Archive for August 16th, 2010

Flash: Michael Moore may be onto something… well, kinda.

August 16, 2010

An article in The Daily Beast — by super-sized, unconscionably rich, uber-lib Michael Moore – caught my eye.  In it, Moore says:

To understand what’s happening (in the economy), we have to focus on the bottom line, just like CEOs do.

And what the bottom line says is that the entire business world has figured out how to make huge buckets of money without hiring people to work for them.

I’m not sure how in the long run this benefits these companies. Maybe the same robots who make most things now are also programmed to buy them?

But the upshot is this: We have to face the fact that most of America’s CEOs don’t want the economy to get “better.”

Because for them, it couldn’t get better—they’ve got profit coming out their ears, while with 9.5 percent unemployment their entire workforce is too scared to ask for a 25 cent-an-hour raise.

They’d be happy to have things stay just like they are now. Forever.

Profits Up at GM! And You’re Still Unemployed by Michael Moore, Aug 13, 2001
http://www.thedailybeast.com/blogs-and-stories/2010-08-13/gm-profits-michael-moore-on-unemployment-gm-hiring-new-ceo/?cid=hp:mainpromo1

I think Moore’s conclusion that CEOs don’t want the economy to get better is just plain nuts.

But, he’s onto something: the entire business world has figured out how to make huge buckets of money without hiring people.

Well, maybe not the entire business world, but a big chunk of it.

Fact is that businesses always use economic slowdowns to purge themselves of organizational fat that has accumulated in good years.  This slowdown is no exception.

The differences:

(1) more fat had accumulated this time so the cuts appear deeper

(2) companies are rebuilding their cash balances so that – if there is a double dip – they won’t have to grovel for gov’t aid again

(3) few companies  are expecting a quick return to growth —  so hiring freezes are in place

(4) surviving employees are stepping up and delivering productivity increases

(5) ObamaCare, etc., have substantially increased the cost per employee – so there’s less economic advantage to hiring.

Posted in Economics, Employment - Jobs, Financial Crisis | 1 Comment »

How many millionaires are there in the U.S. ? … and some other interesting economic factoids

August 16, 2010

For an update see our later post How many millionaires & billionaires are there in the US ?

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From the BusinessInsider.com :

  • In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million.
  • The top 10% of Americans now earn around 50% of our national income.
  • 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
  • The bottom 80 percent of American households held about 7% of the liquid financial assets.
  • The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
  • 61 percent of Americans “always or usually” live paycheck to paycheck, which isup from 49 percent in 2008 and 43 percent in 2007.
  • More than 40 million Americans are on food stamps.
  • 21 percent of all children in the United States are living below the poverty line
  • 36 percent of Americans say that they don’t contribute anything to retirement savings.
  • 43 percent of Americans have less than $10,000 saved up for retirement.
  • 24% of American workers say that they have postponed their planned retirement age in the past year.
  • The average federal worker now earns 60% MORE than the average worker in the private sector.
  • More than 40% of Americans who are employed are now working in service jobs.
  • In China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

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Source: 22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America 

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Posted in Economics, Employment - Jobs | 15 Comments »