8-19-2014
http://finance.yahoo.com/news/why-d...-greedier-now-than-ever-before-153656998.html
Why Does The Economy Stink? Because America's Owners Are Greedier Now Than Ever Before
The U.S. economy is still sputtering. Why is growth so slow and weak?
One reason is that average American consumers, who account for the vast majority of the spending in the economy, are still strapped.
The reason average American consumers are still strapped, meanwhile, is that America's companies and company owners the small group of Americans who own and control America's corporations are hogging a record percentage of the country's wealth for themselves.
In the past 5 years, American corporations have boosted their profits and share prices by cutting costs (firing people) and buying back stock.
Wage growth for the Americans who are lucky enough to be working has been pathetic the slowest since World War 2.
Meanwhile, America's corporations and their owners have never had it better. Corporate profits just hit another all-time high, both in absolute dollars and as a percent of the economy. And U.S. stocks are at record highs.
Even Scrooge would be appalled.
There's no "law of capitalism" that says that companies have to pay their employees as little as possible. There's no law of capitalism that says companies have to "maximize short-term profits." That's just a story that America's owners made up to justify taking as much of the company's wealth as possible for themselves.
Ironically, this short-term greed on the part of America's owners is likely reducing their long-term wealth: Companies can't grow profits by cutting costs forever, because their profits can't grow higher than their revenues. At some point, revenue growth needs to accelerate. But that won't happen until companies start sharing more of the wealth they create with the folks who create it their employees.
1) Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. (Some people are still blaming economic weakness on "too much regulation" and "too many taxes." That's crap. Maybe little companies are getting smothered by regulation and taxes, but big ones certainly aren't. What they're suffering from is a myopic obsession with short-term profits at the expense of long-term value creation.)
2) Wages as a percent of the economy just hit another all-time low. Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP.
Profit obsession is actually starving the rest of the economy of revenue growth.
In short, our obsession with "maximizing profits" is creating a country of a few million overlords and 300+ million serfs.
http://finance.yahoo.com/news/why-d...-greedier-now-than-ever-before-153656998.html
Why Does The Economy Stink? Because America's Owners Are Greedier Now Than Ever Before
The U.S. economy is still sputtering. Why is growth so slow and weak?
One reason is that average American consumers, who account for the vast majority of the spending in the economy, are still strapped.
The reason average American consumers are still strapped, meanwhile, is that America's companies and company owners the small group of Americans who own and control America's corporations are hogging a record percentage of the country's wealth for themselves.
In the past 5 years, American corporations have boosted their profits and share prices by cutting costs (firing people) and buying back stock.
Wage growth for the Americans who are lucky enough to be working has been pathetic the slowest since World War 2.
Meanwhile, America's corporations and their owners have never had it better. Corporate profits just hit another all-time high, both in absolute dollars and as a percent of the economy. And U.S. stocks are at record highs.
Even Scrooge would be appalled.
There's no "law of capitalism" that says that companies have to pay their employees as little as possible. There's no law of capitalism that says companies have to "maximize short-term profits." That's just a story that America's owners made up to justify taking as much of the company's wealth as possible for themselves.
Ironically, this short-term greed on the part of America's owners is likely reducing their long-term wealth: Companies can't grow profits by cutting costs forever, because their profits can't grow higher than their revenues. At some point, revenue growth needs to accelerate. But that won't happen until companies start sharing more of the wealth they create with the folks who create it their employees.
1) Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. (Some people are still blaming economic weakness on "too much regulation" and "too many taxes." That's crap. Maybe little companies are getting smothered by regulation and taxes, but big ones certainly aren't. What they're suffering from is a myopic obsession with short-term profits at the expense of long-term value creation.)
2) Wages as a percent of the economy just hit another all-time low. Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP.
Profit obsession is actually starving the rest of the economy of revenue growth.
In short, our obsession with "maximizing profits" is creating a country of a few million overlords and 300+ million serfs.
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