Corporate Profits Up, Wages Down and Lots of Misleading Data All Around

 Business Insider Teaser?  (See Data Driven View Points below.)

Corporate Profits Just Hit An All-Time High,

Wages Just Hit An All-Time Low

Henry Blodget | Jun. 22, 2012, 8:55 AM |

  

In case you need more confirmation that the US economy is out of balance, here are three 

charts for you.

1) Corporate profit margins just hit an all-time high. Companies are making more per dollar of 

sales than they ever have before. (And some people are still saying that companies are suffering

from "too much regulation" and "too many taxes." Maybe little companies are, but big ones

certainly aren't). 

Business Insider, St. Louis Fed

 2) Fewer Americans are working than at any time in the past three decades. One reason

corporations are so profitable is that they don't employ as many Americans as they used to.

 

 Business Insider, St. Louis Fed

  

3) Wages as a percent of the economy are at an all-time low. This is both cause and effect. One reason companies are so profitable is that they're paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those "wages" are other companies' revenue.

 

 Business Insider, St. Louis Fed

In short, our current system and philosophy is creating a country of a few million overlords

and 300+ million serfs. That's not what has made America a great country. It's also not what most people think America is supposed to be about.

So we might want to rethink that.

Meanwhile, if you want to know more about what's wrong with the economy, flip through

these charts:

Okay, Folks, Let's Put Aside Politics And Look At The Facts...

Read more: http://www.businessinsider.com/corporate-profits-just-hit-an-all-time-high-wages-

just-hit-an-all-time-low-2012-6#ixzz1yfABcsPG

 _______________________________

DATA DRIVEN VIEW POINT: I did read more.  There are some good graphs as far as it goes, but as you follow the logic behind BI's presentation (see the rest of their graphs) you begin to see that BI treats government debt as strictly a spending problem. This spending side problem, they say, is caused by our lack of discipline. But other facts omitted from this analysis show that the biggest cause of government deficits is corporate tax breaks, tax abatements and tax cuts for the wealthiest. These tax gifts have been provided by politicians from both parties in exchange for political campaign donations and other perks. 

  

The second problem is that this analysis ignores the fact that the deficit had absolutely nothing to do with the current recession/depression. It was the unregulated financial activity and risk taking behaviors by banks and financial corporations, and just plain greed (talk about a lack of discipline) in the financial sector that brought down the economy. This whole topic is missing from this analysis.

  

Finally, none of the suggestions given here will work in the near term. Businesses are making big profits without having to hire. They also have huge surpluses of cash and can afford to wait out the coming election in hopes that their SuperPac donations will buy the candidate most likely to give them more deregulation and freedom to gamble with our economy. These folks aren't hurting and are in no hurry to relieve the suffering of the rest of us. So while their facts may be true, they aren't complete. Their analysis is faulty or perhaps intentionally misleading to support an economic framework that supports government austerity and the imperatives of the lending class.  Since business won't hire or spend their cash, government has to step up to the plate and fund hiring of police, fire fighters, teachers and construction workers to fix our decaying infrastructure.  Read Paul Krugman's new book, "End This Depression Now" for a full  understanding of what we need to do and why.