For Corporate America, it's "Morning in America", babe. Time to party, break out the champagne, lock in a little trip on the Gulfstream to the South of France. For the rest of the people, oh, well, nose to the grindstone--it's as dark as can be.
The headline in the business press--Bloomberg--is all cheery: "Corporate U.S. Healthiest in Decades Under Obama With Lower Debt". The top-line message:
Corporate and economic statistics almost six years into his administration paint a different picture. Companies in the Standard & Poor’s 500 (SPX) Index are the healthiest in decades, with the lowest net debt to earnings ratio in at least 24 years, $3.59 trillion in cash and marketable securities, and record earnings per share. They are headed this year toward the fastest average monthly job creation since 1999, manufacturing is recovering and the U.S. has returned as an engine for global growth. The recovery, which stands in contrast to weak growth in Europe and Asia, has underpinned an almost threefold gain in the Standard & Poor’s 500 Index since March 2009.
And:
In total, S&P 500 profit as measured by Ebitda -- earnings before interest, taxes, depreciation and amortization -- increased to $1.84 trillion for the 12 months through the end of last quarter from $1.2 trillion in 2009.
The jump in earnings has meant that companies can service their debt more easily. In the six years since Obama became president, corporate debt as measured against earnings has fallen to the lowest point since at least 1990. For companies in the S&P 500, the ratio of net debt to Ebitda is currently 1.6, down from a high of 4.9 in 2003, according to data compiled by Bloomberg.
That ratio, a marker of corporate health, has also been helped by the cash that companies are piling up. Those holdings for S&P 500 companies have jumped to $3.59 trillion from $2.28 trillion four years ago, a build-up that lowers their net debt.
“When I came into office, our economy was in crisis.” Obama said in an interview aired Sept. 28 on CBS television’s “60 Minutes.” Now, in addition to a lower unemployment rate and a cut in federal deficits, “corporate balance sheets are probably the best they’ve been in the last several decades.”
One problem. Corporate balance sheets don't tell you how well the people are doing, Mr. President. And, if you don't understand that, then, you continue to be confused by the lack of enthusiasm for Democrats and the reason you don't get "credit" for a "good economy."
Yes, the economy was in crisis when you came into office--thanks to the very bankers who you and Eric Holder refused to either jail or force out of their jobs in return for **taxpayer bailout money**. And you handed trillions of dollars to banks--but very little of that trickled down to people. And the system has not really changed.
So, though corporations may be cheering, people don't feel very good:
Consumer confidence fell in September for the first time in five months, and home prices in July rose less than expected from a year earlier, underscoring the unsteady nature of United States growth.
Another report on Tuesday showed that business activity growth in the Midwest slowed slightly in September.
“We’re continuing to effectively struggle,” said Mike Englund, chief economist at Action Economics. “Some of the optimism that we got in the updraft in consumer confidence in the third quarter was probably a bit overstated.”
It is a sign of how pathetic the debate has become that Democrats run around trumpeting a drop in the unemployment rate to 6.1 percent--a rate that once upon a time was considered very high, in the good old says when Democrats might have campaigned for FULL EMPLOYMENT (as an aside, "full employment" is still the legal mandate for the Federal Reserve Board, along with price stability, not that anyone ever tries to hold the Fed to a FULL EMPLOYMENT goal...but I digress).
It isn't that the people are stupid and need reminding that somehow the facts, when repeated in presidential speeches, are that, snap out of it, all is rosy.
This is the graph that should be tattooed on the president's head:
The bottom line is this: the hurt to people is 50 percent worse than what the official unemployment number that corporate America and the White House and other keep using.
Because the people in the corporate suites, the talking heads, the analysts, the president, the White House operatives--this isn't their life.
None of those people are among the millions of people who just have given up--the same people who, wow, don't have much confidence in the economy.
Why is this a fucking hard idea to get?
As I wrote the other day, just in the G20 countries alone, there is a gap of tens of millions of jobs--it will be 63 million by 2018.
The message is pretty clear, as the International Trade Union Confederation argued recently, and I wrote here: All your fancy stats about corporate balance sheets don't mean shit if people don't have higher wages, and when the share of prosperity being created by shit being made (also known, in more refined terms, as the Gross Domestic Product) goes to the top one percent.
People don’t have money, and whatever dollars they earn goes to pay down debt because they are freaked out that another financial crisis could come again.
Wake the fuck up.