Current Events – Page 12

The system is rigged against you..

The article I'm excerpting here is posted at CNN, a mainstream news site. This is not fringe thinking. This is a conventional view of how economics is supposed to work. I'm not even particularly singling out this one essay, just using it as an example. It starts by explaining that the shortage of workers is intensifying despite more available jobs and the end of enhanced unemployment benefits:

…..many expected workers to go back to work and the nation's labor shortage to ease significantly by September. But recent data suggest that, if anything, the shortage is getting more severe. And though the risk of a severe shortage continuing into 2022 is not the most likely scenario, the chances of it are increasing.

The article cites some reasons for people's continued reluctance to return to work, mainly high savings and fear of covid-19. Shitty pay, shitty bosses, and shitty working conditions are not mentioned. Then it gets down to the real core of the matter:

When businesses have difficulty recruiting and retaining workers, wage acceleration follows. According to the September jobs report, average hourly earnings increased at an annual rate of 6% over the past six months. That is more than double the average rate over the decade prior to the pandemic. Such wage acceleration will take a bite from corporate profits and may lead companies to raise prices. What's more, not only did labor costs dramatically accelerate in 2021, but the inability to find workers impacted some companies' operations and contributed to lower profits.

Lower profits? Can't have that, can we. Obviously, wages going up by 6% is a problem. And problems require solutions.

The US needs to find ways to raise the number of workers through larger and more economically motivated immigration policies…..

I appreciate the reminder that immigration policy based on corporate interests is a gun pointed at the head of the American worker. But that's a side issue. Now, read the next part carefully:

…..a continuing labor shortage would pose a serious risk to the 2022 US inflation and economic growth outlook. First, wages for new hires will continue to rapidly grow. That, on top of an escalating cost of living, will increase wage growth for workers who stay in their jobs. Across the board, higher annual raises and special adjustments to retain workers are likely to further increase companies' overall labor costs. For the first time in decades, the scenario of a wage-price spiral, where higher prices and rising wages feed each other, leading to faster growth in both, could actually hinder economic growth. In such an environment, the Federal Reserve will be forced to raise interest rates multiple times in 2022 and materially slow GDP growth by more than what is already currently being forecasted.

Yes. It actually says that. Rising wages for new hires, wage growth for existing workers, and higher annual raises constitute a risk. They're a threat. The Federal Reserve will "be forced to" take action to put a stop to this dangerous trend.

The skyrocketing wealth of billionaires, and its escalation to even more obscene levels during the recent pandemic, is perfectly OK. When the supermarket check-out girl starts being able to afford better food and a few more toys for the kids, suddenly it's dangerous and drastic action is needed to grind her back down. They don't even really believe in the free market. As long as that free market is letting the parasite class skim off the extra wealth created by workers' increasing productivity, it's working as intended — but as soon as it begins to empower those workers a little, giving them a chance to improve their circumstances, the state needs to intervene in the economy by manipulating interest rates and importing more cheap labor to put a stop to it. By these rules, we can never win.

Oh, and our rising wages could "materially slow GDP growth"? Is the imagination of these types even capable of encompassing the possibility that the mass of people in this country no longer give a shit about GDP growth, when they pay the price for it in hard work and the benefits go to others? When they sacrifice their time and energy and health and dignity to produce more and more wealth which ends up, not in their own hands, but in the form of more and more yachts, mcmansions, dick-shaped rockets, etc in the hands of a tiny aristocracy — and all this is recorded in the economic statistics as "growth"?

That pattern has prevailed since the Reagan administration:

Since the 1980s real income for the median and below has remained practically flat, even as productivity — the value those workers were producing — soared. And if that top 5% red line represented the top 1% or 0.1%, the real parasite class, its rise would be far steeper. That's where that extra value those workers were producing went, not into their own pockets. The parasite class stole it.

If this is what capitalism means, then to hell with capitalism.

And yes, I take this personally. The period from the 1980s to today is my entire working lifetime. I spent those years producing a hell of a lot of value that was skimmed off by others. The same is true for tens of millions of people. It's a fundamentally different reality than what was experienced by someone who began his working life in, say, the 1950s.

The system is rigged against you and in favor of the ultra-wealthy, and has been for decades. You owe it no loyalty. Seize whatever advantages and opportunities you can to take back some of the wealth which you produced and which was taken from you. And vote accordingly.