There was a recent story that hit the business page that bears repeating here. The story covered a report from the U.S. Commerce Department that says American corporations had their best quarter ever in this year’s recently concluded third, earning $1.6 trillion in profits. That’s the highest figure ever recorded in the 60 years the government has tracked this particular stat.
The same report also pegged the third quarter economic growth rate at a fairly respectable 2.5 percent. In the second quarter of this year, that growth rate was 1.7 percent.
Both of these developments suggest a couple of knee jerk responses in the form of questions. (1) With figures like these, why the heck is the Obama adminisitration still widely considered to be “anti-business?” (2) With record profits now officially on the books, when will corporations begin hiring again?
Knee-jerk answer to question one. Because Obama and Congress dared to push through that financial reform package earlier this year. That’s gotta be it. The white-collar world seems to be a bit huffy about that piece of legislation. What, you guys were surprised that we would dare to lay some new rules on you? You thought we wouldn’t insist of some kind of regulatory response after you almost blew up the whole damned supermarket in ’08? Face the facts, pirates in pinstripes. You and your bizarre batch of incomprehensible superscams scared the poop out of us two years ago. And there’s a whole bunch of us out here in the evaporating middle class who are still feelin’ the pain. A lot of us who were counting on retiring at 63 aren’t particularly tickled at the prospect of now having to work until 73. So just be happy, bankers and brokers, that you’re dealing only with the pitty pat package that was passed, instead of something loaded up with rusty nails and glass shards.
Knee-jerk answer to question 2 is provided by an economist quoted in the New York Times, who said “the economy is not growing fast enough to reduce significantly the unemployment rate or to prevent a slide into deflation.” I don’t know enough about modern voodoo economics to pick a bone with that statement, but I’ll guess that it’s probably not very encouraging to those who’ve been out of work for a while to hear that a growth rate of 2.5 percent or an enormous dogpile of profits just aren’t enough to rev up the hiring engine. This financial gloomist goes on to say that “this situation is unlikely to change in 2011 and 2012.” Well, super. The only solace to be found in this pronouncement is that most of the time, these kinds of economic prognosications are just flat out wrong.
Which leads to knee-jerk question number three. How many times will the new lean mean Congress extend unemployment benefits?