People often seem puzzled how corporate profits have rebounded since the Great Recession, with many corporations making record earnings, Wall Street booming and the Dow Jones, S&P500, and Nasdaq Indexes at or near historical highs.
The Legacy of the Great Recession using Charts
There seems to be a disconnect between the perception everyone once had that Wall Street represents our economy, because the actual recession still exists in the lives of the American 99%. We are suffering with joblessness, foreclosures, lack of medical care, reduced food budgets, educational debt etc… , while the 1 % have remained elevated above our huddled masses, their policies, mistakes, and agents have foreclosed on the American Dream, there is even talk of a new normal, one with a lower standard of living.
What one needs to understand in all this is that across the world, through culture and time, exaggerated self-interest and desire has always been a human trait, we call it “Greed”. It was hoped that an individual’s upbringing, peer and societal pressure would temper this, and where not, when it proved harmful to others, groups, society, institutions, and government it was regulated by laws. The same laws that regulate individuals and society should restrain the inherent tendencies of our economic system.
As the industrial and postindustrial periods came upon us some common sense laws were put in place, some like the Glass-Steagall Act occurred after unchecked greed caused the “Great Depression”, and they served us well until once again greed gutted the provision that protected us for decades, only to cause a series of financial collapses, that were predicted, ultimately culminating in the latest “Great Deception / Recession” of 2008.
I don’t want to make an Us vs. Them argument for as far apart as the 1% and 99% are socio-economically, put in each other’s shoes and environment there is a near 100% possibility we would be facing the other in our mirror never knowing the difference. We can’t escape our human nature.
And this is where capitalism comes in; though it has over time shown to be the best economic system, its raw form is cold, precise, and calculating like a machine. It is soulless laying waste to everything to get to the end product of profit, it feeds on a sliding scale of tempered self-interest to terrifying greed. Thousands, probably millions over time have suffered, and died under the tyranny of both unrestrained greed and capitalism.
This is the suffering America is feeling now after some sources estimate that up to 50,000 manufacturing plants were closed over the last 18 years, with a loss of 18 million jobs (1/3 direct and 2/3 indirect) which were automated for efficiency, or outsourced and offshored to an exploited foreign labor force for pure increases in corporate profit, leaving a vacuum as they left that was never filled, and probably never will be. Right now, in 2012 continued outsourcing / offshoring of the American Dream for the 99% is continuing.
The main reason American corporations are doing so well, while a historically high number of Americans are in economic free fall is simple. America’s population is 4.6 % of the world’s total population, the rest of the developing world all 95.4 % of it, can supply cheap labor, and consumer product demand. Capital follows the path of least resistance, the corporations that rose from American subsidies (many are still subsidized), innovation, the blood, sweat, and tears of generations of its diversified work force are not dependent upon us anymore. The worlds middle class and living standards are growing, ours are stagnant or in decline. In this new world, the American way of life has been down sized, the America Dream may be remembered as a myth, corporate motive is the bottom line, and they don’t operate on morality or patriotism. They could settle for less profit, less compensation, some European countries have valued the integrity of their country and workers so much that they have. At a certain point money or assets at the top just gather dust instead of flowing through the economy like the life blood that they are, keeping the nation strong, healthy, and prosperous. We need a symbiotic relationship between American workers, corporations, and small businesses. We need the next big thing, a game changer, a “New Deal”.
We had better petition our politicians to do something to renew the American Dream; the American trust, otherwise, “Our best days are in front of us” is graffiti on another piece of collapsing infrastructure.