Corporate Profits At All-Time High As Recovery Stumbles

[Faygo Kid]

Source: Huffington Post

NEW YORK -- Despite high unemployment and a largely languishing real estate market, U.S. businesses are more profitable than ever, according to federal figures released on Friday.

U.S. corporate profits hit an all-time high at the end of 2010, with financial firms showing some of the biggest gains, data from the federal Bureau of Economic Analysis show. Corporations reported an annualized $1.68 trillion in profit in the fourth quarter. The previous record, without being adjusted for inflation, was $1.65 trillion in the third quarter of 2006.

Many of the nation's preeminent companies have posted massive increases in profits this year. General Electric posted worldwide profits of $14.2 billion, while profits at JPMorgan Chase were up 47 percent to $4.8 billion.

Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, laying off workers and wringing more productivity -- defined as the amount of output that comes from an hour of work -- from remaining staff, even as the recession eased. . .

Read more: http://www.huffingtonpost.com/2011/03/25/corporate-profits-2011-all-time-high_n_840538.html

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Congratulations, everyone! I know we all feel the same about this - All of us as rich as Murdoch, Immelt and the Kochs.

[wilt the stilt]

1. oh rich people

thank you for our jobs. i thought tax cuts to rich people ere going to create e jobs

[Rex]

2. Well of course they did, we gave them 2 trillion dollars of taxpayer

money. Well, Obama and GWB did. I had no say in the matter.

[Snoutport]

3. that one went on my facebook...

thanks for sharing

[wordpix]

21. +1 Good idea, doing the same

[Teaser]

4. misleading headline

where was the "economy stumbles" part of the article?

It was, at worse, cautiously optimistic on the direction of the economy.

Is HuffPost considered an LBN source, anyway?

[fascisthunter]

5. Right Wing Economic Engineering: Your REAL Transfer of Wealth

[plumbob]

6. CANNOT get companies to invest with low tax rates - no penalty for holding

cash.

You need a 90% rate on big money, just like we had in the fifties. Now it becomes imperative to invest, since the cost of holding is 90%. This is no mystery, and everyone in the country knew this before 1980. Did Reagan actually put something in the water then?

Corporate profits are high because: they pay little or no tax; they receive trillions in subsidies from you and me, regular taxpayers; the more workers they fire, the harder the remaining ones work in hope of retaining their jobs.

The purpose of the economy is not to produce profits, but products. That's Adam Smith, 1776, and of course, no one really reads him any more anyway.

So congratulations to our corporate overlords! Hope I can find an empty champagne glass that still smells like champagne and join in the fun!

[unkachuck]

10. man, you're right!

"...they pay little or no tax;..."

....didn't GE pay zero, zip, nada taxes last year?....in fact, didn't they get 3 billion dollars FROM the government?

....we need to stop this corporate tax hemorrhage before we cut one more social program....these slimy corporations think can bullshit us into picking up their bad gambling debts while they roll in the dough....they make gaddafi look like Mother Teresa....

[Lorien]

12. Excellent post. It deserves to be it's own thread. nt

[Faygo Kid]

13. They're hanging on to their money and paying themselves big bonuses. Nothing for the workers.

Over $8 million in bonuses to the top guys at bankrupt Borders, for instance.

No liquidity for the average guy or gal; destroy the unions and police, firefighters and teachers.

What a great country, eh?

[SpiralHawk]

7. "Thanks for paying our taxes, suckers. Sneer." - RepubliCorps, Inc.

"We encourage all you suckers -- oops, we meant smelly proles -- to keep watching Fox, and listening to Rush, Hannity, O'Reilly, and Beck, to keep cutting us 'special' corporate socialist breaks, and to keep on paying our Fair Share for us. Smirk. Sneer."

- RepubliCorps, Inc. & Allied Billionaires

[drokhole]

8. Glad to see that slavery's finally been updated!

"Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, laying off workers and wringing more productivity -- defined as the amount of output that comes from an hour of work -- from remaining staff..."

"Workers were expected to put in more hours without overtime pay, while staff facing fewer hours of work due to furloughs were expected to do as much as they would have in a full workday..."

"It's helped pave the way for a significant gain for corporate capital spending, dividend payouts and corporate buybacks, as well as the significant rise in stock prices..."

[paparush]

9. GE - Keep those wars and conflicts coming. They're great for the bottom line! nt

[Zorra]

11. Ever heard "Bastille Day" by Rush? Interesting lyrics.

There's no bread, let them eat cake
There's no end to what they'll take
Flaunt the fruits of noble birth
Wash the salt into the earth

But they're marching to Bastille Day
La guillotine will claim her bloody prize
Free the dungeons of the innocent
The king will kneel, and let his kingdom rise

Bloodstained velvet, dirty lace
Naked fear on every face
See them bow their heads to die
As we would bow as they rode by

And we're marching to Bastille Day
La guillotine will claim her bloody prize
Sing, o choirs of cacophony
The king has kneeled, to let his kingdom rise.

