CORPORATE AMERICA: TURNING PINK INTO GOLD
Tue, 05 Oct 2010 14:30:38
The Wall Street Journal says that Corporate America finished the second quarter of 2010 with "near-historic" profits. Now, there's a piece of economic legerdemain.
How do you make beaucoup bucks in the midst of The Great Depression Lite? Profits from the S&P 500 are up 38% from last year -- the sixth-highest quarterly total ever. It would be a good thing, if those behemoths had raked in all that scratch by selling a whole lot of widgets or servicing a ton of clients. No way. Since 2008, corporate revenues have shrunk 6 % while all those profits were being generated.
They did it by magic. Not black magic, but pink magic. Corporate America is making out like the moral bandit it is by firing people right and left and outsourcing every job it can possibly deport.
The nation is awash in pink.
The 77,000 job hires in September couldn't compensate for the final exit of the census takers (another ten years before that Stimulus returns) and the regular growth of the labor force; so, the unemployment upticks to 9.7.
Simultaneously, the Fed has hammered the prime rate down to 99 Cent Store proportions; so, the same companies handing out the pinks are borrowing oodles of green for next to nothing.
This country's mega businesses are hoarding $1.6 trillion of cash, while small businesses and households can't borrow a dime. Not a recipe for prosperity in any economic cookbook I've read.
It all comes down to the flow of capital, the lifeblood of our national economy. If Corporate America continues to squat on its cash instead of investing it in we the people; and if the Federal Government continues to squander our treasure abroad instead of investing it in we the people, then that lifeblood will not flow and our economy will go into shock.
We're all about turning the Federal Government upside down. Why not the corporations? They're only a legal fiction. The corporate veil can be pierced with the stroke of a pen. Make the Board of Directors and the major shareholders personally responsible for the careers they terminate and the jobs they smuggle abroad.
That just might put us back in the pink.