of his predecessor, or that we're making progress too slowly, as liberal Democrats like to argue. It doesn't even show that the outcome is the same as Bush's. No, look at this table, from Emmanuel Saez (h/t Ian Welsh). Check out those two red circles I added.

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Fix income inequality with $10 million loans for everyone!

Great idea. The only problem is that you have to be a large corporation that donated to Congress and the Obama administration. Most of us don't qualify:

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

Source: Sheila Blair, Washington Post

President Obama’s Secretary Paid Higher Tax Rate Than He Did

Maybe we should call it the "The Obama Rule." Don't expect the President to mention this omission during his campaigning swings:

President Obama today released his 2011 federal income tax, with he and his wife reporting an adjusted gross income of $789,674. The Obamas paid $162,074 in total tax – an effective federal income tax rate of 20.5%. The Obamas also reported donating approximately 22% of their income to charity — $172,130.

President Obama has been making a big political push for the “Buffett Rule,” which would require millionaires to pay a minimum of 30% of their income in taxes. To illustrate the point, the president has pointed out that billionaire investor Warren Buffett pays a lower tax rate than does his secretary.

President Obama’s secretary, Anita Decker Breckenridge, makes $95,000 a year. White House spokeswoman Amy Brundage tells ABC News that Breckenridge “pays a slightly higher rate this year on her substantially lower income, which is exactly why we need to reform our tax code and ask the wealthiest to pay their fair share. ”

Maybe this is why the President extended the Bush tax cuts. We won't be having this discussion if Obama had allowed the dreadful Bush tax cut to expire in the first place. But that would make this President other than a typical back-stabbing politician:

 It should be noted that president would not be impacted by the Buffett Rule, though he would see his taxes go up if the so-called Bush tax cuts on higher income wage-earners were allowed to expire, as the president says he wants.

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Over Half Of Retail Workers Earn Less Than $10 An Hour

Of course last night the President made no mention of the minimum wage and barely mentioned health care. Therefore, those who work in retail have no hope of seeing their financial situation improve in a second Obama administration:

More than half of the retail workers surveyed in a study last fall earn less than $10 an hour. The Retail Action Project and Stephanie Luce of the City University of New York conducted the study of 436 retail workers in New York, a location chosen because it is the retail capital of the U.S. Most surveyed worked in stores with a national presence, which means that the study reflects conditions and practices experienced by retail workers across the U.S.

About one-third of the workers surveyed support a family member on their wages, but the median wage for the surveyed workers is only $9.50 an hour. The majority of workers (59 percent) are female. Almost one in five earns less than $8 an hour, and almost 12 percent earn minimum wage. About 34 percent rely on public assistance.

Other findings from the study include:

•     Lack of health insurance and paid sick days from retail jobs. Over 70 percent don’t receive health insurance from their job. About 25 percent live without health insurance, and 34 percent rely on government programs. Less than half received paid time off or paid sick days. Only 25 percent have ever used a paid sick day

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