(Geddy Lee, Alex Lifeson)

Lessons taught but never learned
All around us anger burns
Guide the future by the past
Long ago the mould was cast

For they marched up to Bastille Day
La guillotine claimed her bloody prize
Hear the echoes of the centuries
Power isn't all that money buys

[No Elephants]

14. Plutonomy--one of the few thngs in the U.S. working as intended, and swimmingly, too.

[stockholmer]

15. Is Arianna Huffington's $315 million AOL payday included in those record corporate profits?

:hide:

[lonestarnot]

16. And will continue unless we organize an attempt to stop it.

[tjl148]

17. Economics

I am no expert in economics so those who know more about this correct me where I am wrong. The purpose of a corporation is not to make products, but a profit. The product is the means to that end. No profit, no business. Well usually, the fact that business and government are in bed together kind of changes that.
Raising taxes on businesses will generate more tax revenue - but the consumer (us) pays it. Taxes are added to the cost of making the product. What we need is not higher taxes but a way to encourage businesses to keep and invest the money here. One thread mentioned taxing only money not invested in the business - that might work but I'm not sure that isn't the case now. Maybe taxing only money taken out of the country.
When GE makes a profit of 5 billion and pays less in taxes then I do, we have a problem.

[fasttense]

23. You don't understand how the rich operate.

No, the purpose of corporations initially were to provide a public good. When our founding fathers finally allowed for corporations, in order to keep their corporate charters, corporations had to prove a social good annually. Only in recent years have the American people allowed corporations to focus only on profit.

A very smart rich man, (which is rare) once said he was NOT in the business of making profit, he was in business of making cars. If your goal is ONLY to make a profit, then you can make cheap, dangerous and very bad cars and sell them. But if you are in the business of making cars, you want to make the very best for the price.

Many a business has been started while making no profit during the first several years. Many a smaller business barely makes a profit. Yet we still consider them businesses.

NO, the consumer doesn't pay for a corporation's taxes in the end product. You are thinking like a small business man, not a corporation. Corporation base their prices on what the market will bear. Are Nikes made by slave labor cheaper now then when they were made by US workers? No, because people still are paying $100 a pair and the price is set by what the market will bear not by what it costs to make the product.

"One thread mentioned taxing only money not invested in the business." -um that is the definition of corporate taxes.

[wickerwoman]

28. There's profits and there's profits.

The pharmaceutical industry, for example, invests less than 25% of its massive profits in R&D, production and distribution of its products. More than 60% goes toward salaries, bonuses, and "marketing" (i.e. throwing lavish conferences for doctors to persuade them to peddle their product- one such conference with a "Back to the Future" theme involved a real DeLorean being lowered onto the stage).

Capitalism assumes that this kind of price gouging will be taken care of through competition but the current patent system allows pharmaceutical companies to hold a monopoly for years and to change minor aspects of their products to renew the patent.

I'm not an economist either, but I don't think there is any way to encourage businesses to keep and invest money in the US. Any company that can offshore will because how can American labor compete with an Indonesian factory where people make $2 a day and there are no environmental regulations? And pandering to business just creates a race to the bottom allowing them to pit cities against each other to nobody's benefit (except the corporate bottom line). It's like John Nash's game theory- as long as everyone is trying to get the girl (corporate investment), everyone's efforts cancel each other out and everyone goes home alone.

I think we have to address corporate regulation in a global context. Environmental regulation needs to be standardized as should labor rights. Monopolies need to be broken up and unfair trading practices addressed. If we can do this, the rising cost of oil will soon make it less profitable to offshore manufacturing and investment will start to return to the US.

[Juche]

18. They need another tax cut

I don't feel trickled on yet.

[La Lioness Priyanka]

20. lol. good one

[Juche]

27. Its too bad all I can do is joke about it

That or emigrate. There was an article in I think forbes that was linked here about an employer bragging about hiring interns illegally to work as free labor. I guess she felt it would win her accolates, instead all the replies were about the need for revolution.

[Overseas]

25. It sure does feel like blackmail in which the ransom just keeps going up.

We're not gonna hire anyone until the Bush tax cuts are extended.

Evolves to

We're not gonna hire anyone until corporate tax rates are lowered to 25%.

[DeSwiss]

19. The Rich Are Cancer

- And you know what we do with cancer? We cut it out before it metastasizes and destroys everything in its path.....

K&R

[undeterred]

22. Fantastic! Are they paying any taxes we can cut?

Or are they at zero already? :sarcasm:

[bemildred]

24. Plastering a big bandage on the wound is not "recovery". nt

[Kablooie]

26. So let's all sacrifice to give them MORE money so they can create jobs! Yeah!