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Weekend readings: Simone Campbell, David Brooks, Queen Elizabeth

Some items worth catching up on, before (or over) the weekend.

Sister Simone Campbell testified before the House Budget Committee this week, at a hearing that opened with Paul Ryan declaring that in America, “If you work hard and play by the rules, you can get ahead.” When Campbell's turn to speak came, she talked about the effectiveness of federal assistance programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) in improving the lives of America’s most vulnerable (watch the video below), noting that charity goes only so far. “Everyone has a right to eat, and therefore there is a governmental responsibility to ensure everyone’s capacity to eat.

Love and care makes a difference, but the issues are so big there aren’t sufficient charitable dollars there.”

Her full testimony is here [.pdf], and it makes interesting reading alongside yesterday’s column from David Brooks, in which he embarks on the yeoman effort of restoring the neoconservative brand:

Neocons came in for a lot of criticism during the Iraq war, but neoconservatism was primarily a domestic policy movement. Conservatism was at its peak when the neocons were dominant and nearly every problem with the Republican Party today could be cured by a neocon revival.

Irivng Kristol and others argued that the G.O.P. floundered because it never accepted the welfare state. “The idea of a welfare state is in itself perfectly consistent with conservative political philosophy,” he argued. In a capitalist society, people need government aid. “They need such assistance; they demand it; they will get it. The only interesting political question is: How will they get it… .”

In recent years, people like Kristol … and Ronald Reagan have been celebrated even though many of their ideas could no longer get a hearing in many conservative precincts. The Republican Party is drifting back to a place where it appears hostile to the basic pillars of the welfare state: to food stamps, for example. This will make the party what it was before the neocon infusion, a 43 percent party in national elections, rejected by minorities and the economically insecure.

Though Charles P. Pierce was out of the office this week, there was still plenty to find at the Esquire Politics Blog, where Michael Maiello looked at Friday’s job report in the light of record-high corporate margins:

The post-Crisis refrain continues — U.S. companies are reporting record profits and fantastic margins while creating few jobs and paying some workers so little that they punch in poor and punch out poor and also tired.

In the employment and wages discussion, corporate profits and margins rightly get the majority of attention. The argument at its most basic is that if American companies are raking it in, their workers should benefit. If workers are struggling, we have to wonder whether or not those profit margins are coming at the expense of labor. …

While we might talk about employees working harder for as little money as possible, the polite terms on Wall Street are “cost controls and efficiency gains.” The margins represent what’s happening in business right now. Margins have been high ever since the recovery because companies shed so many employees during the Great Recession and were able to mobilize much smaller cost centers (oops, I mean labor forces) into the recovery.

And then he addresses the real question: Where is all this money going?

Foreign Policy has a fascinating look at “doomsday speeches never given,” leading with excerpts, including the following, from Queen Elizabeth’s undelivered address announcing nuclear war in March 1983, part of a war-games exercise held in the aftermath of Ronald Reagan’s “evil empire” speech:

We all know that the dangers facing us today are greater by far than at any time in our long history. The enemy is not the soldier with his rifle nor even the airman prowling the skies above our cities and towns but the deadly power of abused technology.

Also featured: JFK’s 1962 announcement of war with the Soviets, Nixon’s eulogy for astronauts Neil Armstrong and Buzz Aldrin, and Harry Truman’s pointed warning to “the Russkies.”

Finally, don’t forget Commonweal’s interview with novelist Valerie Sayers, who talks about The Powers (her latest novel), in addition to baseball, Dorothy Day, “the ferocity of belief,” and growing up Catholic in South Carolina.

 

About the Author

Dominic Preziosi is Commonweal’s digital editor.

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It could appear thar Congressman Ryan was more interested in checking his stopwatch than listening  intently to Sister Simone Campbell, but maybe he engaged in dialogue with her after her seven and a half minute presentation.

The whole hearing is here:

http://thomas.loc.gov/video/house-committee/hsbu/36644971

Sr. Simone responds to one particularly dense Republican at 1:29:50

Regarding the Esquire piece: let me preface these comments by noting that I work for a corporation, and like pretty much every worker I've ever met, I have a self-interest in employers spending more than they do on employees' wages.  Really, I'm all for it.

The Esquire piece is pretty much URL-free, so I did a very little bit of reading on my own to try to understand how it can be that profits are higher when wages are flat.  Here are a couple of thoughts:

  • Corporate profits are setting records in the sense that they are a higher percentage of GDP (Gross Domestic Product) than previously.  Part of the explanation almost certainly is that GDP has been growing, to use an overused word, anemically.  When one is given a fraction to work with, there are two ways to make the fraction bigger: make the numerator bigger, or make the denominator smaller (or both).  A variation on that phenomenon is at play here: the numerator (corporate profits) is growing relatively quickly, while the denominator (GDP) is growing relatively slowly.  To put a point on this observation: if any of our policymakers in charge (and we know who they are) could figure out a way to kick-start GDP such that it reassumes its historical growth rates, corporate profit as a percentage of GDP might slide back into the range of its historical norms, without shrinking in an absolute sense.

    One contributor to lagging GDP growth is that government spending is no longer growing at its historical rates.  Both federal spending (cf the sequester) and state and local spending (cf states and towns so far underwater that they would get the bends trying to find the surface) is flat or shrinking.
     

  • The Esquire author's set of data consists of the S&P 500. Let's set aside the question of whether the S&P 500 members are representative of American employers (although in fact the S&P 500 members are not selected to be representative in this sense.).  The members of the S&P 500 are large corporations.  Surely the majority of them are multi-national: they sell in several or many different markets (nations) around the world.  Hence, there is a bit of an apples-and-oranges comparison at work here: we are comparing worldwide profitability to domestic production, employment and wage trends.  This observation can be relevant in a couple of different ways: it means that export and international sales account for some portion of the record profits; and it almost certainly means that whatever overseas employment these companies provide is not considered in the comparison.  In other words, for these companies, domestic employment may be lagging but offshore/overeas employment may be booming.  (This is, in fact, how jobs end up being shipped overseas).  The hard fact  of today's sistuation is that, absent large-scale human migraiton, labor is still largely local, but capital is no longer bound by the length of  a daily commute or a nation's borders.
     
  • Regarding the cash these companies are hoarding: my supposition is that if the senior management of these large corporations had more confidence in the US economy, they would stick their necks out a little more and invest in more activities that generate new jobs.  Cf the point I made in the first bullet above.  If anyone argues that managers and directors should be less pusillanimous - go for it.

None of the above is to make a particularly political point.  Just seeking to help explain how this situation can be what it is.

 

 

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