Profit Surge

Beneath all the welcome popular disgust with George W. Bush, it is easy to forget – and important to remember – that some special interests and individuals have reasons to rejoice at the wonders of life under The Worst President Ever (“He’s the Worst Ever,” Washington Post, 3 December 2006). 





The economic men and women of the New York Stock Exchange (NYSE) were being more than polite when they greeted Bush with spontaneous and prolonged applause last week. They were expressing heartfelt capitalist gratitude. The arch-plutocratic, anti-labor Bush administration has overseen a remarkable transfer of wealth from the American working class to the nation’s ever more grotesquely opulent and privileged few. 


Even before George the Second was installed through the Baker-Scalia judicial coup of 12-12-2000 (as dark a day in its own way as 9/11/2001), the U.S. was already by far and away the most unequal and wealth-top-heavy society in the industrialized world.  Thanks in no small part to Bush and under the cover of his state-terrorist “war on terror,” the democracy-disabling U.S. wealth gap (see Paul Street, “Capitalism and Democracy ‘Don’t Mix Very Well’: Reflections on Globalization,” Z Magazine [February 2000], pp. 20-24) has reached terrible new levels.


As Jack Rasmus reports in the most recent Z Magazine, “for the first time since the U.S. government began to collect the data in 1947, wages and salaries no longer constitute more than half of total national income. Corporate profits,” Rasmus observes, “are at their highest levels since WWII, having risen double digits every quarter in the last three and a half years alone and 21.3 percent in the most recent year, 2005, according to the Dow-Jones ‘Market Watch.’ Corporate profit margins are higher than they have been in more than half a century, according to Merril Lynch economist David Rosenburg.  After tax profits are now equal to 8.5 percent of the GDP – that’s more than a trillion dollars – and the highest percent since the end of World War II in 1945. A June 2006 report by the leading investment bank Goldman Sachs aptly summed it up: ‘The most important contribution to the higher profit margins over the past five years has been a decline in Labor’s share of national income.’”


We are returning to the highly regressive income wealth distribution of the late 1920s, with the top 1 percent “earning” (taking) nearly 22 percent of the national income. The United States‘ wealthiest 1 percent now “receives between 19 and 21.5 percent of the [nation's] annual gross domestic product (GDP)…up from 8 percent in 1980.”  This  “represents a nearly full recovery of the roughly 22 percent share of the national income the top 1 percent received just prior to the stock market crash of 1929, the depression of the 1930s and the great leveling of class incomes that followed.  That same 1 percent today also holds more than 35 percent of all assets and wealth of the country – about $ 417 trillion.  They own 51 percent of all stocks and 70 percent of all bonds, own homes worth more than $3 million and have a net worth of $6 million.  The bottom 50 percent of households, nearly 60 million families – all working class – in comparison own only 2.5 percent of the country’s total assets and wealth” (Jack Rasmus, “The Trillion Dollar Income Shift, Part 1,” Z Magazine [February 2007]: 44-49).


The top 1 percent – comprising roughly 1.4 million “tax units” (see Peter Singer, “What Should a Billionaire Give?” New York Times Sunday Magazine, December 17, 2006, p.80) owns more than a third of all U.S. wealth.  The bottom HALF possesses a FORTIETH of “the world’s richest nation’s” net worth.


During the last three years, Rasmus notes, the “earnings” of the top hundredth have resumed their long-term expansion since the late 1970s, which was briefly interrupted by the dot.com bust and economic downturn of 2001.  By “stark contrast,” the nation’s 90 million working class families “never recovered from the 2001 recession” and have “fallen steadily behind.  This dark fact,” Rasmus notes, “is the defining economic characteristic and legacy of the George W. Bush presidency.” By Rasmus’ calculations, United States capitalism – recently hailed by Barack Obama as “our greatest asset” and “a system that for generations has encouraged constant innovation, individual initiative and efficient allocation of resources” (B.O., The Audacity of Hope [New York, 2006], pp. 149-50) – transfers “well over $1 in income” annually from the nation’s working class to “corporations and the wealthiest non-working class households” Rasmus, “Trillion Dollar Income Shift”). 





How rich is the United States bourgeoisie in this age of ever-more imminent catastrophe? Putting aside wealth and focusing just on income (and thereby leaving out much of the full inequality story),  economists Thomas Piketty (Ecole Normale Superieure, Paris-Jourdan) and Emmanuel Saez (University of California-Berkeley), report that the top 0.01 percent (the top ten-thousandth) comprised 14,400 U.S. “tax units” in 2004.  Minus capital gains (a substantial portion of income for the very rich), these 14,400 taxpaying entities received an average income of $12,775 million, making for total “earnings” of $184 billion in 2004. 


That astonishing total was $63 billion greater than the total cost – estimated by the eminent “development economist” Jeffrey Sachs at $121 billion – of meeting the United Nations’ Millennium Goals for 2006 (Singer, “What Should a Billionaire Give?).  Those frequently cited goals include: reducing by half the share of the world’s population that experiences hunger; halving the share of people who live in “extreme poverty” (defined as living on less than one U.S. dollar  per day); reducing by half the proportion of people without access to safe drinking water; halting and beginning to reduce the spread of HIV and AIDS; halting and beginning to reduce malaria and other diseases; guaranteeing that all ch

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