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Monday, November 28, 2011

Chart of the Day: Corporate profits up, wages and salaries down

click to enlarge

The purple line on the chart tracks corporate profits after taxes as a percent of GDP, compared to the series' average. The green line does the same, but for wages and salaries disbursed.

When the line crosses above zero, the figure is above its historic average. Below zero is below average.

Corporate profits after taxes have been above average since the fourth quarter of 2003, with the notable exception of the second quarter of 2008 (aka, the financial crisis). By contrast, wages and salaries disbursed have been below their historic averages continuously since the second quarter of 2001.

Update: I've reworked the chart, focusing on the data since the year 2000:

 

click to enlarge

sources:

  1. For Business, Golden Days; For Workers, the Dross
  2. Profits Are High, Wages Are Low and Taxes Are Below Average

Dialogue with the Fed: Understanding the Unemployment Picture

from the Federal Reserve Bank of St. Louis:

The final event of the St. Louis Fed's fall evening series was held Nov, 21, 2011 and featured Christopher Waller, senior vice president and director of research for the St. Louis Fed. Waller spoke on "Understanding the Unemployment Picture, (PDF link)" and video of the program will be posted (on the St. Louis Fed website) shortly.

Recommended.

Sunday, November 27, 2011

What he said

Quoting, in full, a recent post from Mark Thoma:

The Demand for Jobs

Businesses won't hire workers because there is not enough demand to support them, and the public can't supply the needed demand because too many people don't have jobs.

That's what's so frustrating. If the unemployed had jobs, the demand would be there to support them. But the demand has to come first, and workers won't be hired until the demand is there.

I wonder who could provide the missing demand needed to overcome this problem?

It's not the first time we've seen this argument:

"We're caught in a vicious cycle: Businesses aren't hiring because their chief concern is poor sales, and people aren't buying because they've lost their jobs."

Back then, we were presenting an "elevator pitch" for the Americans Want to Work Act. The logic, and the argument, is just as sound today.

Wednesday, November 23, 2011

Chart of the Day: Out of Balance

from Mother Jones magazine:
"A Harvard business prof and a behavioral economist recently asked more than 5,000 Americans how they thought wealth is distributed in the United States. Most thought that it’s more balanced than it actually is. Asked to choose their ideal distribution of wealth, 92% picked one that was even more equitable."

 

source: One Wealth Quintile at a Time - Building a Better America (PDF link)

Tuesday, November 22, 2011

Chuck Collins - Taxing the Wealthy

A TEDx Talk given by Chuck Collins, who directs IPS's Program on Inequality and the Common Good:

Fox News: "I award you no points..."

From a recent press release:

"According to the latest results from Fairleigh Dickinson University’s PublicMind Poll, some news sources make us less likely to know what’s going on in the world. In the most recent study, the poll asked New Jerseyans about current events at home and abroad, and from what sources – if any – they get their information. The conclusion: Sunday morning news shows do the most to help people learn about current events, while some outlets, especially Fox News, lead people to be even less informed than those who say they don’t watch any news at all."

Fox News: worse than nothing at all.

Negotiation

"Negotiation" by Clay Bennett

Update: this was originally posted on November 30, 2010, but it seems just as timely today in the wake of the breakdown of the supercommittee process.

Monday, November 21, 2011

Chart of the Day: Long-Term Unemployment Becomes More Permanent

Click image to read associated article

Michael Hirsh, writing in the National Journal:

Along the way, 'long-term unemployed' has increasingly become a synonym for 'unwanted.' As industries die, skills atrophy, and ambition fades, especially among older workers. In a new era of jobless growth, fiscal austerity, and the relentless drive for productivity, employers get pickier about whom they hire. Workers who don't retrain quickly at a high enough level or those who are stuck with an underwater mortgage and can't move right away for a job opportunity quickly become long-term unemployed.

U.S. companies have grown so brazen about avoiding the long-term unemployed that many place ads for only 'currently employed' applicants. Sen. Richard Blumenthal, D-Conn., and Rep. Rosa DeLauro, D-Conn., have introduced bills seeking to bar the practice as illegal discrimination.

In recent months, Federal Reserve Board Chairman Ben Bernanke and President Obama have sounded increasingly urgent alarms about the staggering number of long-term unemployed. And they are right to do so: 42.4 percent of the nation's 13.9 million unemployed workers have been out of a job for more than six months. That's by far the highest share of long-term unemployed since the government started keeping records a half-century ago. Expert after expert now warns that the longer a person goes jobless, the greater the atrophy in skills and ambition, and the more likely that person is to drop out of the workforce entirely.

