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No Class Warfare Here!
Whenever liberals note that the rich are getting richer while everyone else is either treading water or sinking, or that profits are up while wages are down, or, worse yet, that profits are up because wages are down, those liberals are invariably accused by conservatives of fomenting class warfare.
Well, goodness knows, we at the Prospect would never stoop so low. We would, however, refer our readers to the July 11 “Eye on the Market” report by J.P. Morgan Chase Chief Investment Officer Michael Cembalest, which demonstrates conclusively that, well, profits are up because wages are down. (“Eye on the Market” is a newsletter that Chase circulates to its large investors.)
The subject of the July 11 report is corporate profits, in particular, the pre-tax profit margins of the S&P 500, the 500 largest publicly-traded companies based in the U.S. Those profit margins, you’ll be glad to know, are close to record highs, nearing 13 percent of company revenues - their highest levels since the mid-1960s. And since medical costs are far higher today than they were back then, how, you may wonder, have those companies climbed back to the profit margins of those earlier, lest costly, more innocent times?
To answer that question, Cembalest looked at the rise in profit margins “from peak to peak” - that is, from their highpoint in 2000, just before the dot-com bust, to their highpoint in 2007, just before the financial crisis. In those seven years, profit margins rose by roughly 1.3 percent - from just under 11 percent of the S&P 500’s revenues to just over 12 percent. (Today, after dipping in the months after the crash, they’re up to near 13 percent, as we noted above.)
Why did they increase from 2000 to 2007? “There are a lot of moving parts in the margin equation,” Cembalest notes, but “reductions in wages and benefits explain the majority of the net improvement in margins. [Emphasis is Cembalest’s.] This trend has continued; as we have shown several times over the last two years, U.S. labor compensation is now at a 50-year low relative to both company sales and U.S. GDP.”
According to Cembalest’s calculations, the reduction in wages and benefits as a percentage of company revenue is responsible for about 75 percent of the increase in those companies’ profit margins. You can read the report, complete with graphs and charts, here.
In other words, medical costs may be rising, but companies are passing those cost increases on to their workers - that is, if they covering their workers’ medical expenses at all. And wages increases? What are they?
Cembalest notes that bringing 2 billion Asians into the global labor force has had a downward effect on American workers’ wages. He neglects to note that the virtual elimination of unions from the private-sector economy has had a negative effect on wage and benefit levels, too. If no one represents workers when it comes time to divide up company revenues, those workers don’t come out very well. Wealth is redistributed from labor to capital.
I realize we’re getting dangerously close to fomenting class warfare here, but don’t blame us. We’re just reporting the view from J.P. Morgan Chase.
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40 Comments so far
Show All"...liberals are invariably accused by conservatives of fomenting class warfare."
Hah! That's the response from the initiators in the class warfare that IS going on. There will be retribution; will "they" be allowed to live?
What has a billionaire done for you today? Secured clean air and water, renewed energy, insured decent health care, reduced classroom size, created 100,000 jobs, paid off 5 TRILLION plus war debt, brought our people home safe from war or made a political contribution?
The billionaires are not the only problem. Several years ago I read a paper by an economist at, I believe, the National Defense Resource Council. She contended that clean air is not a right; clean air is a commodity, which we should be willing to pay for.
Footsoldiers like that justifying anything and everything that is outrageous do the work that the billionaires cannot do themselves.
Hey! I once heard that if they could poke holes in the sky they would charge us for the sunshine.
Look. Now we have "no class warfare." OK. Now would someone explain in plain English why working class and middle class people are taking a dive in theri living standards other than the continued robbery of them by the super rich overly pampered power elites who never had to earn a living a day in their lives? Could parasitism be an apt description of the system we now have without "our consent"nand thus in violation of our democratic rights?
Because the working class is too busy drinking the kool-aid to come togther and fight! For their wages, Benifits, for each other. They'd rather sit on the couch and let somebody else do it. unions are as responsible as anyone. With their colabaration, and phoney one-day demonstrations, I almost said strike but the fact is unions don't rememder how to strike. >^^<
I agree partially. But I would say that the working class is too busy fighting with each other for the left over crumbs [the old divide & conquer strategy]. They can't come together with someone they just stabbed in the back for that extra crumb...Sorry, a current family problem of mine.
