Profits often rebound after a prolonged recession. It is a sign of fiscal tightening by businesses, public and private, using the tools of fiscal economy to insure a return-on-investment for the owners. Inventory is worked through and then ordered "just-in-time" for what business volume remains, extra employees and new employees are cut or not considered to keep labor and administrative cost low. Capital equipment is not purchases and outside capital for expansion is not paid for because no expansion is yet needed.
We know that should there be no retained earnings, growth cannot occur as business volume increases, and that is the common sense reason that profits, the property of the owner/investor, need to be earned and once earned, kept.
Much of this is all with the Marxist subversion that profits are ready for stealing by government which is entitled to anything it wants.
If the market is unfettered, that is what makes volume and hence employment. A fettered market, unable to plan and unable to move dramatically for the chasing of profits is adverse to risk because the risk versus return ratio is so high.
If I am selling apples and I make more profit, I put it in my pocket and bury more in the back yard -- I also work harder to bring more apples to my stand. I don't go hire my brother-in-law saying to myself, "I have enough money, dumb George needs an income."
You don’t use expertise of others to make a bigger apple crop? Or produce containers so your apples can be shipped and therefore increase your sales? How about someone to stand at your apple stand while you go home and pick them so you have less down time for your sales?
Your comments make no sense.
Great explanation and I agree...but I think what’s occurring now is multi-causal and partly fueled by the incredibly once in a lifetime awful real estate market. Banks have tightened their belts and are not lending money to the same degree and rightfully so. Too many Government regs and market fear are both to blame for the belt tightening which has swung too far on the pendulum in the opposite direction. The banks have huge drags on their balance sheets from under water properties - both residential and commercial. Money lending is tight and consumers and small businesses cannot get loans, etc.
The only people reaping a profit nowadays are the connected.
http://washingtonexaminer.com/politics/2011/06/commerce-private-hand-public-glove