What Bernanke and others rarely mention, though, is that this trend has been building for at least three decades. The share of left-behinds has generally ratcheted up with every economic downturn since the early 1980s. And today, even two years after the Great Recession technically ended in June 2009, the number of long-term jobless has continued to climb to record levels. It shot up from 29.3 percent of total unemployed workers in June 2009 and peaked at 44.6 percent as recently as September.

Washington, dominated by a free-market consensus ever since President Reagan's era, has ignored that 30-year pattern. Partly as a result, reams of data show that America's middle class has been shrinking. Among the few who has long second-guessed the Washington mind-set is Frank Levy, an economist at the Massachusetts Institute of Technology who coauthored a much-cited 2007 paper concluding that labor began losing the fight to capital in the late 1970s.

Sunday, November 20, 2011

The Colors of Democracy

Purple: the color of the ink used in Iraq's elections after the overthrow of Saddam. White: the color of both the pepper spray and the neutralizing agent in Portland and Seattle. Orange: the color of the pepper spray used on student Occupiers at the quad at UC Davis.

Saturday, November 19, 2011

Recall for thee, but not for me

Scott Walker, Governor, is against recalling office-holders.
Scott Walker, candidate for Governor, was all for recalling office-holders.

John Nichols, writing in The Nation:

Walker was elected Milwaukee County Executive in a 2002 recall election.

In 2010, when he was running for governor, he hailed the process as democracy in action.

"You know the folks that were angry about this started a recall and they were told they needed to collect 73,000 signatures in sixty days," said Walker. "Well, not hundreds, not thousands, but tens of thousands of ordinary people did an extraordinary thing. They stood up and took their government back. In less than thirty days they collected more than 150,000 signatures. It was at that moment I realized the real emotion on display in my county wasn't just about anger. You see, if it had been about anger, it would have been about people checking out and moving out or giving up. But instead what happened was really amazing. You saw people standing up shoulder to shoulder, neighbor to neighbor and saying we want our government back. And in doing so the real emotion on display was about hope. Today I see a lot of the same emotions on display here in Wisconsin and all across our great country. Obviously, there are a lot of reasons to be angry."

Once again, not hundreds, not thousands but tens of thousands of ordinary people are doing an extraordinary thing in Wisconsin. They are standing up and trying to take their government back.

Target: Occupy Wall Street

Chris Hayes airs an exclusive story on a memo detailing lobbyist's plans to target the Occupy Wall Street movement:

Friday, November 18, 2011

Congresswoman Barbara Lee Speaks Out for the Extension of Unemployment Benefits

Occupy the Remuneration Committee

(chart from Barry Ritholtz)

(click image to read source)

As their employees' average earnings have gone down from $31,991 (in 1964) to $28,305 (in 2005), corporate executives have seen their median compensation go up from $822,000 to $4.9 million.

What have the executives done to earn what they did? Increase stock prices? Drive sales? Add value to the corporation?

In many cases, they did nothing: their compensation was decided on by looking at what other executives were making:

As the board of Amgen convened at the company’s headquarters in March, chief executive Kevin W. Sharer seemed an unlikely candidate for a raise.

Shareholders at the company, one of the nation’s largest biotech firms, had lost 3 percent on their investment in 2010 and 7 percent over the past five years. The company had been forced to close or shrink plants, trimming the workforce from 20,100 to 17,400. And Sharer, a 63-year-old former Navy engineer, was already earning lots of money — about $15 million in the previous year, plus such perks as two corporate jets.

The board decided to give Sharer more. It boosted his compensation to $21 million annually, a 37 percent increase, according to the company reports.

Why?

The company board agreed to pay Sharer more than most chief executives in the industry — with a compensation "value closer to the 75th percentile of the peer group," according to a 2011 regulatory filing.

This is how it's done in corporate America. At Amgen and at the vast majority of large U.S. companies, boards aim to pay their executives at levels equal to or above the median for executives at similar companies.

This situation isn't new: the Washington Post article above links to a related piece from 2002.

Occupy the Boardroom is a good place to start, but Occupying executive remuneration committees would be better.

Related

The Occupy Wall Street Spotlight Signal

Thursday, November 17, 2011

Quote of the Day

from a letter posted online by the Rt. Rev. Mark S. Sisk, Bishop of the Episcopal Diocese of New York

"There can be little doubt that capitalism is a productive way to order economic life. But we need to remember, as the (Occupy Wall Street) protestors have reminded us, that that is all that it is – an economic system based on the entirely reasonable propositions that capital has value, and that supply and demand are the most efficient way to set prices. Capitalism is of no help at all in determining what is morally good – that is something that must instead be determined by the community’s wider values."

