Conley
07-06-2011, 10:21 AM
"While the U.S. economy staggers through one of its slowest recoveries since the Great Depression, American companies are poised to report strong earnings for the second quarter -- exposing a dichotomy between corporate performance and the overall health of the economy."
That's from the Wall Street Journal, can't find a free copy of the full article.
http://online.wsj.com/article/SB10001424052702304760604576426153929429820.html?m od=WSJ_hp_LEFTTopStories
"Democrats come in for their share of the blame, too. The worst economic recovery for American workers in history has happened on Obama's watch, and he appears remarkably oblivious to it. He may live to regret this oversight."
"Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. The extraordinarily high share of national income (88%) received by corporate profits was by far the highest in the past five recoveries from national recessions ... In the first six quarters of recovery from the 1990-91 recession, corporate profits experienced no growth whatsoever, and they generated on average only 30 per cent of national income growth during the recoveries from the 1981-82 and 1973-75 recessions."
http://www.salon.com/technology/how_the_world_works/2011/07/06/the_final_nail_in_the_supply_side_coffin/index.html
To echo the points from the articles, it is interesting that companies are willing to just sit on huge piles of cash reserves. There is no interest rate to speak of, so you would think if ever a company would reinvest that money into expansion and new hiring it would be now. Obviously if interest rates were high then they would be more inclined to keep cash and grow it. The whole driving force behind slashing the tax rates, going in to debt, etc was that it would lead to more corporate spending and stimulate the overall economy at large. So, if not now, then never it seems.
That's from the Wall Street Journal, can't find a free copy of the full article.
http://online.wsj.com/article/SB10001424052702304760604576426153929429820.html?m od=WSJ_hp_LEFTTopStories
"Democrats come in for their share of the blame, too. The worst economic recovery for American workers in history has happened on Obama's watch, and he appears remarkably oblivious to it. He may live to regret this oversight."
"Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. The extraordinarily high share of national income (88%) received by corporate profits was by far the highest in the past five recoveries from national recessions ... In the first six quarters of recovery from the 1990-91 recession, corporate profits experienced no growth whatsoever, and they generated on average only 30 per cent of national income growth during the recoveries from the 1981-82 and 1973-75 recessions."
http://www.salon.com/technology/how_the_world_works/2011/07/06/the_final_nail_in_the_supply_side_coffin/index.html
To echo the points from the articles, it is interesting that companies are willing to just sit on huge piles of cash reserves. There is no interest rate to speak of, so you would think if ever a company would reinvest that money into expansion and new hiring it would be now. Obviously if interest rates were high then they would be more inclined to keep cash and grow it. The whole driving force behind slashing the tax rates, going in to debt, etc was that it would lead to more corporate spending and stimulate the overall economy at large. So, if not now, then never it seems.