Are you sure that is not ADD?
Look. Now we have "no class warfare." OK. Now would someone explain in plain English why working class and middle class people are taking a dive in theri living standards other than the continued robbery of them by the super rich overly pampered power elites who never had to earn a living a day in their lives? Could parasitism be an apt description of the system we now have without "our consent"nand thus in violation of our democratic rights?
Look. Now we have "no class warfare." OK. Now would someone explain in plain English why working class and middle class people are taking a dive in theri living standards other than the continued robbery of them by the super rich overly pampered power elites who never had to earn a living a day in their lives. Could parasitism be an apt description of the system we now have without "our consent" and thus in violation of our democratic rights?
Even our co-workers are the problem. I remember asking them why they (the gun toter and the christian) were voting for Bush, when it was the liberals who had given us clean air, water, etc. See Day in the Life of Joe Middle-Class Republican
By John Gray – Published by TvNewsLies.org – July, 2004
Article link: http://tvnewslies.org/html/day_in_the_life_of_joe_middle-.html
Can't convince stupid people with logical facts! I still try but am literally wasting my breath.
It amazes me that we must keep repeating what was told to us by Warren Buffet several years ago. The American people are either stupid or illiterate. Oh well, keep plugging reality and maybe we can get even the Tea Baggers to fess up to what is going on. Then we can maybe have a revolution at the polls IF the feudalists haven't rigged them beyong recovery.
Then what?? Well, if the upper class liberal contingent hasn't taken away our right to keep and bear arms we could escalate the war. I would not want that but the mere threat of 100 million PO'ed gun owners does worry the feudalists. That is why they are using the the upper class liberal contingent to push for gun control/limitation even though violent crime is way down. WHY? Come on now, it sure isn't because crime is going up, at least not on main street. Wall Street and K Street are a different matter though.
Great analysis!
Yes indeed, class warfare it is. As practiced by the Captains Of Industry.
Finally I spot a Chupacabra!
Yes dear Harold it is class warfare and since when did the rich ever create jobs?
The word rich in itself is the key. To be rich one has to accumulate something of a given value. If one accumulates more of this value than anyone else does, then they are considered “rich”. Then rich means you accumulate, in other words you accrue, you amass, you hoard. Now by my reckoning where does that created one damn job.
Read any good book on economics and you will find that demand, drives the need for jobs. When there is a demand and people have money, then they buy things and then a supply is created to meet that demand.
When people do NOT have money…demand goes down. Manufacturing is the only realm where the demand for goods and services can be produced. The majority of our manufacturing base with our jobs, has all magically been shipped oversea…..by the rich. Back here in reality-land that means people with NO jobs, have no money, hence no demand for goods. The U.S. economy is stagnant.
The only way the rich can save us is to buy up all those manufactured goods overseas and give it away FREE to the people of this country. Since that will never happen, and being more realistic, if the rich want to stay in this country then they need to get out of the way and start paying their fare share of the taxes in this country.
We live in a shared society where we are supposed to be living and working for the good of all. Taxes are how we do that. People with little or no money are stretched to the limit. The middle-class is in freefall and they have no idea where they will be landing. This is a recipe for chaos and unstable populace. You do not want to go there.
Mythical dragons were said to have hoarded their riches. They accumulated and sat on their treasure. Neither did they spin nor weave. Their desires also tended toward the hoarding of virgins. The interpretation of the hoarding of virgins was meant to mean there was no creation of new life. Things under dragons were static. Life is not static. To remain static is to become stagnant and unchanging…..no life no growth. Life has to be shared, and the hoarding of the source of life brings on extinction. Do we continue to feed the dragons, or do we create the means of a generous and thriving life for everyone?
Hit them where it hurts all they care about is Money. Class warfare, no money warfare. Austerity is their next play so how about a little austerity plan of our own? A national campaign and pledge to not spend money on Christmas this year."In protest against the economic attack on the American people by Wall Street, Big Business, and by our own corrupt governments, I pledge to donate the money I usually spend on Christmas, to a local charity that feeds the hungry". Feed the hungry. Starve the beast!
