Corporations are not paying their workers enough, while calls for policies that favor big businesses and stoke corporate earnings could make the economy resemble 1929 America just before the crash into the Great Depression, writes economist and former Labor Secretary Robert Reich.
"The latest data on corporate profits and wages show we haven’t learned the essential lesson of the two big economic crashes of the last seventy-five years: When the economy becomes too lopsided – disproportionately benefitting corporate owners and top executives rather than average workers – it tips over," Reich writes in a column in the Christian Science Monitor.
"Yet incredibly, some politicians think the best way to restart the nation’s job engine is to make corporations even more profitable and the rich even richer – reducing corporate taxes; cutting back on regulations protecting public health, worker safety, the environment, and small investors; and slashing taxes on the very rich."
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Corporations don't need any more money and the wealthiest Americans don't need more tax breaks, writes Reich, now a professor of public policy at the University of California at Berkeley.
(Associated Press photo)
"We’re in a vicious cycle," wrote Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton.
"The only way out of it is to put more money into the pockets of average Americans. That means extending the payroll tax cut. And extending unemployment benefits."
A payroll tax cut is set to expire in 2012, although renewing it seems to be finding support among both Democrats and Republicans.
"In all likelihood we will agree to continue the current payroll tax relief for another year," Senate Republican leader Mitch McConnell said after a closed-door meeting of his colleagues, Reuters reports.
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