Economist Robert Reich makes a few New Year's Predictions:
New Years Prediction (II): The U.S. Economy In 2011
By Robert Reich on Dec 30, 2010
Corporate America is in a V-shaped recovery. That’s great news for investors and everyone whose savings are mainly in stocks and bonds. It’s also great news for executives and Wall Street traders, whose pay is linked to stock prices. All can expect a banner 2011.
But most American workers are trapped in an L-shaped recovery. That’s bad news for the Main Streets and small businesses in 2011. It’s also a bad omen for home prices and sales, and everyone whose savings are mainly in their homes.
When the letter L is accompanied by XOXO's -- it can be a heart-warming thing.
But when the Letter L is accompanied by the unending trends of Unemployment and Outsourcing -- it takes on a decidedly different connotation:
In our current Business context ... L is for Losers.
Robert Reich continues to do what he does best --
explain the disconnect between the Winners and Losers in Today's America ...
[ WHY in the world, doesn't this guy have a seat on the Cabinet? He's miles more capable than some of the outgoing advisers ...]
The big disconnect between corporate profits and jobs is likely to continue because America’s big businesses are depending less and less on U.S. sales and U.S. workers. Their big profits are coming from two sources:
(1) growing sales in China, India, and other fast-growing countries, and
(2) slimmed-down US payrolls.
In a typical recovery, profits lead to more hiring. That’s because in a typical recovery, U.S. consumers head back to the malls -- and their buying justifies more hires. Not this time.
So were still not in a "typical recovery" ...
Americans are not spending, BECAUSE Americans are NOT being hired.
U.S. companies are hiring -- just not in the U.S.
American businesses have created 1.4 million jobs overseas, but fewer than 1 million here, according to report.
By Pallavi Gogoi, Associated Press -- 12/28/2010
Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are – just maybe not in your town. They're hiring overseas [...]
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.
But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S.
The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.
"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.
[...]
"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."
With the future looking brighter overseas, companies are building there, too.
What's good for American companies, is not necessarily What's good for the American People, either.
Yeah, I'd say that is one serious Disconnect.
Why Do Corporations STILL get a Tax Credit for Outsourcing Jobs? (link)
Why Do Wall Street Speculators STILL escape a minuscule Financial Transaction Tax (FTT) ?
Why Do Republicans get to Block any corrective actions to restrain the Outsourcing trends, and STILL get to escape all blame for their L-Shaped results?
Could it be, that Republicans really only care about V-shaped Recoveries for their Corporate Benefactors?
V, W, L and What it Means for Your Financial Future
pacificmountainadvisors.com
V-Shaped Recovery: The stock market rebounds extraordinarily fast without retesting lows on its way to setting new highs. A great example would be the recovery following the Dot-Com Bust.
Causes: V-shaped recoveries often take place after severe panic selling or external shocks to the financial system. [...]
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L-Shaped Recovery: The stock market falls and does not return to a normal level of growth for many years, if ever. This type of recovery is most associated with Japan following the bursting of their asset-price bubble in 1990.
Causes: L-shaped recoveries are typically caused by either severe asset-price bubbles or high unemployment, also accompanied by inflation. [...]
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If V is for Victory ... you can probably guess the next answer,
"Victory for WHO ???"
[ Where in the DC-world, are Economists like Robert Reich, when WE need them? ]