I thought I might never see this:
“It appears that purchasing managers have undergone a reality check and may have suddenly woken up to the reality that no one is getting hired who can buy all the goods that their firms can produce,” said Steven Ricchiuto, chief economist at Mizuho Securities US.[1]
So capitalists are finally acknowledging that people have to have (well paid) jobs in order for them to consume? Perhaps, but if you thought that might mean they might take some responsibility for seeing that that happens,
Further data disappointment came as ADP Employer Services’ reported a smaller than expected increase in private payrolls last month – which did little to bolster confidence over Friday’s official non-farm figures.[2]
This after yet another experiment with trickle-down economics in the federal government. Writing for Forbes a couple years ago, Peter Ferrara insisted,
Ireland adopted a 12.5% corporate rate in 1988, when it had the second-lowest per capita income in Europe. Today, Ireland enjoys the second-highest incomes in Europe, and it raises more in corporate taxes as a percent of gross domestic product than the U.S. does with a tax rate three times higher.
For the U.S. economy to remain internationally competitive, the federal corporate rate should be slashed to 20%. The heavily burdensome federal corporate capital gains rate should also be cut from 35% to the current individual rate of 15%, and that individual rate and the dividends tax rate of 15% should be made permanent. The capital gains tax is a second level of taxation on capital, not a loophole providing lower rates for capital income.[3]
So now that Ireland is one of Europe’s economic basket cases, how’s that working out for him? It’s difficult to tell. He moved on to forecasting Obama’s resignation.[4] But Forbes is still publishing his op-eds.
The modern purpose of a corporation is to immunize individual investors from liability. It does this in part by giving corporations many of the features of personhood. Corporations can be sued. They can borrow money and they can go bankrupt. This is supposed to enable capitalists to expand the economy by doing things that are risky—too risky for individuals.
The modern purpose of a multinational corporation is to allocate business operations in the most advantageous locations throughout the world. So if India is willing to dislocate hundreds of thousands of people to make way for a reservoir to provide cheap power and to overlook other environmental costs,[5] multinational corporations locate in India. If the Philippines is willing to absorb the infrastructure costs of production facilities, multinational corporations build factories in the Philippines. If China has lower labor costs, multinational corporations hire in China. And so it goes, as governments compete to attract business, overlooking issues of social and environmental responsibility.
The function of a corporation is to evade responsibility.
So when it comes even to creating the jobs that would enable people to buy what corporations produce, who are you looking at?
- [1]Dave Shellock, “Overview: Weak US data knocks risk appetite,” Financial Times, May 4, 2011, http://www.ft.com/cms/s/0/3a0f7a02-7696-11e0-bd5d-00144feabdc0.html↩
- [2]Shellock, “Overview.”↩
- [3]Peter Ferrara, “Tax Cuts Would Really Stimulate,” Forbes, February 4, 2009, http://www.forbes.com/2009/02/04/tax-cut-stimulus-opinions-contributors_0204_peter_ferrara.html↩
- [4]Peter Ferrara, “The Coming Resignation of Barack Obama,” American Spectator, June 2, 2010, http://spectator.org/archives/2010/06/02/the-coming-resignation-of-bara↩
- [5]Arundhati Roy, An Ordinary Person’s Guide to Empire (Cambridge, MA: South End, 2004).↩