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(The New York Times)   Don't worry citizens, everything is in order. Corporate profits are at an all-time high   (nytimes.com) divider line 19
    More: Cool, account of profits, Ford Motor Company, incomes policy, employee benefits, advanced economies, Model T, American middle class  
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1951 clicks; posted to Business » on 03 Sep 2012 at 10:42 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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Archived thread
2012-09-03 09:47:23 PM
2 votes:
ct.politicomments.com
2012-09-03 12:38:42 PM
2 votes:
Americans will eventually do the right thing, but they will try everything else first.
2012-09-03 11:08:29 AM
2 votes:

Nemo's Brother: Under Obama, it has been a great time to be rich. Poor or Middle class, not so much.


Yeah cause incomes didn't start stagnating until Obama showed up.
2012-09-03 10:52:06 AM
2 votes:
Doesn't do the middle/lower class any good if the money doesn't circulate back into the economy via purchasing goods and services.
2012-09-04 09:07:57 AM
1 votes:

DoBeDoBeDo: PROFITS are up but REVENUES are not. All that happens to keep profit up when revenue is down or stagnent is to cut costs. But that's a game with a dead end. You can only cut costs for so long until you have no workforce or assets.

The problem is investors that are not in for the long haul, they expect ever higher profits without taking into account that sometimes you have to reinvest your profits to keep the company innovating.

It's why we have companies that post record profits in q1 and chapter 11 in q4. Completely insane. Companies like Cat are cut to the bone, they have nothing left to cut and no new buyers. They have huge profit now, but they are still on the verge of destruction.


There's always room to cut. Baskin Robbins no longer actually MAKES ice cream. They are simply a brand and a franchise that can be slapped on any old ice cream that any factory in any third-world piss hole can make. IBM is gradually moving out of making anything as well. After they've divested themselves of all their chip and hardware stuff, they'll kill off their services stuff by subcontracting it all to companies and IBM will also simply be a brand to tack onto whatever low-cost provider(s) they can sign on in whatever labor market provides the phonebanks cheapest. It's happening everywhere.

And getting a science job doesn't help. Have you looked at hiring and demand in pharma, biotech and chem? It's all subcontracts, temporary, and short-term grunt work. Lean, "sigma 6" and flexible is the way to go now. Why bother hiring and laying off when you can shrink and grow your staffing with a quick renegotiation of contract with a temp staffing provider. A tiny hand-full of manager oversee disposable inventories of drones who follow developed SOP's and run highly automated equipment. Most research is done by post-docs paid at the poverty level and consultants who work 6-month contracts and are sent packing with non-disclosure agreements that mean they can't redeploy any of the skills they just acquired. Unless you are willing to relocate to Asia, where all those jobs are going, and accept the local pay, you'll live like a mercenary. Forget buying a house. You'll need to pull up tent-stakes and follow the jobs across the country and world every quarter or 6-months. And good luck finding a spouse who can find work in the same city. I know too many scientist types who make cross-country conjugal visits with their S.O. on odd weekends because no single job market can employ both of them simultaneously.
2012-09-04 12:50:20 AM
1 votes:

WhyteRaven74: If I was the governor of the state Caterpillar is incorporated in I'd give the CEO a call and say "That's a nice corporate charter you've got there, be a shame if anything happened to it".


That state would be Illinois. Cat HQ is in Peoria, and both of my grandfathers worked for Cat back in the day. But that is a tale for another time.

IL recently raised its tax rates. The CEOs did get phone calls, but from OTHER Governors. Like Chris Christie. IL has Cat, Motorola, Sears, McDondalds, Allstate, State Farm, Boeing, John Deere and United Airlines. Amongst others, but those are the Big Ones. Most of them have been here a long time. I know Cat and Motorola cut deals with Springfield, I'd be shocked if the others didn't as well.

Sickening, yeah. but that is business. At a time when our governor should be soliciting business to move here, he is bribing them to stay. These firms dont owe IL anything, they are free to move. IL was built by some of these companies. In the case of Cat and Deere, feel free to take that literally. With out the tax revenues and jobs provided by these companies, IL would not look like it does today.

I do love these articles and how they pick and choose the variables they look at. Hint: Henry Ford wasnt up against Honda, Toyota, Nissan, Hyundai and Kia. A Benz of that vintage was in no way a 'middle class' car, as the poser C-class had not yet entered the market. The difference between us and Germany? They protect their domestic market. Oh, and they have an education system that doesnt insist on sending everyone to college. They still have vocational training. Japan is the same way.

Ford started raising wages to combat turn-over. Given his multitude of other evil ways, anything that passes for altruistic from him was probably an untended consequence. Plus, the guy was trying to create a market. So even after he and GM bought up and killed street car companies to boost demand, folks still needed to be able to pay for the damn things. I can't think of a single industry today that operates like that. but the US auto industry did these things to create what is still today the largest per-capita car market. The fact that Ol' Henry was slick enough into talking other business owners into supporting his evil plans just proves how very savvy he was. But back then, as today, the auto industry had its fingers in other areas. Cars have a lot of varied parts. They need glass, seats, seat covers, rubber tires and a lot of metal. Oh, and they need fuel and massive amounts of power to run a factory. SO I bet it was actually pretty easy for him to talk the other 1%ers into going along with his plan. Because its a brilliant plan.

Anyway, Im willing to bet that if we started treating imported goods the way our exports are treated, most of this would sort its self out pretty quick. China wont let folks in unless the govt owns most of the firm, and they get access to the tech. Japan loves tariffs. You can buy a GTR here cheaper than you can buy a Corvette there, and you can forget about a GM factory in japan unless its run by Izuzu, Suzuki or Kawasaki.

