Everyone knows that the unemployment rate is too high. yet businesses are enjoying record profits. Why aren't they hiring? As the Motley Fool tells us,
•Sales are too low.
•Since sales are low, businesses are keeping profits up by keeping expenses (like employment) down. That's why profit margins are near record highs.
After describing a friend whose moving business slashed employment, wages, and benefits, Berkshire Hathaway (NYSE: BRK-B ) Vice Chairman Charlie Munger was asked if his friend would ever revert to the old way of business. He replied: "No, it's never going back. He squeezed the cost out. That's one of the main troubles of the economy, that everybody has done what my friend in the moving business has done. It's perfectly logical."But if people don't have jobs, they can't buy--and sales stay low. I've argued before that monetary profit shouldn't be the only type. Employment is a profit too. Putting money and stock value above everything else breaks a social contract.
"That's the way capitalism works," he said.
And in this recent piece in the New Yorker describing several books on the subject, Nicholas Lehmann writes,
Before the late nineteen-seventies, corporations were not managed for “shareholder value” to the extent that they are today, and many of them offered de-facto lifetime employment and generous health benefits and pensions. The more regulated and localized American economy had all sorts of inefficiencies and trade barriers that created safe harbors for institutions like banks, department stores, insurance companies, fixed-commission stock brokerages, and middlemen in supply chains. Unions were more powerful. In the “new economy,” each line of business tends to have one dominant, global, mainly non-union player, such as Apple, Facebook, or Google. Judt isn’t naïve enough to believe that people will simply come to their senses and reinstate social democracy as it was during its prime, but he does insist, like Rothkopf, that we will have to find ways to shift power from the market and back toward the state….But now that capitalism is a religion, that's unlikely.
Recently, the NY Times blog discussed partisanship. And there is a huge divide in moral values (my emphasis)
By two to one, 53-26, Democrats believe that capitalism and Christianity are not compatible. Republicans, in contrast, believe there is no conflict, by a 46-37 margin. Tea Party supporters are even more adamant, believing that capitalism and Christian values are compatible by a 56-35 margin.Is profit over people (which is what Capitalism has become) a Christian value? Discuss.