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 ...
Someone has to provide the incorporation papers and laws for the company.
You’d think that that would be a small reason to support the country and people affording them the privilege.
Or at least that was the way it was in the olden days(Before Bush Clinton Bush Obama “free trade”).
Profits are booming because American jobs aren’t.
Isn’t globalization great?
I think we should dis-incorporate them all then only let companies who support the United States reap the benefits of our republic (like in the olden days, before the globalist cancer metastasized in our Congress and White House).
Could it be that business is keeping more cash because 1) credit is still tight for many businesses and they need cash on hand 2)To fight off coming margin collapse due to rising raw material costs....
“They laid off a lot of people and found out they can make a profit without them? So why hire them back?”
They laid off a lot of people and replaced them with people in other countries; if they need more people they’ll hire more of them, not Americans or Europeans.
Yes.
The problem is that I am not making more money.
With inflation and such, I am losing ground.
But, I am employed and rounding the resume.
“They were once USA corporations with defacto USA citizenship and now have become international with no specific interest or loyalty in the USA.”
That’s right; they’ll be “American” again when they need the US military to protect their overseas investments with the blood of the Americans they wouldn’t hire.
Uh, because no one in their right mind is going to invest in U.S. economic growth while Marxists are in charge of the economy?
Yes, I do have ideas. First, review ALL our Fair Trade agreements with a view to amending or terminating those agreements that have led to a wide imbalance of trade. China is at the top of the list. Second, there is something to be said for the old bilateral trade agreements before the era of Free Trade where we had a better bargaining position with the other side of the agreement because of our economic mass.Third, reduce the corporate tax rate to 15%. Fourth,eliminate the regulatory stanglehold on business in the US. Fifth, stop blaming business for all our economic ills caused by unfriendly trade, fiscal, tax, regulatory policies and the current occupant of the White House
[Not to you, only, hedgetrimmer but this was the last post in the thread...]
I can’t remember when I’ve seen a greater collection of socialists on FR. So now the Producers of the world are the enemy? The looters of the world are the heroes? Where have I heard this before?
You can start shipping your funds to China, the mother of all unfair trade agreements. You will never have to worry about fluctuating currency risk there because they peg it to the dollar to give them the leg up.
Companies love to hire illegal aliens, as they think company benefits are 5 minute breaks, work like slaves, don't complain, since their getting 20 times more than they made in Mehico!
Profits regardless of consequences.
You missed the point. American workers are expensive because of:
a) high payroll (Medicare/FICA) taxes;
b) high health insurance costs;
c) high litigation costs;
d) minimum wages laws;
e) union contracts/Davis-Bacon Act compliance.
Additionally, a broken corporate tax system puts US based operations at a competitive disadvantage, compared to low corporate tax rate jurisdictions.
You missed the point. American workers are expensive because of:
a) high payroll (Medicare/FICA) taxes;
b) high health insurance costs;
c) high litigation costs;
d) minimum wages laws;
e) union contracts/Davis-Bacon Act compliance.
Additionally, a broken corporate tax system puts US based operations at a competitive disadvantage, compared to low corporate tax rate jurisdictions.
“You can start shipping your funds to China, the mother of all unfair trade agreements. You will never have to worry about fluctuating currency risk there because they peg it to the dollar to give them the leg up.”
No, no, I wanted the FAIR trading country. Which one was that?
“Americans are being played, just like workers in the rest of the world. We think we’re “special”, but we’re not. We are just a commodity to be used by the puppet masters. Sorry to sound so cynical, but even if it’s not “intentional” the results are the same.”
You’re absolutely right, and it was intentional. Our standard of living will decline, to level out when it reaches Asia’s rising standard of living; we will never again have what we had in the past; home ownership (even if it becomes an option for young people) doesn’t mean anything when the birthrate drops and the Third World comes here to replace the lost generations of Americans due to the economic squeeze on our former middle class. It is incredible how quickly (at least here in NJ) illegal aliens and legal immigrants have displaced Americans, and the difference in fertility rates between them; these changes have long-term consequences most people can’t imagine.
Do you know something I don’t? What war in the last 70 years did we enter to protect a US corporate interest overseas and which specific corporation. Are you one of those folks who think we went into Iraq for Exxon and Haliburton.
According to this article (I’ve read it a few times over the last year or so), the yuan was depegged from the dollar 2 years ago. Just a heads up.
11 May 20111
“The yuan has appreciated by about 5% since China de-pegged it from the US dollar two years ago.”
From:
“China-US make progress on trade but differences remain”
http://www.bbc.co.uk/news/business-13356739
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