Wednesday, February 5, 2014

The Phony Recovery

A recent study, by the Wall Street Journal of all places, confirms what the bottom 99% of Americans have long suspected for years: the so-called economic "recovery" of the past five years was essentially a joke all along.  In a nutshell, corporate earnings are at a record high, while revenues have been flat for the past five years.  In other words, consumer demand is low because customers are broke, and companies have mainly been "growing" their earnings by cutting cannibalizing their workforce and buying back (i.e. manipulating) their own stock to paper over their flat or declining sales.  All while they sit on trillions of dollars.  It's a zero-sum game, and a vicious cycle.  Thank you, Captain Obvious! 

So how can we break this vicious cycle before the resulting bubble bursts leading to the next big crash?  The answer is really quite clear:  adopt the TSAP party platform ASAP.   But since it is unrealistic to expect either corporate party in Washington to take up an entire platform that threatens their own interests, we have devised a list of the highest-priority measures to take before the inequality-fueled crash of 2016 happens:

  1. Raise the top marginal tax rate to at least 50% (if not 70%) for incomes above $1 million, and simplify the tax code by removing loopholes geared towards the wealthy.
  2. Reduce the corporate tax rate to 20-25%, remove all loopholes, and tax only retained earnings.
  3. Reduce tax rates for the bottom 80% of Americans, and un-tax small businesses with earnings less than $100,000 per year.
  4. Raise the minimum wage to at least $10/hour if not higher, and index it to inflation from now on.
  5. Remove the "sequester" cuts ASAP, and sharply increase funding for infrastructure, education, green energy, and other crucial goals to put Americans back to work.
Of course, it would even better if the entire TSAP platform were adopted, but doing just these five things alone would probably be enough to, in the words of Paul Krugman, "end this depression now".  Because that's what this "recession" really is.  And ending it is long overdue--five years overdue to be precise.