The poorer one is, the more liberal one usually becomes. The richer one is, the more conservative one becomes. Making one poorer makes another richer. Making the rich poorer makes the poor richer. The balance of nature.
Rich conservatives convince the poor that liberalism is bad and conservatism is good so the poor will fight among themselves instead of with the rich.
Direct democracy
making the rich poorer actually only makes the richer richer.
Repeat after me:
" Oh Lord, grant me the serenity to accept what I cannot change, the courage to change what I can, and the wisdom to know the difference. "
The author of that "serenity prayer", Rev. Reinhold Niebuhr, protestant-apologist for capitalist savagery, was one of the most contemptible humans the ever was. I don't believe in heaven, but sometimes, I sure wish there was a hell for people like him.
No matter who made it up, no matter your politics or mine, or path of faith, or station in life, I think this combination of reflection, humility , and ambition should be front and center in every thing we do, see, or hear as long as we breath.
People like you make my life unlivable. To endlessly sit on ones own ass and contemplate ones own belly button is not good for them or for their community.
Having taken the Kool-Aid of “religion” at one time, I found it made me a helpless and useless human being. Faith is a different animal.
People need food, shelter and healthcare…while ya all sit and pray and the coporations prey too….people get sick, and die and children remain homeless.
Action alleviates anxiety, action is needed and if we stoop to SIT TOO LONG in “refection” …..some actions not planned will be taken that this country may never recover from.
I thought your inclusion of the "serenety prayer" was satirical.
The serenity prayer was what Marx had in mind whe he described religion as the opium of the poeple - a soothing, mind-dulling salve to keep the masses passive.
I guess you know that Barry has claimed that Niebuhr is his "favorite philosopher" and "favorite theologian." Explains a lot, doesn't it?
Repeat after me:
" Oh Diogenes, grant me the bitterness to accept what I cannot change, the opportunism to change what I easily can, and the cynicism to know that it makes no difference. "
"Cembalest notes that bringing 2 billion Asians into the global labor force has had a downward effect on American workers’ wages. He neglects to note that the virtual elimination of unions from the private-sector economy has had a negative effect on wage and benefit levels, too. If no one represents workers when it comes time to divide up company revenues, those workers don’t come out very well. Wealth is redistributed from labor to capital."
Right there is the perfect summation of where the U.S. is headed, and why. It IS class warfare. It is unregulated, unbridled, unrestrained capitalism's one and ONLY goal - to make as much profit as possible. With Amerikka's government firmly on the same page as the Corporations, and with its sole purpose to increase their profits, we are headed for 3rd world status at an accelerating pace. Period. Name anything the U.S. does - foreign policy, wars, "defense" spending, you name it - it ALL has ONE purpose: the advancement and increasing profits of the Amerikkan corporations. That's it. That's all. And that is completely incompatible with improving citizens' lives. Slashing benefits and wages, exporting jobs to other countries, raising prices, reducing the average Amerikkan to poverty-stricken masses of serfs - all of these things are very, VERY good for the Corporation. And, thus, VERY good for the Amerikkan government, which is the same thing for all practical purposes.
Look at Amerikka in 25 years and you will be shocked. Or perhaps you won't, if you understand what is really going on.
When the top 1/10 of 1% have manipulated the systen to take the bulk of assets only oceans of blood can result.
" worse yet, that profits are up because wages are down, those liberals are invariably accused by conservatives of fomenting class warfare."
Once again, wages and profit is not an index of class. They are effects of class. The cultural left in this country have got to be joking themselves passing this shite off as criticism. This is thoroughly inverting the structural relation of property ownership, which is the owning of LABOR. LABOR is responsible from the increase in productivity (whether it is "immaterial" labor as in the development of the human intellect, which capital benefits from; or, it is material production such as the mining of minerals, coppers, rubbers, etc. and production "proper").
