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Friday, March 25, 2011

Corporate Profits hit an all time high: Recovery stumbles

Corporations reported an annualized record profit of $1.68 trillion based on fourth quarter returns. Job growth is sluggish and the real estate market is moribund. 7.5 million lost jobs since the start of the recession still haven't come back yet the Republicans want to give even more to corporations and take it all pout on the middle and lower income earners.

When is enough, enough. Never, according to Republicans. Corporations shouldn't have to pay any taxes and be free of all regulations because, you know, they create jobs, except they don't.

Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, laying off workers and wringing more productivity -- defined as the amount of output that comes from an hour of work -- from remaining staff, even as the recession eased.

At the same time corporations are sitting on a record $1.6 trillion in cash that they aren't investing, Giving them more tax breaks, as every GOP dominated state is intent on doing won't bring back jobs, it will just allow these corporations to garner even more profits and sit on even more cash. Meanwhile, all the austerity measure at all levels of government will bring more pain to the middle and lower earning classes and in the end these glorious corporate profits will start to slide severely as demand for their products gets throttled by a tapped out population.

The big 'job creation' lie lives and becomes embedded in policy because too few Democrats stand up to the lie.

In a related article, the New York Times lays out how GE, with all its resources and lobbying efforts has gamed the tax system to a point where they no longer pay taxes no matter how much they earn.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

While G.E.’s declining tax rates have bolstered profits and helped the company continue paying dividends to shareholders during the economic downturn, some tax experts question what taxpayers are getting in return. Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment. In that time, G.E.’s accumulated offshore profits have risen to $92 billion from $15 billion.

It's a lengthy article but well worth reading. It illustrates everything that is wrong our current economic situation. Capitalism works best when the maximum number of people feel that they have a stake in its success. For huge swathes of the population it feels as though they are sinking or at best treading water. Current Republican fiscal policy only wants to increase the pain of those falling by the wayside while showering even more benefits on the wealthy few. It isn't sustainable in any way shape or form.

If there is any hope it's that GOP overreach and the real pain it inflicts, such as we're seeing in states like Wisconsin and Michigan and elsewhere will, as it has in Wisconsin arouse enough people to wake up and stop believing the lies and bullshit about the economy. After all, the Koch brothers and all their billions have as many votes as the average couple, struggling to survive.

1 comment:

sarkari said...

Thank you for sharing .... thank very much....

by
sarkari naukri