Curmudgeon Corner - Something's Wrong In America

It’s absolutely astonishing the profits that corporate America is now making.  Apple, Inc. has so much money on its books that it announced that it wants to move a hundred billion dollars off its balance sheet.  Attention: that was “$100 BILLION.”

Newsweek reported that Apple’s CEO Tim Cook has scheduled Apple to buy back $60 billion worth of its outstanding stock.  Additionally, the other $40 billion would reflect in the form of a 15% increase in the quarterly dividend for the shareholders.   This comes at a time when average workers are struggling just to make ends meet.

From 2005 to 2012, the purchasing power of the dollar has fallen 19% according to the latest estimates from the U.S. Department of Labor.  In addition, the median American family income has fallen while the wealth of the rich and powerful has increased by 30%. 

Corporate America has approximately $1.79 trillion stashed in its coffers.  Think about it: $1.79 trillion.  This is up from $1.39 trillion in 2008.  Yet, the median family income has fallen during the same time period. 

Something is wrong in America.

When Haiti was hit with a devastating earthquake in 2010, it was the people of the U.S. who came to the Haitian’s rescue.  When Hurricane Sandy devastated the east coast of America last year, it was Americans who came to the rescue.  When Iraq, Afghanistan, and now Syria fell to pieces, it was the U.S. citizens who came to their rescue.

Yet, with the American middle-class struggling to make ends meet, corporate America turns a deaf ear and politicians turn a blind eye when it comes to helping our own.  The Pew Research Center reports 85% of middle-class adults say it’s harder today than a decade ago for middle-class people to maintain their standard of living.  While 62% of the people surveyed blame Congress for this decline, about 50% also blame American business institutions.

Something is wrong in America.

What would happen if companies like Apple, Wal-Mart, or all other big corporation suddenly decided that they had too much cash sitting on their balance sheets and gave the bottom 75% of their work force a substantial pay raise? 

What if the lowest paid store clerk’s minimum wage got doubled?  What if the poorest paid tellers at your local bank branch got their salaries bumped up substantially?  

Would the rich take it in the shorts?  No. 

It’s doubtful they would miss the money.

Would it hurt banks to pay a decent dividend, maybe 5%, like in the “good old days” when banks were actually banks?  Today, banks are often financial machines that practice a legalized brand of extortion, sucking every cent they can out of depositors and borrowers.  They make huge profits, hoard their gains, and give very little back to the communities they serve.

Apple operates about 402 company store which employ 42,600 people at wages, which are relative low. If they would to give these people a decent wage, think what the effect would be on our economy.  These hard working people would eat out more often, spend more money, buy houses (which the lenders would love), and take nice trips more often. 

If Apple were to up the pay to this one group by $10 a week, it would add over $20 million dollars to our economy.  Now just think if Wal-Mart did the same thing.  The effect on our economy would be staggering.  Other big companies and banks could jump on the bandwagon, and so on and so on, until our economy was really humming along.

Why can’t this happen?  Simple.  It’s one three letter word: Ego

One three letter word: ego.  The need to show strength, show super ability, and show super power to control others is what stops those with the money from seeing the need for a stronger, more robust middle class.  No longer do they believe in a trickle-down economy, they believe in total control.

Something is wrong in America.

(Larry Momo writes columns for the Washington Times Community Section and the San Pedro News Pilot.)

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Comment by Larry Momo on May 6, 2013 at 11:05pm

Lee,

My editorial does not say to take from the rich and give to the poor.  What it proposes is to allow the working people who make our companies successful and profitable to participate at a high level of income payment for their labor.  

As for redistributing the wealth, one only has to look to the 19th & 20th century to see what happens when a disproportionate shift of wealth takes place towards the top few, i.e. the Russian Revolution, Hitler's rise to power, the French Revolution just to name a few.  

"You can not multiply wealth by dividing it" is absurd.  For thousands of years merchants have taken a bit of cloth, divided it, sold half for a larger piece, then divided the larger piece, then sold half for even a larger piece and kept doing that until one day they were all rich.  

No one should ever receive a hand-out, but a hand-up has helped a lot of folks.

Government has only one function, to keep the playing field level.  Right now, the government is failing its mission.  

No matter what system our government tries to use, someone will figure a way to "game" the system.  It does mean the system is bad, it means those people need to be rooted out and dealt with; i.e. medicare fraud.  

I think there is a lot of room for more people to enjoy a decent level of living and still allow the rich to be rich.

Comment by Lee Dworshak on May 6, 2013 at 11:36am

So Larry, we should redistribute the wealth? Is that what you are advocating?

Here's a good example of why that won't work. (author source was not provided)

"An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no... one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation."

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