Tucson Progressive

Pamela Powers Hannley, a progressive voice for Arizona

US corporations post ‘near-historic’ profits, as poverty and joblessness increase: Now what?

This week, the Huffington Post reported that corporate profits are at “near-historic” levels— up 38% compared to the same time period a year ago.

It’s a pretty disgusting article about how layoffs, outsourcing, and low interest rates have allowed corporatists to rake in the cash– and hoard it– rather than reinvest it, which would improve the nation’s ecomomy.

“Since 2008, corporate profits increased 10 percent — but revenue was down 6 percent, the WSJ [Wall Street Journal] 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.'”

This is a perfect example of how dysfunctional trickle down economic theory is.

Juxtapose this story about historic corporate profits with the stories about the widening wealth gap between rich and poor, rising poverty in most states, disappearing middle class, people living in vehicles, and states and cities going broke.

Given this scenario, how can Congressional Republicans continue to support tax cuts for the wealthiest Americans and balk any time they are asked to extend unemployment?

How can Tea Party/Republicans like Sharon Angle (Nevada), Joe Miller (Alaska), and Jesse Kelly (Arizona) call for privatization of Social Security, elimination of the health care safety net, and elimimation of the national minimum wage? Angle, Miller, and Kelly are puppets of the corporatists. I can’t believe that they honestly think dissolution of these programs would help the majority of Americans.

Privatization of Social Security would just give Wall Street’s corporate gamblers more money to play with and another way to boost their historic profits even higher. Elimination of the health care safety net and the minimum wage and continued outsourcing of jobs would through the US into third-world status. It would be end of life as we know it. The former US middle class would become economic refugees.

UPDATE, October 6: Blog for Arizona’s AZ Blue Meanie posted Update III: The New Corporate Business Model: Increase Profits, Not Jobs.

UPDATE, October 8: Diane Rehm’s Friday News Roundup covers this story. (Diane, honey, mention my blog next time, OK?)

One comment on “US corporations post ‘near-historic’ profits, as poverty and joblessness increase: Now what?

  1. Jim Hannley
    October 4, 2010

    >Great questions, Pam. The answer is that those who promote these discredited assertions are either stupid or liars. The hoarding of cash does nothing but cause economic stagnation. We are faced with a class of people of unimaginable wealth who will fight tooth and nail to preserve a tax rate of 35% rather than submit to a return to the 2000 rate of 39%. We must demand the Federal Government tax them at meaningful rates, redistribute, yes REDISTRIBUTE this hoarded, idle capital for the sake of economic stimulation.


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This entry was posted on October 4, 2010 by in 2010 elections, corporatists, economy, Jesse Kelly, jobs, taxes, Trickle Down Economics.

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The Tucson Progressive: Pamela Powers Hannley

I stand on the side of Love. I believe in kindness to all creatures on Earth and the inherent self-worth of all individuals--not just people who agree with me or look like me.

Widespread economic and social injustice prompted me to become a candidate for the Arizona House, representing Legislative District 9 in the 2016 election. My platform focuses on economic reforms to grow Arizona's economy, establish a state-based public bank, fix our infrastructure, fully fund public education, growlocal small businesses and community banks, and put people back to work at good-paying jobs. I also stand for equal rights, choice, and paycheck fairness for women. I am running as a progressive and running clean.

My day job is managing editor for the American Journal of Medicine, an academic medicine journal with a worldwide circulation. In addition, my husband and I co-direct Arizonans for a New Economy, Arizona's public banking initiative. I am a member of the national board of the Public Banking Institute, and I am co-chair of the Arizona Democratic Progressive Caucus, the largest caucus of the Arizona Democratic Party.

I am a published author, photographer, videographer, clay artist, mother, nana, and wife. I have a bachelor's degree in journalism from Ohio State University and a masters in public health from the University of Arizona. I grew up in Amherst, Ohio, but I have lived in Tucson, Arizona since 1981. I am a proud member of the Unitarian Universalist Church of Tucson and the Public Relations Society of America.

My Tucson Progressive blog and Facebook page feature large doses of liberal ideas, local, state, and national politics, and random bits of humor. I also blog at Blog for Arizona and the Huffington Post.

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