Happy Days are here again, folks--uh, for the corporate bottom line. The people: not so much.
Profits are up big time:
While the U.S. economy staggers through one of its slowest recoveries since the Great Depression, American companies are poised to report strong earnings for the second quarter—exposing a dichotomy between corporate performance and the overall health of the economy.
Two years after the official end of the recession, a range of indicators show that the economic recovery has been the worst, or one of the worst, since the government began tracking such data after World War II: Unemployment is too high, bank lending necessary to spur spending is too low, home prices are depressed while household expectations for financial well-being are near record low levels. Many economists predict the sluggish rebound may continue for years.
Against this backdrop, many U.S. companies are expecting to report surprisingly robust profits when second-quarter earnings are announced later this month. Combined earnings of companies in the Standard & Poor's 500-stock index are projected to rise 13.6% from a year ago for the second quarter, according to an analysis of Wall Street forecasts by Brown Brothers Harriman. [emphasis added]
Real people? Bad times:
Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy's improvement since the recession's end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.
....
The biggest problem may be household indebtedness. At the peak of the economic boom in the third quarter of 2007, U.S. households collectively had borrowed the equivalent of 127% of their annual incomes to fund purchases of homes, cars and other goods, up from an average of 84% in the 1990s. The money used to pay off that debt means less available for new spending. Households had worked their debt-to-income levels down to 112% by the first quarter, in part because banks have written off some debt as uncollectible. [emphasis added]
So, what do we learn from this? Three no-brainers:
First point: the idea to give corporations a tax holiday to bring back profits from overseas is got to be one of the dumbest ideas EVER. The problem is not corporate profitability--as seen above--or cash--corporations have a trillion dollars stashed away.
Second point: the idea that the economy is in trouble because of "high" corporate tax rates is entirely phony--and the call, by among others, Bill Clinton (who, speaking as one individual, should just STFU and go away) to lower corporate tax rates also joins the ranks as one of the dumbest ideas ever.
Third point: buried in the mumbo-jumbo of all this data is a simple conclusion--the entire economic crisis is an obvious outcome of the greatest class warfare in generations.
If all the wealth of a planet is going to a few, if corporations are registering historic profit gains, if “There has been a massive wealth transfer from middle-class America’s retirement accounts to the bank accounts of the privileged few", BUT...wages have remained flat for 30 years, then...
Of course, peoples' debt will be huge. Duh.
This is simple math: if people don't have decent wages, presto, there is no money to spend on basic survival, which means debt is the only route to go to survive. Duh.
Until we stop obsessing about the non-existent debt and deficit "crisis" and start getting down to the task of getting people jobs with real paychecks, this crisis isn't over by a long shot--no matter how many dumb ideas spineless politicians come up with to service their campaign contributors.