Republicans and Big Business Still not Connecting Wages and Buying Power

I recently blogged about the recent complaints from big business that they no longer have the ability to raise prices now, boo hoo, because the public has run out of money spend. I know, it’s sad. But if I sounded a bit doom and gloom, you might not want to read the following. In a blog entitled “It's the Economy, Stupid,” Robert Reich writes:

Higher productivity keeps inflation in check. When companies can produce more stuff with fewer workers, their unit costs drop. And they face even less pressure to raise wages -- even in the face of rising costs of living -- because average employees have virtually no bargaining power. This also helps boost corporate profits. But this also means less purchasing power by consumers whose paychecks are getting even smaller and jobs even less stable, and who have reached the end of their lines of credit because the housing bubble has burst. The result? Employers can't sell as much as before, so they reduce their payrolls by cutting hours and laying off more workers. Retailers are the canaries in this mine. Their sales are sharply down. (Today Nordstrom and other retailers posted big disappointments for August sales.) Unless or until America's broad middle class has more money in its pockets -- because we get a more progressive tax system, because unions become more powerful and push prevailing wages upward, because employers finally understand what Henry Ford understood a century ago (unless workers have enough money to buy the products they're making, the products won't sell) -- this downturn is likely to last a long time.

Since you’ve already figured out that a McCain/Palin administration is Bush economics on steroids, it might help to pass Reich’s easy to understand column on to your nearest Republican, if just for the fun of it. It’s not like you’ll change their mind. But if you're lucky, they’ll try to get you to leave by punching the air and chanting loudly, “U.S.A.!”