Tuesday, April 03, 2012

Corporations Screwing a Youth Near You

The same problems plaguing the U.S. also appear to be present across much of the West, though to varying degrees (with Sweden, Norway and Finland -- the three most socially democratic nations -- suffering less). This article from the Guardian (Youth Unemployment Contract Scheme) highlights one problem that exists in both the U.S. and U.K. economies today: the fact that increased profits have either been hijacked by top executives (see article below on the 93% of new income that went to the top 1% in the U.S. last year) or put into increasingly bulging cash reserves. A key aspect of any capitalist economy is investment, the need for persistent growth. If growth stymies, the economy suffers and begins to atrophy. This is what has been happening for many years, but particularly since the start of this century; and more acutely since 2007 when credit markets dried up. Without investment in technology, productive innovation and expansion (of business, capital and labor), the economy cannot expand. This is particularly true of labor; generally considered a key component of growth. It is true, of course, that much of the production process has moved overseas, but if we continue to allow corporations to shrink the size and purchasing power of the middle (and working) class, who will buy the products being made in China, India and across the Global South? How long is downsizing and outsourcing going to reap benefits at the costs of the citizens of purportedly democratic countries? Have we really amused the population to death enough to stop them from demanding change? The short-sightedness of the current greed culture on Wall Street and in Corporate boardrooms has certainly accrued huge benefits for the few, but it seems unsustainable in the long run. As I have argued before, it appears the only social institution with the power to counteract this creative destruction is governments reasserting their responsibility to serve the common good. Let's hope they some day take up the charge ...

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