Tuesday, November 23, 2010

Under Bush, they called it a boom

The economic dynamic here isn't all that different from what was widely touted as the Bush Boom years. Poor and middle class were losing ground and the rich got richer:
American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.

Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.

This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad. Economic conditions in the United States may still be sluggish, but many emerging markets like India and China are expanding rapidly.
In other words, all that outsourcing pumped money into India and all the cheap labor imports from China that created these huge profits also created new markets for Big Business. Productivity grew because they fired workers and redistributed the workload among the remaining employees under threat of being cast onto the unemployment rolls. Scared employees don't complain. The only real difference is there is no real estate bubble that allows the slogan voters to use their homes as ATMs in order to feel rich anymore.

In practical terms, the annual corporate profit rate is larger than the 2010 fiscal year budget deficit which currently stands at $1.3 trillion. Yet the media hypes the corporate/GOP narrative that Obama is the anti-business president? Hell, if he was a Republican they would be shouting about the emerging new boom. And deficits wouldn't matter a bit.

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Anonymous Ruth said...

That anti-business mantra has been directed against action that was good for business by the Chamber of commerce types for aeons. You'd think that seeing the economy destroyed by their purportedly pro-business methods would teach them at last, but no....

9:42:00 AM  
Blogger Libby Spencer said...

I'm convinced it just comes down to tribalism and greed. If they're a Democrat, which is just one more "the other" to them, they must be destroyed. And hell, either way it's good for the point01%ers bottom line. They make money either way. But they do better when the government is dysfunctional. Something that's guaranteed with a GOP admin.

Besides, after the first ten million, it's not about money. It's about power and they have more of it under Republicans.

5:51:00 PM  

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