99% v 1%: the data behind the Occupy movement

source: The Guardian DataBlog

Wednesday, November 16, 2011

Progressive Caucus Hearing on Job Creation Highlights Nov. 16, 2011

Chart of the Day, November 16, 2011

From the CBO's Director's Blog:
  • Policies that would reduce the marginal cost of adding employees or would be targeted toward people who would be most likely to spend the additional income would have the largest effects on output and employment. Those policies include reducing employers' payroll taxes and providing aid to the unemployed.
  • Policies that would give little incentive for firms to hire or invest—such as reducing business income taxes and reducing tax rates on repatriated foreign earnings - would have small effects.
  • Achieving both short-term stimulus and long-term sustainability would require a combination of policies: changes in taxes and spending that would widen the deficit now but reduce it later in the decade.


We leave determining which policy options are advocated by which political parties as an exercise for the reader.

Tuesday, November 15, 2011

Brian Stelter, reporting in the New York Times (emphasis mine):

"Ms. Christ said that police officers took a New York Post reporter standing near her and 'threw him in a choke-hold.'

That reporter and two photographers with him declined to speak on the record because they are freelance workers and lack some of the job protections of full-time employees. But as they sipped coffee on Tuesday morning in Foley Square, where some of the protesters had regrouped, they expressed surprise at the extent of what they described as police suppression of the press.

There's certainly an argument to be made about freedom of the press here, and that's the main point of the article.

There's another argument to be made here, too, and I think it's even more important - about the erosion of rights and the relationship between employers and employees in general.

Monday, November 14, 2011

Stat Pack Updated

The Stat Pack page has been updated to incorporate the latest (October) unemployment and job openings figures from the BLS.

Of note:

  • unemployment is demonstrably trending down
  • the number of 99ers has slipped back under the two million mark
  • over the past few months, job openings have been trending slightly upward

One additional update: the Bang for the Buck chart has been color-coded to compare the effects of Democratic and Republican policy efforts at economic growth. I think you'll find the differences telling.

Does government regulation really kill jobs?

from Jia Lynn Yang, reporting in the Washington Post:

"In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of 'government regulations/intervention.' By comparison, 25 percent were laid off because of a drop in business demand."

Friday, November 11, 2011

Occupy Together!

Quote of the Day

"If the problems in the U.S. economy came on the supply side – fear of regulation, inadequate workers, etc. – there would be no reason to expect production for exports to grow any more rapidly than any other component of GDP. But, exports have outperformed the economy – the key difference being demand for U.S. products abroad." (source)

How the 1% Crashed the Economy, and What the 99% Can Do About It

Saturday, November 5, 2011

Forbes: Memo to the "one-percenters"

John Cassidy, writing in Forbes Magazine (emphasis mine):
Most Americans don't begrudge great riches to anybody who works hard, takes real risks, and creates things of value. As evidenced by the positive outpouring for Steve Jobs, great entrepreneurs are still celebrated. But there is an implicit social contract that links rewards to effort and accomplishment. If many people now believe that corporate America has violated that contract, is it surprising? At many big corporations, the senior managers have seemed more interested in stuffing their pockets than building for the long term. Gargantuan pay packages are only the start of it. Think boards of directors packed with patsies, books cooked to juice earnings, potential whistleblowers silenced, golden parachutes, and finally taxpayers obliged to save expensively tanned hides. The thing that is really surprising is that it has taken this long for public anger to well up.
Matt Taibbi, in Rolling Stone, made a very similar point earlier:
And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.

In this country, we cheer for people who hit their own home runs – not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.

Thursday, November 3, 2011

Retweet This

$222.7 Billion. 280 Corporations. Three Years.

(h/t Andrew Leonhard, Salon Magazine)

“Most Americans can rightfully complain, ‘I pay more federal income taxes than General Electric, Boeing, DuPont, Wells Fargo, Verizon, etc., etc., all put together.’ That’s an unacceptable situation.”

For Immediate Release: November 3, 2011

Contact: Anne Singer, 202-299-1066, ext. 27, anne@ctj.org

Report: 280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes; Thirty Companies Paid Less Than Zero in Taxes In The Last Three Years

Citizens for Tax Justice and the Institute on Taxation and Economic Policy Release “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010”

Washington, DC – A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”