Corporate greed trumps public need
Last year was the best of times for corporate America and the worst of times for hard-working American families. New reports on corporate profits and inflation demonstrate the fundamental problems in the U.S. economy. Big business reaped big profits while hard-working Americans wept over their declining standard of living.
The dry numbers paint a vivid portrait of corporate greed and human suffering. In the last 12 months ending in January this year, real hourly wages adjusted for inflation declined by 1.7 percent.
Big businesses, in sharp contrast, hit pay dirt last year with estimated profits for S&P 500 companies rising by nearly 50 percent in 2021.
The immense gap between rising corporate profits and decrease in consumer buying power is a sure sign of an economy in decline. We won’t enjoy a true economic recovery until consumers do as well as big business already is. Aggressive government intervention, not laissez faire economics, is necessary to eliminate the stranglehold that Wall Street has used to choke off mobility for the poor and middle class for the last generation.
Gas pump sticker shock is the biggest culprit in the disparity between the fortunes of big corporations and plight of ordinary Americans. While drivers stared in disbelief as the price at the gas pump ticked higher and higher, big oil enjoyed record profits.
Gasoline prices rose dramatically by 40 percent last year, so it was hardly surprising that the oil company behemoths recorded astronomical earnings. The pandemic put most people in a tight financial squeeze, but it was a great year for the giant ExxonMobil which enjoyed a $ 23 billion profit last year. Yes, that’s $23 billion with a “b”.
Inflation is the cruelest tax because it causes much more pain to people at the low end of the financial totem pole than it does to the privileged at the top. Wealthy people can cut back spending for luxury items when prices increase dramatically. But low- and middle-income families can’t cut back when all their spending is for the basic necessities of life like food for their families and gas to get back and forth to work.
Inflation is especially cruel when wealthy Americans and big business aren’t paying their fair share after the big bonanza of former President Trump and congressional Republicans gifted them in 2017.
President Biden wants to be a transformative chief executive, but the Senate is stuck in the mud. His big and bold Build Back Better bill would have eliminated many obstacles to economic equity. The proposal would have reduced subsidies for big oil companies, increased corporate taxes, cut taxes for middle-income earners, and provided much-needed help to poor people.
Under Biden’s leadership, the nation has enjoyed a remarkable economic recovery. The economy has added almost 7 million jobs.
Last year, Congress has enacted two laws, the American Rescue Act and the bipartisan Infrastructure Investment and Jobs Act, which Biden proposed to move America forward and begin the job of rebuilding an economy that collapsed under his predecessor.
Biden has done a lot with little support from GOP lawmakers, as well as a few moderate Democrats. He needs the help of a new class of aggressive progressive congressional Democrats that will help and not hold back the aspirations of ordinary people.
But there’s a long way to go before the economy works well for ordinary Americans. Working families have been running hard for decades without the hope of even reaching for bronze. Meanwhile, profits for bankers and billionaires have run wild and fat cats and plutocrats have won one gold metal after another.
There’s something fundamentally wrong about an economic system that rewards corporate greed and ignores the needs of poor and middle-class families. A growing middle class is essential to a stable democracy. Corporate greed that trumps public need is an open invitation to continued conflict and chaos.
Brad Bannon is a Democratic pollster and CEO of Bannon Communications Research. His podcast, “Deadline D.C. with Brad Bannon,” airs on Periscope TV and the Progressive Voices Network. Follow him on Twitter: @BradBannon
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