Monday, July 16, 2012

Corporates and big money invest in politicians, not jobs

You know, if the vaunted "job-creators" actually did what trickle-down flim-flammers said they do, we'd be in an economic boom right now. It was announced at the end of June that U.S. after-tax corporate profits were up 13.1% year-over-year, and were at their highest dollar amount ever at $1.65 trillion. And despite how this story tries to spin it, corporate taxes aren't up all that much to begin with, as corporations are paying pretty much the same amount of taxes they paid 2 or 4 years ago despite the increase in overall profits.

U.S. corporate tax collections.

So why did hiring stall out in the 2nd Quarter with these increased corporate profits(in addition to the fact that seasonal adjustments deflate the number of jobs that actually do get added)? Take a look at the political donation numbers over the same period.

Nationwide, there was a combined $177 million was thrown into the presidential campaigns of Romney and Obama in June alone, and Super PACs also have raised well over $100 million for 2012 so far.

Locally, look at the obscene levels of campaign spending in Wisconsin's June 5 recall election. Scott Walker got $6.9 million thrown his way in the last month before the election, and challenger Tom Barrett received $2.5 million. The Senate and Lt. Gov recall elections will probably show another $2 million or so spent, and we're not even bringing up the outside PAC money and other funds thrown at the race.

And now the big press releases relate to Congress races and their 2nd Quarter reporting, which includes around $2 million going toward Senate Republicans, and Dem Senate candidate Tammy Baldwin getting $2.2 million in donations. For the U.S. House, around $3.7 million was donated to the various candidates in Wisconsin, including a sickening $956,000 for the biggest corporate whore flim-flam artist there is- Paul Ryan.

It's quite clear that the low tax rates on the rich and corporate (along with horseshit Supreme Court decisions in both Citizens United and the recent Montana case) are a big factor in the exponential increase in campaign contributions. These privileged groups have decided to invest in politicians to grow their company's numbers instead of investing in people and products.

And given the last 20+ years of results, can you blame them? It clearly works for the 1%ers. Let me remind you of this graph I found last year, which shows the uncoupling between productivity and wage growth, with all the resulting profits going overseas or into owners' pockets- a combination that has screwed our economy.

Despite this clear evidence that low taxes on the rich and corporate leading to policians being bought off and profits being increasingly wasted on similarly wasteful activities, I guarantee you that Hedge Fund Hovde will be invading my Brewer game with his BS commercial complaining about how "excessive" corporate taxes are in the U.S. and how he'll drop them even further. Corporate media is dependent on these funds to make for profits with their TV and radio stations, so they won't be very inclined to tell the truth about the Eric Hovdes of the world have made millions by stealing the proceeds that resulting from work by people who played by the rules and did things the right way.

Which means it's up to us to turn the tables on these huge fundraising numbers and political spending figures, and make the spending of the money on politicians an issue in itself. The huge amounts of donations from excessive corporate profits are clearly distorting this country's economic results, leaving the vast majority of us out in the cold with stagnant wages and rising needs in a time of increasing profits and productivity. And if we don't stand up and say "THIS ENDS NOW" over the next 6 months, I fear we will reach a tipping a point that we cannot return from in a amicable way.

The only upside is that it should make the market for guillotines very hot. And it won't just be paid-off politicians that'll be feeling the blade.


  1. Jake, has anyone done an analysis of what Wisconsin's economy might be like today if Act 10 had NOT passed? I wonder what our employment situation would be, whether schools would be closing, etc.

  2. I imagine the Wisconsin Budget Project and others have done a version of it. I've got the Walker jobs deficit, which compares the U.S. job growth to Wisconsin's, and we're down over 63,000 jobs from where we should be since March 2011, when Act 10 was signed.

    And by the way, there's another jobs report out tomorrow, and I wouldn't be shocked to see that deficit grow, even with the tepid job growth nationwide.