The title for this post is taken from a message on a billboard for Manhattan Mini Storage first displayed in in the Tribeca area of NYC earlier this year of this year.
And though income inequality continues to worsen, the wealthy and major corporations have stashed trillions of ill-gotten gains overseas safely away from the hands of both marauding members of the proletariat, but also for the clutches of the IRS.
The biggest American corporations are reporting record profits, official data shows. But the companies are not investing their windfalls in business expansion, which would mean jobs. Nor are they paying profits out to shareholders as dividends.
Instead, the biggest companies are putting profits into the corporate equivalent of a mattress. They are hoarding what just a few years ago would have been considered unimaginable pools of cash and buying risk-free securities that can be instantly converted to cash, which together are known in accounting parlance as liquid assets. [...]
My analysis of the latest data from the Federal Reserve, the IRS and corporate reports shows that American businesses last year held almost $7.9 trillion of liquid assets worldwide. [...]
My estimate is conservative. I did not count cash due to American companies from their offshore subsidiaries as accounts receivable because the IRS does not provide fine details on these additional trillions of dollars.
Consider the debate over federal spending. Uncle Sam spent $3.5 trillion in fiscal 2013. Corporations hold liquid assets equal to all the money the federal government spent that year plus 2012 and three months of 2011.
In short, the rich have the equivalent of their rainy day funds, much of which - nearly Two Trillion dollars by multinational corporations according to Richard Rubin of Bloomberg - is safely placed in offshore tax havens.
U.S. multinational companies reported earning 43 percent of their 2008 overseas profits in Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland, more than five times the share of workers and investment they have in those jurisdictions, according to a 2013 Congressional Research Service report.
That report cites academic estimates of the annual revenue loss to the U.S. that ranges from $30 billion to $90 billion.
And this has been going on for years, as Investigative journalist David Cay Johnston's article indicates. Indeed, since 1994, "liquid assets have grown at about six times sales..." That's a remarkable statistic.
You wonder why job growth is so limited in the US? Why wages for everyone without a Senior Executive Vice President or better as their title has stagnated? Why the stock market is so high, while people are being laid off right and left, and revenues for bargain retail behemoths, such as Walmart have fallen dramatically? Because the rich and multinational corporations are not investing this hoard in infrastructure (plants and facilities for manufacturing, for example), research and development, or even distributing much in the way of dividends. And they sure as heck on not focused on creating jobs - at least not in the United States. Indeed, quite the contrary:
A wave of layoff announcements over the past week has exposed the reality of the economic “recovery” touted by the Obama administration and governments worldwide. Deep-going job cuts are hitting the manufacturing, pharmaceutical, technology and retail sectors across North America, Europe and Japan.
Despite stagnant revenues, reflecting sluggish economic growth, companies are reporting booming profits. These profit gains are almost entirely due to a relentless assault on jobs, wages and working conditions being carried out by the ruling class.
I see this everyday in my city. Twenty, thirty and even forty-somethings are working lower paid jobs with less hours. And among the college educated (i.e., those with at least a bachelor's degree), fewer and fewer of them are working in fields related to their college majors.
Venerable consulting firm McKinsey recently published an insightful report on recent college graduates. According to the report, which surveyed almost 5,000 graduates, one-third of respondents stated that college "did not prepare them well for employment." The report's somewhat sobering findings include the fact that four to five times more graduates are working in sectors such as restaurants or retail than would prefer to. While working at a restaurant throughout college is an attractive proposition for many young people, making this line of work a full-time career was certainly not the goal.
This obviously puts the lie to the oft cited conventional wisdom that if you work hard enough and get a college degree, you will ensure yourself a bright financial future. Unfortunately, despite the rhetoric from the right, which is frequently parroted verbatim by what passes for the mainstream 'liberal' media, the reason that economic opportunities for young people have declined, and that job growth is slow and primarily in sectors paying lower wages and salaries, is not due to the fact that corporations are taxed too much. While millions of people under 40 struggle with student loan debts approaching astronomical levels, our major corporations, for the most part are wallowing in record profits and record payouts to their senior executives (or in the case of Wall Street, add in investment bankers and hedge fund managers).
And yet, the upper crust in our society seem to believe that they are under attack due to a media generated wave of envy by the undeserving poor, which as we know by now, includes most of the former middle class in this country.
My college educated son with two degrees lives at home because he can't find a job. Even among people his age who do work, living with their parents is hardly uncommon. One in three people between the ages of 18 to 34 live with their parents or their parent-in-law, according to a study commissioned by the National Association of Home Builders. What is really depressing is the rate of young adults living at home due to increased unemployment.
Around ages 25 to 34, better educated and more experienced young adults typically enter the stage in their lives when they move onto more stable, higher-paying jobs. The ability to find these jobs plays an increasing role in the decision of older young adults to leave parental homes and strike out on their own. In 2012 the share of unemployed in this age group was 14 percent among adults living with parents compared to 6 percent among adults of the same age who left parents’ homes. Rising unemployment rates and ever increasing sense of economic instability during the Great recession forced many young adults to postpone their decision to leave parents’ homes. The shares of unemployed young adults ages 25 to 34 living with parents doubled since 2000, when 7 percent of young adults living with parents were unemployed. The share of unemployed among same age adults living independently was less than 4 percent in 2000.
