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Amidst record corporate profits, ordinary people still struggling

BY GUEST OPINION | DECEMBER 03, 2010 7:20 AM

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The New York Times recently reported that "American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report." This is the highest figure since the government started keeping statistics over 60 years ago.

With unemployment at record highs (almost 10 percent) and many jobs permanently gone, if this doesn't make the average Joe and Jane mad as hell I don't know what will.

Let me make a correction here: The nearly 10 percent unemployment is a government lie to make us feel that it's not so bad. MoneyCentral.msn pointed out earlier this year out that "the Labor Department's statistics don't include the underemployed and those who have stopped looking for work. This alternative measure creates a much higher number." That number is between 17 percent and 20 percent.

And according to renowned economist Joseph Stiglitz, the wars in Afghanistan and Iraq will cost us $4 trillion to 6 trillion.

For an "old school" political analyst like me, American society has morphed into something I don't recognize and certainly don't like.

I watched all the news media ranting about intrusive searches at airports and conducting deep analyses about what it means that Sarah Palin's daughter Bristol did not win first place in "Dancing with the Stars." I saw no in-depth reflection about what it means that some of the very culprits responsible for the financial crisis and for the massive taxpayer bailout are now rolling in the dough.

I heard very little about the fact that these same companies are not hiring more Americans and, indeed, continue to fire people to become more "efficient" and "profitable." In the United States, "worker productivity" is now measured by how much work we can squeeze out of employees while cutting their salaries and benefits.

Yet there is very little push back and hardly any "moral" outrage from anyone. Where are the religious leaders and clergy for whom this should be a moral dilemma of massive proportions?

Where are the politicians who should be speaking truth to power and alarming us that down this path is the destruction of our middle-class-driven economy?

My first job as a professor was in the Hamptons. I love the Hamptons. The houses are magnificent, and I could see the Great Gatsby's house from my office. But in a time of great economic suffering and a country on its knees isn't this just distasteful, if not morally corrupt?

In their excellent new book, Winner-Take-All Politics, political scientists Jacob Hacker and Paul Pierson report that between 1979 and 2006, the bottom 20 percent of the U.S. population had real income growth of 0.3 percent, and the middle 20 percent had real income growth of 0.7 percent.

The top 1 percent enjoyed real income growth of an incredible 260 percent.

Maybe I am just out of it and don't understand the new morality in America. Maybe it was always this way, but everyone was getting enough of a slice of the pie — even if it was small — that these excesses did not matter. Maybe I need to retire and let someone who understands what's happening to American write these editorial columns.

Or maybe I am right and anyone who does not find this state of affairs shocking and unacceptable is indifferent or just plain ignorant. Yeah, I think I'll stick with my original version of the story. This is all wrong for America.

Steffen Schmidt is professor of political science at Iowa State University. A version of this column first appeared on insideriowa.com, where Schmidt serves as senior political correspondent.


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