I do not have a problem with corporate profit. Shareholders have a right to make money. The corporation’s responsibility is to the shareholder. That said, our government of the people by the people constitutional responsibility is to promote the well being of the citizens. The corporation and government has two different priorities.
We were mostly a free enterprise country of many that used capitalism to grow. We are now a capitalist country that use free enterprise to maximize capital for a few. There is a distinct difference that only a sufficiently strong and effective government of and by the people can mitigate.
With corporations bloated with cash and with corporations outsourcing jobs for increased shareholder profits, it is imperative that government act. If our corporations will not put their profits and fortune to work in America, then The Government Corporation of America must create employment given infrastructure, education, and energy transition needs. The country is in need of labor to fix much and if the corporate sector does not perform government by the people must.
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Corporate Profits ‘Near-Historic’ In Second Quarter, Thanks To Cost-Cutting
The Huffington Post | William Alden First Posted: 10- 4-10 09:07 AM | Updated: 10- 4-10 09:16 AM
Corporate America finished the second quarter with "near-historic" profits, largely by cutting costs, laying off employees and streamlining operations, the Wall Street Journal reports.
Profits for companies in the S&P 500 soared 38 percent from the same period last year, hitting $189 billion, the WSJ says, the sixth-highest quarterly total ever. S&P analysts expect the trend to have continued in the third quarter.
Since 2008, corporate profits increased 10 percent — but revenue was down 6 percent, the WSJ says. To achieve the impressive quarterly results, companies have had, as the WSJ puts it, to "streamline" their operations. This means firing workers, outsourcing labor and shuttering unprofitable (or less profitable) divisions.
The robust state of corporate profits presents a paradox: companies won’t spend their money until the economy improves, but the economy won’t improve until they spend their money. An increase in hiring, for example, would help drive a recovery. The New York Times reports this "chicken-and-egg" phenomenon, noting that near-zero interest rates have encouraged companies to borrow money and simply hoard it because, as the NYT puts it, "they can." Combined, companies have $1.6 trillion in cash, the paper notes. In the first quarter of this year, their cash reserves represented the highest percentage of assets since 1964.
"They are still holding on to more cash in the same way that Noah built the ark," Gluskin Sheff chief economist David Rosenberg told the NYT.
As HuffPost’s Shahien Nasiripour reported in August, bank profits during the second quarter rose 21 percent to almost $22 billion, the highest level in three years.
All these corporate profits came as the country as a whole got poorer. The net worth of households and non-profits dropped 2.8 percent during the second quarter to $53.5 trillion, erasing two quarters of gains. The figure hadn’t been that low since the third quarter of 2009.
Corporate Profits ‘Near-Historic’ In Second Quarter, Thanks To Cost-Cutting