It's called competition, and we shot ourselves in the foot right before the race. The US is too nice for its own good. Nobody else on the planet has looser borders for trade and people. And then we wonder why we have issues. It's not the corporations, either. Well, not just. Im sure they never expected manufacturing to grow so fast over seas, or that we consumers would embrace it so readily. We have a thirst for cheap crap. Great joke in Back to the Future, when Doc is looking at the busticated Delorean "No wonder this chip failed, its made in Japan!" Marty's classic response: "All the best stuff is made in Japan now". And we've seen the same thing with South Korea and China. if you'd told me 6 years ago Kia would be selling cars worth being seen in, I'd have been very skeptical.

We have not adapted to the fact that while other countries have adopted our industries, they would not adopt our business habits. They look further ahead, and are far more cut-throat. And we let them. Thanks to GM and china's trade laws, the ChiComs are learning to build cars. And look at the brands they have over there: Buick and Caddy. The semi-luxury and Luxury brands. They arent learning off chevys, folks. So when the first ChiCom cars come of the boat, they will be nicely equipped and built well. And just as they did to our solar industries, these cars will be sold on our shores at a loss. Toyota and Honda did that mess too. Sell the product at a loss, write it down, AND bring the profits home at a cut-rate tax. Offset any loss buy tariffing the crap out of any chevy to land in yokohama.

Look at the time line. This is what happened to our economy, or at least where it all started.
2012-09-03 11:11:29 PM
1 votes:
PROFITS are up but REVENUES are not. All that happens to keep profit up when revenue is down or stagnent is to cut costs. But that's a game with a dead end. You can only cut costs for so long until you have no workforce or assets.

The problem is investors that are not in for the long haul, they expect ever higher profits without taking into account that sometimes you have to reinvest your profits to keep the company innovating.

It's why we have companies that post record profits in q1 and chapter 11 in q4. Completely insane. Companies like Cat are cut to the bone, they have nothing left to cut and no new buyers. They have huge profit now, but they are still on the verge of destruction.
2012-09-03 04:21:14 PM
1 votes:

DrPainMD: WhyteRaven74: RickN99: But since we approved his stimulus package, it drove unemployment way down,

Yes the unemployment rate is the president's fault, how about blaming the people who created the mess, you know, the private sector? They could fix it in a matter of months.


[images4.wikia.nocookie.net image 320x242]
"Ha ha... they're still blaming the private sector!!!
P.T. Barnum was right."


Yup, all the stuff we've since seen from inside places like Goldman in the form of memos about how they were intentionally setting clients up with investments they theyselves were betting to fail doesn't exist. They had no idea that they were creating a pyramid of lies with the intention of taking as much as possible before the pyramid collapsed. In no way were they knowingly offering mortgages on McMansions to people who shouldn't have qualified to put a purchase on layaway at Walmart and firing anyone who suggested otherwise. No, the banks are pure and innocent as fresh snowfall.

If only we had some previous examples of how unregulated banking is unstable and ends up creating a massive depression every so often? Hang on, 2008 and 1929 and 1873 are calling... They're all saying there's a reason that commercial and investment banks should be separate.
2012-09-03 04:05:14 PM
1 votes:
Keep shopping at these big box stores for everything, where 78% of every dollar you spend there leaves the area.
2012-09-03 03:01:02 PM
1 votes:
Someone should install a guillotine in the middle of night in Wall Street. And when they say something that just irks of greed, lift the the blade ever so slightly (also in the middle of the night).
2012-09-03 02:46:37 PM
1 votes:

johnnyrocket: Corporations aren't a jobs program or an economy booster. They're around to raise maximum cash, for their own good. People are on their own.


If only there was some group, perhaps elected by all the people in a given geographic area, that could act on their behalf to protect their rights and property. They could enact controls and rules on these corporations to ensure that their self-interest does not harm the societies in which they operate.

Unfortunately, I know of no suck group. :(
2012-09-03 02:43:51 PM
1 votes:

jjorsett: Some people have a very interesting worldview. Corporations are evil and must be reined in as long as they're successful and making money. When a company starts losing money then suddenly it's the endangered source of jobs and must be subsidized, coddled, and bailed out. In short, some people love losers.


Or, the larger your corporation becomes, the more of a responsibility it has, and the more of a debt it owes, to the infrastructure that made it that way. Then again, that infrastructure doesn't really exist, does it? You just made all that wealth out of thin air by waving a magic wand. You Built It, after all.
2012-09-03 01:46:37 PM
1 votes:
Corporations aren't a jobs program or an economy booster. They're around to raise maximum cash, for their own good. People are on their own.
2012-09-03 01:15:34 PM
1 votes:

jjorsett: Corporations are evil and must be reined in as long as they're successful and making money. When a company starts losing money then suddenly it's the endangered source of jobs and must be subsidized, coddled, and bailed out. In short, some people love losers.


Way to totally miss the point.
2012-09-03 11:55:21 AM
1 votes:

Nemo's Brother: Under Obama, it has been a great time to be rich. Poor or Middle class, not so much.


Well, as a backer of the GOP agenda it's good to know that you'll be voting for Obama.
2012-09-03 11:26:00 AM
1 votes:
What's that? Corporate profits are up, but there's no trickle-down effect?
2012-09-03 11:22:45 AM
1 votes:
i.qkme.me

What's to worry about --- lots of people are doing great!
2012-09-03 11:07:09 AM
1 votes:
Under Obama, it has been a great time to be rich. Poor or Middle class, not so much.
2012-09-03 10:22:19 AM
1 votes:
Of course, they are job creatin' with all that liquid capital, aren't they? Probably need to lower corp tax rates, right?

Failed economic religion is failed.
 
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