Posted on 05/31/2011 7:05:20 PM PDT by khnyny
To gaze upon the world of American corporations is to see a sunny place of terrific profits and princely bonuses. American businesses reported that third-quarter profits in 2010 rose at an annual rate of $1.659 trillion, the steepest annual surge since officials began tracking such matters 60 years ago. It was the seventh consecutive quarter in which corporate profits climbed.
Staring at such balance sheets, you might almost forget that much of the nation lives under slate-gray fiscal skies, a place of 9.4 percent unemployment and record levels of foreclosures and indebtedness.
And therein lies the enduring mystery of this Great Recession and Not So Great Recovery: Why have corporate profits (and that market thermometer, the Dow) spiked even as 15 million Americans remain mired in unemployment, a number without precedent since the Great Depression? Employment tends to lag a touch behind profit growth, but history offers few parallels to what is happening today.
“Usually the business cycle is a rising-and-falling, all-boats-together phenomenon,” noted J. Bradford DeLong, an economics professor at the University of California, Berkeley, and a deputy assistant secretary for economic policy in the Clinton Treasury Department. “It’s quite a puzzle when you have this disjunction between profits on the one hand and unemployment.”
A search for answers leads in several directions. The bulls’ explanation, heard with more frequency these days, has the virtue of being straightforward: corporate profits are the economy’s pressure cooker, building and building toward an explosive burst that will lead to much hiring next year.
The December jobs numbers suggest that that moment has yet to arrive, as the nation added just 103,000 jobs, or less than the number needed to keep pace with population growth. The leisure industry and hospitals accounted for 83,000 jobs; large corporations added a tiny fraction.
(Excerpt) Read more at nytimes.com ...
My tagline is the answer to the question.
That is why in some cases the old way of doing things thru bilateral trade agreements has a place in our trade policy. Case in point India. India is a perfect example of what you are referring to. They are moving from a third world country to a quasi developed nation of due process with a democratic tradition. India, not Europe, is the economic future. 1.2 billion people, a huge potential market, particularly as they become more affluent. They have something to offer as well as do we with 25% of the world’s wealth. Bilateral trade agreements are pegged to assure a true balance of trade between the 2 nations going forward with provisions written in to activate punitive tariffs in certain sectors to assure that the trade maintains a overall balance in the future. It is mutually beneficial because they have access to 25% of the worlds wealth for their markets while we have access to a large chunk of the world’s population that will be getting increasingly richer for out markets
Sure, but now they have a Constitutional right to influence American elections.
Many of the unemployed are in manufacturing and construction; no demand for new construction, no capital going to manufacturing...in the US.
why did you post something from Jan 2011 ?
its dated.
Sorry, but our embargo of Cuba occurred when Castro declared his government as Communist aligned himself with the Soviet Union and harbored Soviet missiles 90 miles offshore in Cuba.Also an embargo is not a war. I have no problem with the US placing an embargo on nation that nationalizes the assets of US businesses as a means of convincing nation’s that their is a price to pay for kleptocracy.So I would not have a problem with embargoing Cuba if your fictitious reason was a reality.
I agree India has huge potential, but there are political, ethnic, religious, and cultural issues that provide a lot of roadblocks. Also, while their middle class is growing quickly, their lower class is as well. An Indian co-worker described it best when he said you can’t think of India as a country; it is more like a continent.
Just as Hispanics immigrants reduced the standard of living for blue-collar workers in the US, Indians have had the same impact on white-collar workers. It is hard to convince the average American that our relationship with India offers any benefit to the American workers.
Awww, thanks for the clarification. I had been reading for some time that it had been depegged, while I have also read that they are only allowing it to rise so much against the dollar, in a sense repegging along the way then?
Is there any reason Red China hasn’t been afforded the same embargo? They killed tems of thousands of US troops in Korea, and helped kill tens of thousands more in Vietnam.
Is there something wrong with this picture?
