In the last eight months, voters across the country have raised their voices loud and clear and have left official Washington in a political quandary. What to do about the economy, the budget deficits and the national debt?
Democrats were punished last November when Republicans effectively employed a Mediscare campaign strategy nationally. They attacked the overhaul of the nation’s healthcare system they dubbed Obamacare, telling seniors the Democratic plan that is purported to cut Medicare spending by as much as $500 billion dollars over a ten year period was an attack on their medical coverage. Although the savings were proposed to be the result of savings generated by cutting abuse and fraud, it did not stop the Republicans from demagoguing the issue.
Recently in a special election that took place in a so-called safe Republican congressional district in upstate New York that was once represented by Jack Kemp, the Democratic party candidate won by 4,700 votes. The district has 30,000 more registered Republicans and was considered a no contest until Republican Jane Corwin expressed her unmitigated support for the Republican congressional budget plan developed by Rep. Paul Ryan of Wisconsin.
In the face of these political setbacks, both parties seem more entrenched in their positions and policies than ever. Republicans want to double down on their call for budget cuts while at the same time demanding tax breaks for the wealthy and corporations, while Democrats are diametrically opposed and want to ease the budget problems by selective cuts and increasing government revenues by abandoning the Bush era tax cuts.
Both parties claim public support for their policies.However, neither party has come forward with a plan to address the number one issue facing this country: economic stagnation.Our economy needs a shot in the arm. In the face of record corporate profits, Republicans argue that it is economic uncertainty that keeps giant corporations and smaller businesses who are sitting on trillions of dollars in profit from investing in new equipment, and most importantly, new jobs.
How can this be? In the last 30 years, the federal government has done everything possible to allow corporations unfettered access to markets. The results have been staggering. As millions of Americans face economic hardship and millions more are truly confronted by real economic uncertainty, American corporate profits soar. For example, in the final quarter of 2010, Walmart announced its profits grew by 27 percent. The company made $6 billion in profits in the fourth quarter, up from $4.8 billion a year before and $3.5 billion in the third quarter of 2010. During that same time, Home Depot posted a 72 percent increase in profits, as profits reached $587 million, up from $342 million a year earlier.
According to business writer, Andre Damon, “The discrepancy between revenues and profits is due to the fact that the “recovery” in corporate balance sheets is built on layoffs and speedup.” In fact Walmart cut over 11,000 jobs at its Sam’s Club warehouse stores last year. Home Depot cut 7,000 jobs in 2009 and closed 34 Expo home design stores.
Corporations reported an annualized $1.68 trillion in profit in the fourth quarter of 2010. The previous record was $1.65 trillion in the third quarter of 2006.
Many of the nation’s preeminent companies have posted massive increases in profits this year; General Electric posted worldwide profits of $14.2 billion. JPMorgan Chase profits soared 47 percent to $4.8 billion. Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, reducing wages, laying off workers and wringing more productivity from remaining staff, even as the economy recovered. These record profits have resulted in US corporations sitting on a record $1.93 trillion in cash.
So, why is there trepidation by the business sector relative to the economic policies of the Obama Administration? Why have the companies we bailed out of the worst recession since the Great Depression not reinvested these profits back to the American people who pulled their collective butts out of the fire three short years ago? Instead of investing, companies have used this cash to buy back their own stocks, a strategy that has enriched executives and shareholders at the cost of creating jobs.Is the jobless recovery a result of economic factors or partisan political tactics?