"The subject of the July 11 report is corporate profits, in particular, the pre-tax profit margins of the S&P 500, the 500 largest publicly-traded companies based in the U.S. Those profit margins, you’ll be glad to know, are close to record highs, nearing 13 percent of company revenues - their highest levels since the mid-1960s. "
Who are these corporations? More importantly, and I think what should be noted in such discussion of "profit margins" is the fact that these companies produce and distribute commodities that we humans require for sustaining our lives. Once again, OWNERSHIP is key here. Ownership of Labor and the materials (or immaterials) required for the reproduction of LIFE. Capital commodifies life. This cultural writing of profit (money) and wages (money in exchange for labor power to buy the commodities these corporations are distributing) as an index to class obfuscates the clear and fundamental STRUCTURAL relaiton between wage labor and capital. It is true as the article indicates that wages are falling...but the profits are rising because productivity has become more effecient as a necessary consequence of the development of the forces of production. That is to say, the the instruments, raw materials, etc that go into the production of what constitutes a commodity.
I posted in another article about the use of class by cultural left writers and pointed to an article that was posted last week about the increase in productivity and that the Department of Labor now indicates that over 78 percent of working jobs are in fact production jobs.
"Cembalest notes that bringing 2 billion Asians into the global labor force has had a downward effect on American workers’ wages."
Of course adding Asia into the Global Capital order will reduce wages around various parts of the Globe. Capital needs cheap labor to increase its rate of surplus profit. Why argue with it? This is not to say that we should go to war and fight the Asians, nor am I suggesting we blame them for the failure of the American political representatives. That's just fascist!
The writer's reading of this right Bourgeois sympathizer by the name of Cembalest turns out to be nothing but cover neoliberal sympathy: reducing the issue of class to that of falling wages, rising profits...What would have made more sense is to connect falling wages, rising profits to that of Labor... Which this writer hints at by sympathizing with Unionization. That's a step in the right direction.
Manufacturing is the only thing that creates jobs. Coporations produce nothing. labor produces. What planet do you live on?
There are no decent life sustaining jobs left in this country for the working class and now the middle class. Oh...right...our jobs were all taken by those bent over out there in the hot, dusty, pesticide ridden fields of the Fortune 500.
Just someone else to blame and when they leave here to find a job that actual pays a livng wage....how are you going to put food on your table.
Labor are the legs that corporations stand on...only they are standing on those legs off shore. People like you will be the first in the streets fighting for the scraps.
You obviously did not closely read my post and rushed off to write out incoherent fascistic prose. The expression "corporation" is a cover for Labor, that was implicit in my text and if you had read closely you would have seen that you and I are in agreement, except on the need to "blame" an other as you so eloquently do.
Sounds right, my co-workers in IT don't take the union seriously. They prefer the sucking-up kool-aide drinknig work all day take the crackberry/laptop PC home approch..
As I look it it's funny in my 20+ years in the private sector I never saw so much back-stabbing and ass-licking,, as opposed to competance, and mutual respect, Nepotisim and Favoritism really make for a sucky work place.
Pity there are no private jobs left. I'd go in in a NY second! >^^<
I am retired now, but I carried a union card for thirty two years. Now read that serenity prayer again.
I have yet to see a satisfactory answer to the economic problems of working people and the unemployed. Perhaps there is none short of revolution and no one has found the trigger for that yet. We seem to be in the quiet before the storm.
"I have yet to see a satisfactory answer to the economic problems of working people and the unemployed."
That's because you grew up watching TV and reading newspapers and after that you went to college!
There are plenty of satisfactory answers to the economic problems of working people and the unemployed that don't require revolution. The problem is that those answers are tabu. Beyond the realm of acceptable discourse.
What we are talking about is the radical communists dragging the US into another Eisenhower Presidency!
I don't mean to foment class warfare but let the rich eat pitchforks.
Better than pitchforks, let them eat HOPE.
conviction and determination will get you further than hope and faith.
Somebody needs to print this up as bumperstickers and T shirts:
THEY ONLY CALL IT CLASS WARFARE WHEN WE FIGHT BACK
And part of fighting back is to stop denying we're engaging it--instead we should point out that we didn't start it, but acknowledge that we have no intention of quietly starving among the crumbs. In any case, the economy won't work without a middle class able to consume.
