With declining unemployment numbers, rising corporate profits and a growing GDP, many analysts say we’ve reached a turning point in the recovery. The Dow Jones is up 86% from its March 2009 low, private sector jobs are multiplying and export levels are approaching an all-time high. With statistics like these, you could almost believe the Republican argument that trimming billions from the federal budget won’t hurt a recovery.
Unfortunately the Republican plan ignores the fact that things are still grim for the vast majority of Americans and none of the underlying causes of the recession have been dealt with. Large corporations and banks continue to dodge taxes through loopholes and offshoring, starving the government of the tax dollars it needs to deal with its deficit. The foreclosure mess is keeping a low profile, although reminders like this weekend’s New York Times profile of Mortgage Electronic Registration System, a mysterious corporation claiming to own title to half the nation’s mortgages, provide an occasional reminder. There’s also skepticism behind those job numbers. The effective unemployment rate is still high, and new job growth is primarily occurring in unskilled positions that pay close to minimum wage.
Events like today’s Make Wall St. Pay protests in Washington D.C. provide a reminder that recovery continues to elude the average American. According to National People’s Action, the group that organized the event, protestors shut down a Bank of America branch and then occupied Rep. John Boehner’s office to protest corporate tax dodging, while a group of homeowners and activists picketed a meeting of state Attorneys General to demand a tough settlement against bank servicing abuses that have made renegotiating loans heartbreakingly difficult for struggling homeowners. Bank of America, perhaps the worst bank offender, has 204 tax shelters in the Cayman Islands and another 167 elsewhere. Rather than contributing to the public purse, it actually received a tax refund of $666 million from taxpayers in 2010 and a $3.5 billion refund in 2009. If it and the other big banks were to start paying all their taxes, NPA says they would generate $13 billion per year – a sizeable chunk of the budget cuts being proposed by Congress (and this, all from just 6 Wall Street banks). Meanwhile recovery most definitely eludes the more than five million homeowners currently facing foreclosure.
Protests like these underscore the opinion polls that consistently show that a majority Americans want the rich to pay more taxes and don’t want spending cuts to government programs. The economy may be rebounding for some, but those who have been excluded from the recovery are going to be most hurt by future cuts.