Harold Meyerson, American Prospect, today:

JULY 19, 2018

Meyerson on TAP

Even Trump’s Man at the Fed Says Workers Are Being Screwed. Anyone who still remains bewildered by the rebirth of American socialism should consider this: Jerome Powell, the Trump-appointed chairman of the Federal Reserve, says he’s concerned that the share of the national income going to labor has fallen “precipitously.”

In testimony Tuesday before the Senate Banking Committee, Powell bemoaned the fact that “labor’s share of profits has been sideways.” This, he said, was “very troubling.”

That’s Jerome Powell who said this. Donald Trump’s appointee as the nation’s top banker.

The unhappy development Powell was referencing was the fact that the share of the national economy going to workers’ wages and benefits has fallen since the turn of the millennium from 66 percent to 62 percent, while the share going to corporate profits has risen correspondingly, from 8.3 percent to 13.2 percent. (And, adding insult to injury, more than 90 percent of those profits have been doled out in the form of increased dividends and share buybacks to shareholders and top corporate executives.) Had the workers’ share stayed at 66 percent of the economy, according to estimates by Jared Bernstein, Vice-President Biden’s former chief economist and a contributing columnist to the Prospect, their average annual income would have risen by $3,400.

Cautiously, Powell intimated this wasn’t good. “We want an economy that works for everyone,” he concluded.

That, however, is as far as the Fed chairman was willing to go. He didn’t adduce causes for the decline of the labor share, other than “global factors.” He didn’t cite the role that the business community’s and the Republican Party’s war on unions had played, or the Republicans’ opposition to raising the federal minimum wage, or the shareholders-uber-alles ethos that has governed corporations since Milton Friedman first propounded it and Ronald Reagan’s SEC supercharged it by legalizing share buybacks. He did admit he wasn’t sure how to reverse the decline—in fairness, a cluelessness that follows logically from his refusal to recognize the causes of that decline.

Still, even Trump’s man at the Fed is distressed that the labor share has dwindled. Is it any wonder that, among more sentient Americans, socialism is on the rise? ~ HAROLD MEYERSON