But--there are new factors in the equation which will change everything: we are running out of cheap easy oil and the atmosphere to dump its emissions into. There are more humans than the Earth can sustainably support even at mostly third-world levels, and our numbers are still growing. Put these brand new factors in together with the current reality that no one talks about them in mainstream discourse, and you have the recipe for cataclysm. I think at least some of the Masters of the Universe are aware of this, and planning for the aftermath, not trying to prevent cataclysm or continue the current civilization much longer.
But maybe not--maybe most of them are living in bubbles of illusion more disconnected from reality than even the ones ordinary Americans mostly inhabit. Part of the problem is corporations' empowerment. People talk about corporations as though they are people, or at least "like" people. But they're not. They're like machines, they're designed to amass profits, and that's what they're doing. Putting them in charge of politics is insane, like wiring down the gas pedal of a car with no driver but a primitive radar system. Of course there will be carnage. But eventually the thing runs out of gas, and then we can clean up the wreckage and start again.
I like mwildfire's comment:
"Somebody needs to print this up as bumperstickers and T shirts:
THEY ONLY CALL IT CLASS WARFARE WHEN WE FIGHT BACK"
Of course, THEN you have to WEAR those shirts to organized events...
This "Class Warfare controversy" has been going on for many decades and indeed is a tactic in the right's strategy to prevent losing CONTROL to other elements/classes in society -- their Number 1 Fear: knowledgeable, organized Resistance. The strategy is to keep the other side (wage earners, health beneficiaries, etc.) off balance, busy, uninformed, swilling alcohol, and watching TV.
Who helps NOT see the class issues? Complicit Unions and the liberal gospel of the Democratic Party work very hard to make sure nobody says or hears the words "Class Warfare" as they pretend to "discuss/debate" American politics. That's their main contribution/collaboration with/for Corporate America.
I think this can be seen as a legacy of the McCarthy Era which dumbed us all down for generations, was close to a death blow to real journalism, and forever altered what was "acceptable" in our vocabularies
Big Capital determines the laws, the elections, our health, our education, what we eat, drink and breathe, IF, where and how we can work and earn, PLUS the content of the Narrative spread by their toadies in the MSM. Without a clear understanding of the ADVERSARIAL money & power relation between Big Capital and the rest of us -- and that presumes an ability to see and conceptualize class interests -- we cannot effectively understand that we need to come together -- OUTside the traditional 2-party power structure -- to resist and organize to save any semblance of Democracy and Constitutionally representative government of the People in the United States.
It hasn't been easy, but we need to look for an alternative model or direction and leadership -- one that SEES the class situation. This is not as easy as having an instant right-wing cash-promoted "Tea Party" that actually pushes Big Capital's Agenda of dumping on workers, unions and government programs.
However, it IS still possible to make a visible stance FOR a People's Agenda now. Even with all its internal problems and lack of effective organizational structure and leadership, there DOES exist a US Green Party that understands the class contradictions and envisions a sustainable world of democratic participation and inclusion. Does it need work? Sure, and maybe you'd be willing to help. But even if you are not ready to participate fully, a Green registration is a strategic and tactical act and sign of support RIGHT NOW for a TotallyNew Direction. That registration is a public declaration in support of a living, viable Constitution, women's and workers' rights, a not-for-profit healthcare system for all, an end to endless war, to torture and to the imperial presidency, and so on. A Green Registration is a rejection of what is being done TO us, and in favor of People-Centered Policies ... like in a functional Democracy. It can be done TODAY, and says a lot. A "independent" registration, to the contrary, while it may indicate being fed up, is completely neutral, it is a "time out zone" permitted by the duopoly which says you won't cause trouble or organize or resist, just stay pissed as you decide whether or not to vote for D or M the next time. They still win. Green Registration, on the other hand, is both a protest AND a declaration of seeking a new direction, new leadership, and creating our own People's Narrative. People can register and then help make that party better and more effective. We need to say OUT LOUD that we're seeking -- and creating -- or own new leadership. Some might still find at times they want to VOTE for someone else. People can do as they feel must in spite of their registration, but, even as a NEW leadership is being forged and empowered, ... That simple Green registration is a tactical tool that means you're Fighting Back starting today! NOW is the time.
Nobody seems to read history anymore, few people even seem to think beyond the next channel.
We live in a Fascist state. Read up on fascism. Mussolini said that his Fascist government would be better described as a Corporate State.