It should probably come as no surprise, that this astonishing increase in adult children living at home due to unemployment over the last 14 years correlates with the Bush era of tax cuts and deregulation, which primarily benefited the wealthiest Americans and the largest corporations. Yet, when the financial and housing crisis that triggered the so-called "Great Recession" occurred, and unemployment rose, who received the greatest share of the Federal government's largesse? Wall Street and the financial community. Though some relief for the banks was needed, one can argue that just as much money, if not more, was required to be spent by the government to spur job growth.
The 2009 Stimulus package of 787 Billion dollars contained roughly $500 Billion of actual spending for infrastructure, unemployment benefits and so forth, with the remainder of about $288 consisting of tax credits and other tax relief for individuals and businesses. Compare that figure with the cost of federal funds, guarantees and other benefits shoveled into the gaping maw of our largest financial institutions with little or no oversight on what they could do with those monies.
Recently, a pair of PhD students at the University of Missouri-Kansas City tried to assess the total size of the Fed’s commitments—not just loans made, but asset purchases as well. The bottom line: a Federal Reserve bailout commitment in excess of $29 trillion.
Now to be sure, the Federal Reserve and the Treasury Department did not turn over $29 trillion to the Bankers and other eligible financial institutions, but they did allow them to receive nearly interest free loans from the Federal Reserve Bank, as well as monies from the TARP program, which far exceeded anything Mr. or Ms. Average American received as a result of spending under the 2009 Stimulus package. And this fails also to account for the Automotive industry bailout, which, yes, did save some jobs, but was far more beneficial to the bottom line of GM and Chrysler. The winners in this battle for Government assistance clearly belong to the eponymous One Percent, and even more to to the .01 Percent of Americans, i.e., those with plenty of money and no inclination to re-invest it in ways that would benefit society at large.
Unfortunately, not enough elected officials and major figures in the Democratic Party have consistently made the case for a vigorous change to the economic policies our government currently pursues. That is, few national Democrats vigorously push for policies that would actually lower unemployment and increase the number of better paying jobs. These policies would include, without limitation, greater government spending on major infrastructure (roads, bridges, the electrical grid, renewable energy, etc.), as well as programs for student loan debt relief, improving the hand of labor unions vis-a-vis management, increasing the minimum wage and extending unemployment benefits.
Even now, many Democrats are running away from the greatest accomplishment of the Obama administration in terms of its beneficial effects for the 99% - The Affordable Care Act. While flawed because it did not opt for Medicare for all (i.e., a single payer system) or even provide a "public option to compete with the health insurance industry cartels, it has vastly improved the lives of millions of Americans who now can obtain coverage that provides real benefits should they experience costly illnesses and other medical expenses. At the same time, not many National Dems have made promoting other parts of a progressive agenda a priority. Issues such as Climate Change, Renewable Energy, Expanding and increasing Social Security, reining in the out of control Big Banks, and increasing taxes on the wealthiest Americans while eliminating subsidies to our largest and most profitable corporations are infrequently brought to the fore when Democrats promote their "brand" and never with the same conviction one feels when Republicans promote their agenda.
A few Democrats have shown they support progressive causes, I'll grant you that, but not enough for the average low information and/or discouraged voter to see much of a difference between the two parties. In a cases like this year, elections are decided more often based on the popularity of the President and individual candidates, than by a referendum on the competing and sharply delineated differences between the two parties' vision for the future. And to be honest, there isn't much of a consistent vision by Democrats.
The Republicans vision, on the other hand, is pretty clear: Lower taxes, cut spending (except on the military), repeal 'Obamacare,' and protect Real Americans' inalienable rights to God (the Christian one), Guns and Getting Big Guvmint off their back. Even these little hissy fits by our oligarchs about an epidemic of "wealth envy" are just part of the continual campaign by the GOP to gin up support for whatever the rich want. One more victimization card the right wing plays. Despite the billboard slogan I used as the title to this blog post, we, collectively as a nation, are not anywhere close to a revolution from the left. The failure of the Occupy Movement - thanks in no small part to the national Democrats refusal to acknowledge them, much less promise solutions for their legitimate grievances - told us all we need to know about the likelihood of an American Spring.
Indeed, I'd argue the reverse is more likely, so long as the Democrats continue to campaign as the party of "vote for us because we aren't as mean and nasty as those GOP People." Unless, the Democrats make this election one between a progressive vision for our country and the one Republicans have been running on since Ronald Reagan took office, they will lose seats in the Senate and they will not regain a majority in the House. The Republican base will turn out this Fall. But will enough people turn out for Democrats, especially young people? What are Democrats offering them that will make not only a short term improvement in their lives but will also give them hope for their futures?
I don't believe most people turn out to vote in an off year election simply because a party claims it is the lesser of two evils. Dems need to energize those voters, make them into believers in the Democratic Party's cause, not put them to sleep with endless bable about deficits and debt relief or other debates in which young people are not invested. All that will do is make them feel their vote is worthless, regardless of the R or D beside the name on the ballot.
The longer the Democratic Party, as a whole, is content to waffle on the fundamental issues of our times, the less likely they are to convince the young voters they need to win elections to show up at the polls. Ask yourself what does the Democratic Party stand for? Then ask yourself if the principles and policies they propose offer any hope to the great mass of voters that electing Dems will make a positive difference in their lives? Right now, I believe most voters would answer that last question "no," and that would include many people who will make the effort to vote and pull the switch in November for the Democratic ticket.
As for our modern day Aristocrats? I think they're safe, and they know it, regardless of what happens on election day this year or in 2016, or in future elections after that for as far as they can see. And that to me is the saddest thing about our country's current political scene.