But the problem is we have structured our economy in this sort of death spirally way, where huge profitable organizations like Wal-Mart pay poverty wages to a million workers, and then taxpayers make up the difference in social services programs like food stamps and Medicaid and rent assistance, and so on and so forth. It’s as morally repugnant as it is economically inefficient. It’s a fact that Wal-Mart earned $27 billion in profit last year. They could afford to pay their bottom million workers $10,000 more a year, raise all of those people out of poverty, save tax payers billions of dollars, and still earn $17 billion in profit, right. It’s simply nuts that we have allowed this to happen. And the only way you can change things is to raise the minimum wage. Certainly the people that run Wal-Mart will not do this on their own. The idea that businesses will go out of business if they pay workers more is just not true, even though I understand the sort of visceral fear that some of them feel about this change. SOURCE: Why capitalism has nothing to do with supply and demand | Making Sen$e | PBS NewsHour.
These quotes above drive home what I believe is a very basic reason our economy is still in the state that it is. We just give too much power to the most avid capitalists among us. In other words we give too much power to those few who control most of our nation’s wealth. I am a firm believer in the idea that government’s role in a democratic/capitalist society is to reign in the greed that naturally comes with capitalism.
Unions used to have some control over this wage vs established wealth issue but that is just no longer the case. As is typical of these sort of thing unions themselves became too powerful and as a result too self-focused and corrupt to continue to hold the influence they once had. Unfortunately there was nothing there to replace the void left by the extinction of unions so it is necessary for our government to step in. But even that is another tragic failure in this very disjointed country.
With the almost total breakdown of the ability to govern, especially at the national level, this dichotomy between wages and wealth has gone unabated for a couple of decades now. Our economy is almost totally based on consumer spending but if consumers are stripped of any sense of discretionary income it seems like that is a natural spiral that we will not escape from. The richest among us just don’t eat out 10,000 times a month to replace those who can no longer afford such luxury.
We depend on our government to reign in the excess of our capitalist system and that is just not happening in today’s world.