Follow the Yellow Brick Road

In the Wizard of Oz, Dorothy was instructed to put on the red shoes and follow the yellow brick road. Perhaps that is what is needed to explain today’s economics. Some of the changes that have led to today’s economic disasters are: ·CEO to average employee compensation. In 1965 the ration of CEO compensation to that of the average employee was 24 to 1. Today that ratio is 243 to 1. Conservatives’ will argue that the “pie is bigger” and while the CEO is just taking a bigger slice. Unfortunately, the reality is that while it it true that the pie is bigger, that pie is not 219 times bigger. The CEO is taking all of the bigger CEO slice and is also taking a few of the average employees’ slices as well. Fewer jobs for the average employee allow the CEO to take more slices of the pie. That is where many of the jobs went. ·Between 1918 and 2008, The average income for everyone was $39,099. However, looking at the statistics a little closer would show that the richest 10% enjoyed 51% of income growth over that time while the bottom 90% only shared 49% of income growth. ·Between 2007 and 2008, the average wage earners experienced a 9.9% decline in income. Regardless of whether it is called income disparity or class warfare the reality is that today 47% of families are at or below poverty. That number is continuing to grow. What that means in economic terms is that fewer and fewer people have the financial ability to do anything other than pay for basic necessities. The American economy has never been necessity driven. Demanding and purchasing everything beyond basic necessities is the engine that drives our economy. As we have seen, when purchases of non-necessities declines, the economy declines, employment declines, tax revenues decline, and all’s not very well with the world we call the US of A. There is a very simple solution. People need money to drive the economy. People need jobs to earn money. If the private sector is not creating jobs it falls upon the public sector to pick up the slack. They say government cannot create jobs. I say bullshit! Those saying government cannot create jobs are usually receiving a paycheck from the government. In one respect, however, they are correct. Bad government cannot create jobs and incompetent government cannot create jobs. So, when they are a part of the government that cannot create jobs, what does that say about them?