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Tuesday, June 11, 2013

The Robber Barons

 Hourly pay for US non-farm workers fell at an annual rate of 3.8 percent in the first three months of the year. This represents the biggest decline in wages on record.  Factory workers took an even bigger hit. They saw their wages plunge by nearly 7 percent in the same period. In the 1970s, wages accounted for more than 50 percent of GDP. Now that figure has dwindled to less than 44 percent and is forecast to drop even further.

Meantime, American companies are sitting on  a record amount of cash. U.S. non-financial corporations held $1.78 trillion in cash and other liquid assets in the first quarter of the year, up $46 billion from the end of 2012. Many companies are involved in stock buy-backs. The beauty of buy-backs is that they raise share prices higher without adding  to production. The rich are getting richer by paper transactions. Companies authorize buy-backs and carry them out from time to time through brokerages as a way to reduce outstanding stock and increase per-share earnings. U.S. firms have announced about $275 billion of re-purchases this quarter, the highest total in more than five years.

The  1 percenters have recouped all their losses from the financial crisis, but working people are still facing the same problems they’ve faced for the last 5 years; falling or stagnant  paychecks, rising  unemployment, and increasing government cutbacks on benefits.

The process of accumulation and appropriation, or theft, helps explain global inequality where the richest 200 people now have more wealth than the poorest 3.5 billion - more than half of the world's population.

Taken from here
 

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