Just this once, “It’s so unfair!” is spot-on
The American recovery
There’s a very interesting piece at Zero Hedge today. One or two of the contributors to this site are lively bordering on bonkers, but the article which caught my eye (by Michael Snyder, with whose work I’m unfamiliar) does something very useful: put some hard facts on the transfer of wealth away from the West and towards the East, rather than just declaring it to be a fact. The analysis also restores one’s faith in the existence of American realism – I mean the mental state, not the art-form.
Called ’23 Facts which prove globalism is pushing US middle class wealth down to Third-World levels’, some of it is the bleedin’ obvious, but most if it isn’t. (NB when Americans say ‘middle class’ they mean clerical and skilled working class as we would define it – c1c2, to use the antediluvian demographic system).
To save you reading the whole thing, these are the best gems:
* The U.S. trade deficit was about 33 percent larger in 2010 than it was in 2009.
* According to a new report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth.
* Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
* In the United States, exports account for approximately 13 percent of GDP. (This is the truly significant number, and is very similar to that of the UK. It’s called lousy marketing, antiquated product design, consumption mania, and the demands of the credit sector to stimulate that consumption…..aka, the banks.)
* The United States currently has 7.7 million fewer payroll jobs than it did back in December 2007.
* Today, only 9 percent of the jobs in the United States are manufacturing jobs. (So all that bank trading ain’t doin’ diddly-squat, huh? Fancy that).
* Just as in the UK, 8.4 million Americans are currently doing part-time jobs for “economic reasons”. These jobs are mostly very poorly paid service jobs.
Last year, The Slog posted to show that a real US economic recovery would increase the trade deficit and only make matters worse. It’s a Page One observation, but to listen to Bernanke and Geithner, you’d never know that.
We need to change the model, pure and simple. This has been obvious since 2004, and future generations will wonder only at the time it’s taking for the Establishments of the West to get there. They needn’t wonder: the boil isn’t being lanced because it doesn’t suit the political or financial classes to do that. The Snyder piece is an alarm call for everyone not wearing ear-plugs.
Related: June 2010 – THE LAST THING THE US NEEDS IS A RECOVERY
January 2011 – WHY THE UK ECONOMIC MODEL CAN’T PROVIDE WHAT WE NEED
The truth about corporate tax
This second piece is not unconnected to the one above. My beef with Government comments and statistics on both sides of the pond is this: what’s the point of talking about the tax paid by multinationals and banks if neither of them contribute much to our export drive?
This ‘See Lloyd pay tax’ bollocks is of course Number One getout-soundbite for the Bob Diamonds of this world – all those greedy cynics who realised years ago that legislators are dumber than a retarded gnat. But it absolutely won’t wash. Today’s FT about the latest Oxford University study repeats the shibboleth – ‘81% of all corporation tax is paid by the largest 1 per cent of companies’ – but omits to mention that
(a) The rate is obscenely low, thanks to avoidance managed by shoals of tax accountants; and
(b) Merger & Acquisition is a net reducer of jobs: it is small and medium sized businesses that create jobs – and they are taxed at a rate, on average, three times greater than that paid in the end by Big Business.
And there are other things in the report that Bob Diamond didn’t mention to the Select Committee last month.
In the financial sector, a bill of almost £11bn was paid in 2006-07, before falling back to about £4.5bn in 2009-10. (For reasons of readership blood pressure, the £700 billion liability hole in the Treasury is not included).
And tax revenue from the corporate sector as a whole topped out in 2007-08 at about £46bn, before falling back to under £36bn in 2009-10.
The large corporate and banking institutions in Britain pay so little ‘real’ tax, they cough up twice as much on employers’ national insurance contributions and business rates as they do on corporation tax.
That is a staggering – and socially unacceptable – statistic…IMHO, as we comment threaders are wont to say.
The research found that about 15% of large and highly profitable companies pay no corporation tax at all, so it was hardly surprising when David Gauke, Exchequer secretary to the Treasury, welcomed the research this morning, and called on businesses to be “more transparent”. It’s a funny word is transparent, but I think we all know what he meant.
The ‘arguments’ marshalled by the corporate sector against corporation tax are at best risible and at worst lies. While – see first piece above – the majority of citizens are suffering a huge reduction in their living standards, big business and banking are getting richer and richer: large multinationals now have more fluid cash than they’ve amassed at any one time since 1958.
You can’t tell the Friedmanite nutters this, and you don’t have to be left-wing to say it: just a talent for empiricism and the ability to read are all the objective observer requires.
If this is The Big Society, then at last I think I understand what Cammers is on about. It’s ‘The society where being big and important will give you an unfair advantage in everything from getting off phone-hacking charges to dealing with the animals at the Revenue’.