Profits Are Booming. Why Aren’t Jobs?

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.

I’m for trade and tax policy that encourages producers to manufacture more in the USA...

Right there is where we disagree. I'm for free people deciding for themselves where and what they should produce, and you want free people's business activity directed by 'tax encouragement' from the federal government.

It's the conflict between state control of the economy vs. people control. Something that's particularly sick about state controllers is that they don't want to manufacture anything themselves, they want to make others do it for them. Freedom advocates like myself aren't afraid to get up and make things. Right now I have a chip making plant in silicon valley and a clothing retail chain in the US, Japan, and China. Just a few years ago I was involved in much more but this is all I got left going on now with state control being so popular these days, and I'm probably going to have to shut down these last two ventures too.

My adversaries here are just upset that the government-controlled trade is not to their liking for various reasons: some significant and others mere raving. They believe that what we have is free trade and that the right response to it is withdrawal behind borders.

It is government regulation which is primarily driving American industry abroad and which reduces capital accumulation and wages. People seem also totally unaware that the growth in the wage fund is ENTIRELY dependent upon the level and rate of capital accumulation.

Control of the revenue from foreign trade by tariffs has always been a huge bone of contention in our politics and the more it is removed by moving towards free trade the better. As the highest level of free trade is approached so is the Division of Labor perfected and productivity maximal.

Since you have refused to provide a definition for what you believe “free trade” is I will give you the meaning. Your irrelevant asides are no longer that funny. So I will keep it veery simple.

Free trade is the condition of exchange wherein the traders decide for themselves it is worth their making. There is no government involvement pro or con with the trade. There is no government subsidy of or tax upon these transactions. It is not the result of capitalized letter organizations even if the FT within them says “free trade”.

We do not have true “free trade” and we never have. This is an economic concept/ideal which runs headlong into politics which require it to be modified most of the time negatively for the nation as a whole.

One modification of the rule that free trade is best is defense industries since in war comparative advantage could lead your enemy to be the supplier of some military necessity. That one I accept.

Ones based upon the social or political system of the potential traders or the degree of environmental regulation or union membership I reject.

Smith also believed that maximizing foreign trade could maximize national wealth. He was opposed to most of the rules established under mercantilism which restricted international trade because they also reduced the national wealth. The sentiment within the quote was never meant to imply that preference of domestic industry should lead to government control or prohibition of foreign trade. His whole book was based upon the idea of removing these controls.

It is a subjective idea in any case and nebulous as to its real impact. Where does such “preference” stop? I’ll pay 10% for X, or 20% or 200%? And for the very poor, in 1776 England there were lots, there really can be no such preference at all even 2% could be too much. So I am not really sure of the point of that quote.

They believe that what we have is free trade and that the right response to it is withdrawal behind borders.

Possibly, but I've never been able to see them even do that much thinking. The most I ever got from them was some mindless 'I'm-good-you're-bad' song and dance, and how they proved their patriotism by saying they favored "America First".

Funny that, kind of a long standing tradition with protectionists. Back in the '30's the America Firsters were so anti-FDR that they became pro-Nazi. During movie theater newsreels they'd cheer during clips of Poland being bombed

<--Before getting into kid's books Dr. Seuss did political cartoons for the newspapers and he captured the widespread revulsion. Today's protectionists are not only wrong and midless, they're also in very bad company...

post 297 by algernonpj

Smith said: “As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”

This is good, we all agree that tariffs are bad and cross-border trade is good because like Smith suggested we want to leave questions of industry support and security to the individual, not the government. Elsewhere in "The Wealth of Nations" (pp. 264-265 in my copy) Smith said:

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. . . If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage."

Free trade is the condition of exchange wherein the traders decide for themselves it is worth their making.

So why was the WTO created? ( to circumvent constitutional oversight of trade by the US Congress).

'free trade' without interference by a national government means that the US shouldn't provide any legal protections for global corporations, under our Constitution, because you free traitors don't want anyone telling you anything.

But there you go, using the USTR office to set your own agenda, and 'open' markets for you using US tax dollars so you don't spend a penny of your corporate money.

We have clear evidence 'free traders' seek out slave labor. It's the cheapest you can get and the profits are maximal, in your very own words. Governments can outlaw slavery, like the American 13th amendment, that's why free traitors dislike government. And for the citizens to be self governing and come up with laws against slavery in their own country?! It's just appalling to a free traitor.

Free traitors find citizens and citizenship appalling too. If you're not a consumer, you are a worker, and those are the only two acceptable places for normal human beings in the free traitor world. You said it, free traitors find NO problem whatsoever 'trading' with communist slave labor manufacturers. And that is why most Americans despise you free traitors.

Even after my help you still persist in misunderstanding. Slavery is not conducive to free trade. Slavery neither takes the division of labor far enough to make free trade optimal but it also is not as efficient as free labor so it limits productivity too much.

Free trade leads to the ruination of slavery. It involves international trade not domestic institutions like slavery. Free trade involves only once aspect of economic life and is not anti-government per se.

International organizations are set up to attempt to further the attainment of free trade. Your beef is with them not free trade itself. It never needs assistance but those instances where government is interfering that is why these organizations are set up. Without government involvement and suppression in the first place there would be no need for the organizations. You confuse the reaction with the cause.

