Saturday, November 27, 2010

The Economic Oligarchy

Recent data:

  • National unemployment rate: 9.6%
  • Unemployment rate for those with bachelors degree: 4.7%
  • Unemployment rate for those with less than high school: 15%

Headline from New York Times on Tuesday:

Corporate Profits Were the Highest on Record Last Quarter”

Two lessons emerge from this information.

First, when the recession got rough, the financial sector convinced our government to spread their pain among the taxpayers rather than just their shareholders -- the former being a larger base of help than the reluctant latter, of course. So we bailed out the financial sector and a couple of manufacturing companies that made cars people weren't buying.

How does the private sector repay us when the economy climbs off the bottom of the hole? Admittedly, some of them repay the government. But as the economy improves, most corporations pour the benefits into profits rather than spread the wealth by hiring. And then the primary corporate decision-makers hide behind the curtain created by the Supreme Court, and fund candidates who promise to suppress tax rates for the highest earners.

Second lesson: stay in school. If you are not ready for a job that requires higher skills, you will be left behind, living on the fringe of the income stream. Those with bachelors degrees are employed. Those who dropped out of high school might as well be living in 1933.

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