Also, can you tell me why we invaded Iraq?
1.Red China did not nationalize any of our industries.
2.Red China is not 90 miles offshore
3.Actually, we did not have ANY trade relationship with Red China before 1972 for the reasons you mentioned.
4. I can tell why we did NOT go to war with Iraq. It was not over oil because historically we imported no oil from Iraq and secondly none of the major oil services contracts in Iraq were awarded to US oil or oil services companies after we won the war.So, I think you may be looking at the wrong boogeyman when it comes to Iraq.
What happened to US businesses’ assets on the mainland when private companies were nationalized in 1949?
Gee, it is really such a puzzler as to why companies are not hiring when a new hire brings with it a HUGE health care bill. It will take a real economic genius to figure this out.
Then we have idiot states like Illinois raising taxes on businesses which will surely lead to more employment.
The fraying Social Compact the Times fears for can be translated as “the Democrat social engineering plans”. In other words we can’t afford the Democrat Party’s promises anymore.
Class warfare has been a staple of American political life since the election of Thomas Jefferson. It has worked for two centuries almost every time it is tried.
Your response indicates a need for better understanding of what tariffs do and how they increase the power of government over economic life. Revenues from a tariff would not come close to funding a modern military much less the whole government.
The federal government was never “meant” to be funded by a tariff. It was only one of several options provided for in the constitution. Any other tax was hopelessly inefficient and almost impossible to collect. Tariffs in today’s world are used only by third world and underdeveloped nations.
Free trade is the policy which maximizes human freedom, minimizes governmental meddling and the schemes of politicians. It also maximizes economic efficiency and production.
You might be interested to know that during the period for which the tariff provided a majority of funds for the government our trade balance was negative and we were funded by British capital. Hardly “taking care of ourselves” as you would term it.
Crank economic theory is what the Left spouts and has no place among intelligent people.
That kind of thinking is the result of decades of anti-business propaganda from the media and education system that businesses should serve their communities and/or nations. It is a kind of fascist economics.
Businesses are here to serve the market within the context of freedom which is US ALL which is driven and controlled our OUR demands by OUR choices.
Now it is true that there are market failures wherein the assumptions underlying economic theory are violated or not met. Here is where government can play a positive force. But it is dangerous to call upon. Particularly since the Democrat Party is so good at playing the Class Warfare game and the electorate so gullible and ignorant.
What an ignorant cop out. A) No standing military was intended for the U.S. B) Federal Government should be shrunk in size to a miniscule operation C) An apportioned opt out tax (Tarriff) is the only constitutiional tax (The 16th ammendment was never ruled to have the authority to tax individuals, which is why it is touted as “voluntary”). D) Trade with foreign countries AT ALL is optional. E) Free trade is neither “Free” nor maximizes freedom.
Until you grow up and learn to do anything but dictate from your high horse, just a few the holes in your cop out have been adressed. Do me a favor, and don’t get back to me. I already understand you have little understanding of freedom, nor economics, merely a shady view of how to maximize exploitation for the profitability of a few. No thanks. That’s not what patriotism, Constitutional Government, nor strong Sovereignty is about.
You forgot to mention more regulations.
For someone who has been a Freeper for a decade, you sure are sounding like a troll now. Obama's policies are causing the current economic crises, and they differ greatly from Bush's policies. Here are some differences:
Trillion dollar deficits as far as the eye can see. These are TEN TIMES the deficits of Bush's.
Killing oil drilling in Texas, the Gulf, Alaska, and offshore. The Bushes encouraged domestic production.
Wasteful stimuli, the pouring of trillions of our money down a rat hole.
Anti business government policies - EPA regulations, Justice department threats, tax increase threats, immigration policy, and the threat of amnesty, boatloads of new paperwork, DOT regulations, "Green" regulations every where you turn.
etc.
etc.
You can't have a very realistic understanding of business when you make such an absurd statement such as this.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.