‘free trade’ follows slave labor, it ALWAYS has and ALWAYS will.

If you’ve been following the news in the laat 30 years since ‘free trade’ took over our nation’s government slavery has reinstated itself in the US and has risen to astonishing numbers. Due to ‘free trade’ agenda with the biggest human trafficking nation in the western hemisphere, the Dominican Republic we have slaves in the United States once again. This is all established history and fact, no matter how YOU try to skirt the issue.

A major problem with ‘free trade’ is the free traitor transnational trash globalist corporations want the citizen to be dead. The don’t want the citizen to have any control or influence over them with national laws and national morals. You say citizens regulating trade is statist, but the Constitution is written specifically for citizens to do this. I can only conclude that you, like Obama, despise the US Constitution and have no allegiance to it.

Your ‘free trade’ agenda is opposed to nations— your free traitor buddies in the UN have already declared the death of the nation state as they formed all the international organizations you free traitors require to usurp citizen authority in all matters of trade and international relations.

International organizations are creating the global communist system you free traitors crave, and it is happening at breakneck speed these days.

You say you want no government involvement— but supra governmental international organizations that push communism are just fine?

My beef is the anti american, pro slavery, pro communism internationalist destruction of this great country by ‘free trade’ and free traitors. There is no putting lipstick on the ‘free trade’ pig, it is demonstrated ruinous to the American people and our Constitutional rights.

As countries become closer to a free trade environment slavery is reduced then eventually eliminated. Slavery is a pre-feudal economic system two evolutionary stages below the capitalist phase of economic development.

Dominicans make up a large share of the illegals in New York City. They must have come up on the Underground Railway.

Nations do not have “morals” only people can have morals. Nations have interests and free trade serves and has always served our national interests.

Our constitution allows certain constraints on foreign trade such as tariffs and forbids other constraints such as export taxes. It was not designed to be used for protectionist schemes. It is the requirements of sovereignty itself that has produced most of the law wrt foreign trade. If your knowledge of the constitution is at the level of your knowledge of economics don’t bother I have laughed enough as it is.

Now which is it the fascist privately held corporations beyond the control of governments or the communist government controlled corporations beholden to the Super Government? I have to know so I know how ofter to check under my bed.

And to think I so carefully and simply defined what “free trade” is yet you are as whacky as ever.

As countries become closer to a free trade environment slavery is reduced then eventually eliminated.

Lie. 'free trade' has restored slavery to America.

Dominicans make up a large share of the illegals in New York City. They must have come up on the Underground Railway.

Texas is a hub for human sex trafficking, said Kathleen Murray, the Fort Worth Police Department's trafficking coordinator. She estimated that 20 percent of all human trafficking in the United States comes through Texas at some point.

Continue to verify the conclusion that you are an idiot and know nothing. How do you think just repeatedly throwing crap up against the wall will win an argument? Now the Dominicans are coming through TEXAS? Hilarious stuff but it shows you are as geographically challenged as you are economically and politically. Is there any subject of which you have ANY real knowledge?

What kind of moron believes that SMUGGLING is free trade? Or that free trade has ANYTHING to do with sex slaves or kidnapping? MOre hilarity from our ole buddy hedgie.

Free traitors deny deny deny, just like Bill Clinton!

You have posted absolutely nothing to support anything you say about ‘free trade’ its your opinion and nothing else.

If you look at the US department of labor website, you’ll see how human trafficking has increased in the US.

You can thank the open borders that ‘free trade’ areas create.

Smuggling, drugs and slavery are all part and parcel of the ‘free trade’ agenda. It was in 1862, it is now.

You can search this site and see 10 years of articles about how phony and bad for the republic ‘free trade’ is.

But you won’t. You’ve got your talking points and name calling. Boring and stupid.

Now free trade is responsible for drugs? ROFLMAO. Free trade does not mean criminal activity.

You are a hoot but thanks for discrediting those opposed to free trade a clearer demonstration of crackpotism could not be created.

Of course, only the most idiotic of idiots believe free trade has anything to do with illegal activity, illegal immigration or slavery.

There is no doubt any reputable economist (as opposed to the dregs from the Looney Bin you believe speak the truth) can tell us that free trade raises income in both trading nations.

Ten years of crackpot theories and crank articles even if on FR tells us nothing about economic theory or economic results. It does verify that you are as gullible as they come though. And are anti-free enterprise as well.

When America was building the ships for the invasion and the supply of England the builders were not stopped by anti-pollution laws, unions were neutered during the war, and businessmen were not considered the most evil of the evil. Now the EPA practically lives in the steel mills that are left, the unions are willing to sacrifice the entire nation to protect their wages and businessmen are subjected to constant and unrelenting propaganda war against them, their economic roles and their characters.

There is no wonder why so much of our industry has been driven out of the country only why there is anything left at all. None of this is the result of free trade.

Free Trade, Slavery and Secession were from that time forward sworn allies; and the ruin wrought to our industries by the disasters of 1840, plainly traceable to that Compromise Tariff measure of 1833, was only to be supplemented by much greater ruin and disasters caused by the Free Trade Tariff of 1846—and to be followed by the armed Rebellion of the Free Trade and Pro-Slavery States of the South in 1861, in a mad attempt to destroy the Union.

John A. Logan

“free trade” and slavery, hand in glove since 1833.

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