Recovery in U.S. Is Lifting Profits, but Not Adding Jobs ... A Growing Divide: As federal budget cuts begin, high productivity and low interest rates help corporations but not job seekers. ... "So far in this recovery, corporations have captured an unusually high share of the income gains," said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. "The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist." The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India. – New York Times
Dominant Social Theme: If we print enough money the jobs will come.
Free-Market Analysis: This was predictable. Keynesian monetary stimulation doesn't work. The US has a bifurcated economic system now, which is really the European royalist system.
This would seem to be the result of deliberate economic policies that have virtually split the US into a nation of have-more and have-less. Often much less.
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1 comment:
Corporations will never hire so long as the demand to produce isn't there. So giving money to corporations just mean that they have more money.
The only true way to jumpstart the economy is to create demand. Imagine how much better we would have been if we had given every tax filer $10,000. Cars would get bought or fixed. Credit card, student loan, and other debt bubbles would shrink dramatically. Underwater mortgages could get caught up, and new first time home buyers would have nice down payments which lead to a stabilized housing market.
As it was handled, we're on the hook for some corporation's bail out with absolutely no benefit to show from it. This way would have been cheaper and we would be paying back for what actually gave us a benefit.
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