As across-the-board federal budget cuts go into effect and the "real pain" predicted by economists and policy experts begins to creep into the lives of everyday people—namely US workers—investors on Wall Street are saying: "bring it on."
Quoted in a New York Times article on Monday that describes the current economy as a "golden age for corporate profit," Savita Subramanian, who heads the equity and quantitative strategy for Bank of America Merrill Lynch, said that despite the terrible times for working people and warnings that nearly three-quarters of a million jobs could be lost this year in the US, "the market wants more austerity."
Reading the article prompted journalist and book author Naomi Klein to tweet:
For workers, the "recovery" looks more like a stick-up. Profits way up, but no jobs
Responding directly to Subramanian's remark that a market push for "austerity" was a good thing for the overall economy, Mark Weisbrot, co-director of the Center for Economic and Policy Research, said such a comment made "no sense at all."
And Weisbrot agrees with Klein's observation that what's being observed should be broadly seen as a robbery by profit-bloated corporations of what should be economic gains more equitably shared with working people.
Though the "sequester" cuts are predicted to cut the growth rate this year by as much as .5 or .7 percent, what economic gains are made, Weisbrot says, "will likely continue to go to the rich, as they have for the past three decades."
As the Times points out, most of the profit gains made by multinational corporations since the 2008 crash have come because of increased productivity and government-backed lending that only larger firms can leverage. Neither of these gains, however—or the profits derived from them—are being shared with workers or lower-income, struggling Americans.
According to the Times:
88 percent of national income growth went to corporate profits while just one percent went to workers’ wages, and hourly earnings for workers actually fell over that time. And while they aren’t investing in job growth, corporations are also paying taxes at a rate that hit a 40-year low in 2011.
But what's the answer to fixing this continued trend where the gains steadily flow to the top?
Great Wealth Robbery":