This is what fascism is. It is control by corporations, for corporations, and the only use of the government and judiciary is to protect corporate profits. They pay a stipend for that protection, now endorsed by the "Supreme" Court as a "Constitutional right."
We now live in that "Corporate State." We can rise up and protest, demand our Constitution be put back, intact and functioning, into the halls of government. We can take action to see that our "representatives" in government represent We the People instead of simply doing the will of their corporate masters, or we can continue to quietly live in an increasing fascist state, watching the few rights we have being ground beneath the iron heel of fascism until we are, in fact, mindless serfs of the Corporate Empire, once known as the Constitutional Republic of the United States of America.
Read the information below, see if there is anything there not practiced by the government in some form or other.
Dr. Lawrence Britt has examined the fascist regimes of Hitler (Germany), Mussolini (Italy), Franco (Spain), Suharto (Indonesia) and several Latin American regimes. Britt found 14 defining characteristics common to each:
1. Powerful and Continuing Nationalism - Fascist regimes tend to make constant use of patriotic mottos, slogans, symbols, songs, and other paraphernalia. Flags are seen everywhere, as are flag symbols on clothing and in public displays.
2. Disdain for the Recognition of Human Rights - Because of fear of enemies and the need for security, the people in fascist regimes are persuaded that human rights can be ignored in certain cases because of "need." The people tend to look the other way or even approve of torture, summary executions, assassinations, long incarcerations of prisoners, etc.
3. Identification of Enemies/Scapegoats as a Unifying Cause - The people are rallied into a unifying patriotic frenzy over the need to eliminate a perceived common threat or foe: racial , ethnic or religious minorities; liberals; communists; socialists, terrorists, etc.
4. Supremacy of the Military - Even when there are widespread domestic problems, the military is given a disproportionate amount of government funding, and the domestic agenda is neglected. Soldiers and military service are glamorized.
5. Rampant Sexism - The governments of fascist nations tend to be almost exclusively male-dominated. Under fascist regimes, traditional gender roles are made more rigid. Divorce, abortion and homosexuality are suppressed and the state is represented as the ultimate guardian of the family institution.
6. Controlled Mass Media - Sometimes the media is directly controlled by the government, but in other cases, the media is indirectly controlled by government regulation, or sympathetic media spokespeople and executives. Censorship, especially in war time, is very common.
7. Obsession with National Security - Fear is used as a motivational tool by the government over the masses.
8. Religion and Government are Intertwined - Governments in fascist nations tend to use the most common religion in the nation as a tool to manipulate public opinion. Religious rhetoric and terminology is common from government leaders, even when the major tenets of the religion are diametrically opposed to the government's policies or actions.
9. Corporate Power is Protected - The industrial and business aristocracy of a fascist nation often are the ones who put the government leaders into power, creating a mutually beneficial business/government relationship and power elite.
10. Labor Power is Suppressed - Because the organizing power of labor is the only real threat to a fascist government, labor unions are either eliminated entirely, or are severely suppressed.
11. Disdain for Intellectuals and the Arts - Fascist nations tend to promote and tolerate open hostility to higher education, and academia. It is not uncommon for professors and other academics to be censored or even arrested. Free expression in the arts and letters is openly attacked.
12. Obsession with Crime and Punishment - Under fascist regimes, the police are given almost limitless power to enforce laws. The people are often willing to overlook police abuses and even forego civil liberties in the name of patriotism. There is often a national police force with virtually unlimited power in fascist nations.
13. Rampant Cronyism and Corruption - Fascist regimes almost always are governed by groups of friends and associates who appoint each other to government positions and use governmental power and authority to protect their friends from accountability. It is not uncommon in fascist regimes for national resources and even treasures to be appropriated or even outright stolen by government leaders.
14. Fraudulent Elections - Sometimes elections in fascist nations are a complete sham. Other times elections are manipulated by smear campaigns against or even assassination of opposition candidates, use of legislation to control voting numbers or political district boundaries, and manipulation of the media. Fascist nations also typically use their judiciaries to manipulate or control elections.
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We have two choices. We can learn to live with it, or we can do our utmost to see our nation and our government returned to We the People!
What do YOU choose?