Wednesday, November 24, 2010

Profits don't create jobs

The quarter completed at the end of September was the best quarter ever for American corporations.

American businesses earned profits at an annual rate of $1.659 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 noninflation-adjusted terms.
Record profits are partly due to productivity gains and barely perceptible employment growth. In fact, the lack of new hiring is one reason for the profits. Employees are doing more with less, and the benefits are flowing upward to executives and the wealthy.

As I argued in "Investment doesn't create jobs", the reason there's hardly any hiring is that there's not enough demand for goods and services that would require and reward hiring.

If there were demand, then profits could be invested and thus help unemployment. Until there is demand, not so much.

Only the government is in a position to close the demand gap. But Republicans will not permit it. Their prescription: Suffer while your betters enjoy the fruits of your labor - if you're lucky enough to still have a job.


Anonymous said...

Just more class warfare from the left. The big, mean evil executives and their corporations are keeping me down...Waaa Waaa Waaa. When will you Marxist democrats get off this? It's a fact that corporations employ people. Working people support the federal government. Your obscene notion that corporations are the problem stems from you following the teachings of Lenin, Marx and Trotsky.

lovable liberal said...

Oh, bullshit. If the wealthy had 99% and I objected, you'd call me a class warrior. The truth is that the rich have been making war on everyone else for three decades, and that's why we're in the economic fix we're in.

And once again, you offer zero rebuttal, just puerile name-calling.

There are two possibilities. Either you're one of the elite oligarchs, or you're a fool.

You idiot conservatives still haven't learned the lesson of FDR: Liberals are the sole hope to retain the benefits of capitalism, and the mechanism we offer is protection of human beings from the fiduciary amoral venality of corporate capitalists themselves.

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