http://finance.yahoo.com/news/Corporate-Profits-Were-the-nytimes-3994329548.html?x=0&.v=1 Corporate Profits Were the Highest on Record Last Quarter CATHERINE RAMPELL, On Tuesday November 23, 2010, 3:22 pm The nationâs workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms. Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. This breakneck pace can be partly attributed to strong productivity growth â which means companies have been able to make more with less â as well as the fact that some of the profits of American companies come from abroad. Economic conditions in the United States may still be sluggish, but many emerging markets like India and China are expanding rapidly. Tuesdayâs Commerce Department report also showed that the nationâs output grew at a slightly faster pace than originally estimated last quarter. Its growth rate, of 2.5 percent a year in inflation-adjusted terms, is higher than the initial estimate of 2 percent. The economy grew at 1.7 percent annual rate in the second quarter. Still, most economists say the current growth rate is far too slow to recover the considerable ground lost during the recession. âThe economy is not growing fast enough to reduce significantly the unemployment rate or to prevent a slide into deflation,â Paul Dales, a United States economist for Capital Economics, wrote in a note to clients. âThis is unlikely to change in 2011 or 2012.â The increase in output in the third quarter was driven primarily by stronger consumer spending. Wages and salaries also rose in the third quarter, which might help bolster holiday spending in the final months of 2010. Private inventory investment, nonresidential fixed investment, exports and federal government also contributed to higher output. These sources of growth were partially offset by a rise in imports, which are subtracted from the total output numbers the government calculates, and a decline in housing and other residential fixed investments.
The argument is that business is hoarding all that cash because they're unsure of what their tax status will be, which of course is total bullshit. They're holding all that cash, not hiring or expanding business as extortion over the working class. By the time people get back to work they will have gotten their minds right. They will work for any wage, under any conditions, ask no questions, smile and sing the company song. That's the ticket!
But if their corporate profits were the highest on record, what is the purpose of altering that momentum by doing the opposite of what got you the record profits?
Exactly my point, which is why you won't see them hiring anytime soon regardless of what happens with taxes. When demand for products and/or services actually increase to a point they have no choice but to add personnel they will do so, and not one minute before. Those added will come from the ranks of those whom have gotten their minds right and they'll be very good worker bee's. They'll be paid less while charges for products and services rendered will go up, and the financial rape of the working class will stay in tact.
Even though I'm a purebred commie, and this appears to be a criticism of capital and defense of labor, which should be right up my alley, I disagree with it. Capital is not, on such a broad scale, so well coordinated. (Sure, it knows what to do to block a unionization effort, or put down local resistance at "its" oil fields, but those are case-by-case responses.) No, I still maintain that the chief problems here are 1) US consumers are broke, 2) when US consumers do buy, they're buying "Chinese", and 3) productivity gains are not "trickling down". Hence, the stratification of our society continues apace.
Yes Comrade, but why are consumers broke and buying Chinese? They're broke because income from those productivity gains are not being shared proportionately. They buy Chinese because that's where the manufacturing base went to make the products. Who did that? Corporate America with the government greasing the wheels. It's a very well coordinated attack on the working class. Marx was right about this, except he was mistaken in one critical area. The "capitalist" is not the problem. It is the radical right corporatist. Two very different animals. No plunder in history, said Marx, could compare with the enormity of the offense of the capitalist who, without working himself, appropriated the products of the worker, leaving the worker with only the minimum amount paid as "slave-wages" to keep him alive and to enable him to produce.