Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Profits Are Booming. Why Arenít Jobs?
New York Times ^ | January 8, 2011 | Michael Powell

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 ...


TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: bhoeconomy; business; depression2point0; economy; freetrade; freetraitors; getreadyhereitcomes; greatestdepression; greatestrecession; greatrecession; incorporation; michaelpowell; obamanomics; preparedness; preppers; profits; survival; survivalping; unemployment
Navigation: use the links below to view more comments.
first 1-2021-4041-6061-80 ... 461-468 next last
"But relatively few economists, even those who see signs of an improving economy, sound particularly buoyant, a concern shared by liberals and conservatives alike."
1 posted on 05/31/2011 7:05:25 PM PDT by khnyny
[ Post Reply | Private Reply | View Replies]

To: khnyny

Worth the read. There are other articles from various sources which have basically gone under the radar saying the same thing...interesting how it is not being highlighted in the media.


2 posted on 05/31/2011 7:07:26 PM PDT by khnyny
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

Thanks to Obamanomics as it pertains to business, companies have been forced to live with less...Less sales/product volume translates to needing fewer/less employees which requires less overhead (paying them) = more profit.

Of course there are side effects...


3 posted on 05/31/2011 7:10:39 PM PDT by Norm Lenhart
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny
I saw a guy who left California and is opening 300 restaurants in Texas.

He said , Bush taxes over in 2 years, no idea of health costs and no idea what unemployment cost or government regulations will cost a business under those conditions he would not put a penny in a new business because he uses a 5 year plan and under these conditions he can't.

4 posted on 05/31/2011 7:12:32 PM PDT by scooby321
[ Post Reply | Private Reply | To 2 | View Replies]

To: khnyny
"Profits Are Booming. Why Aren’t Jobs?"

Because of Obambi's policies. He simply can't pass a law requiring businesses to hire people.

5 posted on 05/31/2011 7:13:33 PM PDT by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

It’s because business has gotten lean and mean, now a lot of folks a performing multidisciplinary work just to stay employed.


6 posted on 05/31/2011 7:13:33 PM PDT by mylife
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

They laid off a lot of people and found out they can make a profit without them? So why hire them back?


7 posted on 05/31/2011 7:14:18 PM PDT by Venturer
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

Poor economic conditions may not seem a blessing in disguise but can you imagine the confiscatory and regulatory rampage by Obama during a time of plenty?

He’s an organ grinder with only one song to play entitled ‘Eat The Rich.’ It’s worked well for him as he’s Peter Principled his way up the political ladder but class warfare is the last thing anyone needs or wants to hear at this stage. It’s obvious the man doesn’t have a clue what to do or say next, such is the limit of his life experiences.


8 posted on 05/31/2011 7:15:33 PM PDT by relictele (Pax Quaeritur Bello)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

It’s from January


9 posted on 05/31/2011 7:15:58 PM PDT by gusopol3
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

Article was better than I anticipated. Here’s one answer, “More so than in the past, many American-based corporations earn a great portion of their profits overseas.”


10 posted on 05/31/2011 7:16:48 PM PDT by RightGeek (FUBO and the donkey you rode in on)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny
I would surmise that businesses (like mine) have taken a beating for over two years (since Q2 2008). We had the largest revenue year ever in 2010. Our profits were high as well for a variety of reasons. Does that make us likely to hire more? Not at all. We're still basically operating at 2007 levels despite the higher revenue (I know that doesn't quite make sense, but it does in my industry, design/engineering software). Revenue/profit numbers can be grossly misleading as to what is actually happening. Business levels do not demand more manpower.

We're staffed where we need to be and will not hire until business actually breaks loose and we see a sufficient level of confidence in the market where our customers start to let go of their money. That just isn't happening yet. Everyone wants to believe that it is, but I'll believe when I actually see sales levels that are truly where they ought to be.

11 posted on 05/31/2011 7:18:40 PM PDT by Paco
[ Post Reply | Private Reply | To 1 | View Replies]

To: scooby321

What’s the name of his restaurant chain?


12 posted on 05/31/2011 7:18:55 PM PDT by dragnet2 (Diversion and evasion are tools of deceit))
[ Post Reply | Private Reply | To 4 | View Replies]

To: khnyny

Big corporations have no interest in helping the USA economy. They were once USA corporations with defacto USA citizenship and now have become international with no specific interest or loyalty in the USA.

The sooner we Americans understand that there is no longer a “corporate America” the clearer we can see why they sell us out.


13 posted on 05/31/2011 7:21:21 PM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

Check the job growth in India and China for answers, Perfessor!


14 posted on 05/31/2011 7:21:52 PM PDT by Revolting cat! (Let us prey!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny

They’ll come up with every explanation but the real one: American workers are expensive and regulatory, tax and litigation uncertainty makes it worse.


15 posted on 05/31/2011 7:22:35 PM PDT by hc87
[ Post Reply | Private Reply | To 1 | View Replies]

To: RightGeek

Good answer. Unfortunately, that doesn’t help American workers.


16 posted on 05/31/2011 7:23:09 PM PDT by khnyny
[ Post Reply | Private Reply | To 10 | View Replies]

To: khnyny

In the past, obsolesence of consumer goods would lead to a spurt in consumer buying providing an uplift to the manufacturing sector and increased employment and an end to a recessionary cycle.We now live in a different world. That does not work anymore because the manufacturing sector is no longer the bulwark of our economy. That sector has disappeared overseas.


17 posted on 05/31/2011 7:23:15 PM PDT by chuckee ( gives too much credence to the UK's)
[ Post Reply | Private Reply | To 1 | View Replies]

To: apoliticalone

Bingo, we have a winner!


18 posted on 05/31/2011 7:25:21 PM PDT by khnyny
[ Post Reply | Private Reply | To 13 | View Replies]

To: khnyny

On purpose?


19 posted on 05/31/2011 7:25:28 PM PDT by 2ndDivisionVet (How do you starve an Obama supporter? Hide his food stamps under his work boots.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: khnyny
J. Bradford DeLong, an economics professor at the University of California, Berkeley, (AKA Major Incompetent Tool)...“It’s quite a puzzle when you have this disjunction between profits on the one hand and unemployment.”

There is not one darn thing puzzling about this.
A: This almost always happens at the start of an inflationary cycle.
B: When you don't know how the gubment is going to screw you next you hold onto your money and DO NOT incur more costs.

20 posted on 05/31/2011 7:28:24 PM PDT by Drill Thrawl (Are you prepared?)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-6061-80 ... 461-468 next last

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.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson