Doesn’t this mean that we are at the cusp of an earth shattering, reality altering paradigm? American national economy and average Americans swirl the drain while corporate profits skyrocket! Could we stop pretending that the corporate interests are aligned with the well being of the country and the citizen? The intersection in the Venn diagram is almost non-existent at this point.

one comment on this?

Is this not huge?

So much for “what’s good for gm is good for America”

I have an economic theory. It’s very simple. like heat flowing through a wall between the outside and the inside, heat will flow across the wall, to the outside, till the temp is the same on either side. Unless you have a furnace (laws) to keep it warm on the inside.

the money is flowing.

America is on the inside of the wall. the furnace is broken.

“They’ve learned to produce as many or more goods without workers.”

I don’t think so. I think that the other factors you mention are more to the point–outsourcing labor and what is called “cost cutting”, though in reality it is more like disinvestment.

The piles of cash are indicative of what is really going on. Companies have been allowed to become de facto banks. They live by moving and skimming capital rather than by themselves investing it in productive endeavors. Most corporations are managed in order to keep the quarterly stock price–and thus the options and speculations of their managers and brokers–as high as possible. This plus a large amount of cash in hand makes the corporation an attractive takeover target for a leveraged buyout fund. More unearned cash for the managers and speculators.

Actual capitalism–using capital to finance production capacity or maintain a skilled labor force that creates profits–is now viewed as waste in corporate circles. Cost cutting is what fattens the bottom line, not increased productivity. Productivity is at best a necessary evil that can be be addressed by outsourcing, offshoring, and devoting as much of the cash on hand to purely financial transactions as possible.

The problem, of course, is that banking alone is not enough for a sustainable economy. Corporate “cost-cutting” doesn’t really fatten the bottom line. It merely calls a slice of investor capital “profit” so that some or all can be skimmed off by company officers and third-party investment bankers as bonuses, commission, or trading profits. The real value of the company actually declines.

What we are seeing is, in fact, a strategy of liquidation by inches, whereby legitimate investment is gradually siphoned off until the enterprise can no longer continue. Like a foreclosed house in the grip of a modern mortgage servicer, it’s being managed to death, to the detriment of consumers and investors alike.

The Transnational Capitalist Class plus The Death of the Liberal Class =
slavery

Howard Zinn:

Historically, government, whether in the hands of Republicans or Democrats, conservatives or liberals, has failed its responsibilities, until forced to by direct action: sit-ins and Freedom Rides for the rights of black people, strikes and boycotts for the rights of workers, mutinies and desertions of soldiers in order to stop a war.

Voting … is a poor substitute for democracy, which requires direct action by concerned citizens. Link

The only power left to the people is economic boycott. The TCC decided two decades ago to move to Asia

Great comment robspierre. At this point one could say that capitalism has turned into cannibalism. We are living through a liquidation of the US. In regard to foreclosure: it was never about the houses or the families (much less ‘ownership’). It was ever only about the fees. The banks made their money in bonuses based on bogus future income from mortgages that they knew would never pay off. The intent was to drive borrowers into default and then rake off the fees (late, inspection, broker price opinions, legal) from the investors. All to liquidate the middle class by threat of homelessness.

Well stated. The business of business is now to move paper and whatever the putative underlying excuse for its existence is just a convenient fiction in many cases.

When the CEO of United Health “earned” over a billion dollars a few years ago, the scales really dropped from my eyes. Here is someone who heads a company that adds no actual value at all to the health equation except to function as a middleman and skim some of the proceeds, and which makes money when they DON’T provide the services they supposedly exist to provide, and this company and asshat executive have the temerity to claim that he “earned” a BILLION dollars in one year with salary, bonus and stock options!

It was at that point that I realized we are at a point of no return. There is no moral compass, no working gauge that registers when wretched excess is reached that SHOULD turn the population into the streets.

The only comfort, minuscule indeed, is that the engorged, immoral corporate pigs who created this morass will be just as ruined as everyone else when it all just turns to dust. All their illusory gold is invested just like everyone elses in bonds backed by nothing, companies that make nothing, and houses worth a fraction of their purported value.

My only suggestion is a capital strike by the average citizen. Cash in your bonds and 401Ks and mutual funds and put your cash on the sidelines until you can be assured that there are regulations and that fraud/corruption/forgery/conversion/theft/market manipulation and the like are no longer viable business models. Or perhaps you can seek out the one company in a thousand that actually creates something of value, pays its workers well, pays out a dividend to its shareholders and has reasonable (sane) executive pay.

I have followed my own advice. The stock market and the world of corporate plundering and pillaging just makes me sick and I can no longer support it.

…corporations have experienced all-time record profits, the highest since the Commerce Department started tracking the figure 60 years ago.

I’m sure this will be a great comfort to me when I’m living under a bridge in a couple of months.

They might have better stuff in the dumpster when the homeless go dumpster-diving.

I’ve wrote about this years ago on Wall St. Workers are also consumers, so firing workers is like firing your customers. The tricky part is figuring out when U.S. “consumers,” who are, of course, no longer workers, finally give up the ghost at buying. They held up their purchasing by borrowing in the 00s, but one would think that would have ended after the housing bust. Still, U.S. consumers (in aggregate) are still buying, so the party doesn’t seem to be over quite yet.

What do you mean by “consumers … are still buying”? Is consumer demand up? Last time I looked, it wasn’t, and that was only a couple of months ago.

“The only comfort, minuscule indeed, is that the engorged, immoral corporate pigs who created this morass will be just as ruined as everyone else when it all just turns to dust.”
The dust is only ours – as in “from dust to dust”.
They have stashed away enough and own enough assets in other countries to which they can travel in their own yachts without having to even have a pat down.

I’ve got a spare trundle-bed in downtown Portland if need be.

Real personal consumption expenditures, last 5 quarters: 2.0%, 0.9%, 1.9%, 2.2%, 2.8%. Scroll down to Table 1 (pdf).

In the words of Sen Byron Dorgan, corporations have “taken our jobs and shipped them” offshore. We don’t need to create jobs, we need to bring them back. Close tax loopholes for companies that move their production to other countries and create incentives for them to return our jobs to the US.

“accelerations in private inventory investments”??? That does not sound like consumers buying stuff. That sounds like businesses restocking their shelves, no???

I bet that most of the corps are still getting state and county subsidies to operate and provide jobs. Just last week Dell in NC announced it was closing the doors. Do you have any idea how much the taxpayers have given to corporations just to do business in their states?

Hell, some of the corps getting subsidies are now overseas!

Yes, but restocking has resulted in somewhat higher private employment & longer hours/worker, which has given consumers a little buying power. In any event the #s are the #s. And there they are.

Thanks, David. Corporate executives have been rewarded for destroying the middle class for more than a decade now. Each quarter, they laid off American workers as they found newer and sleazier ways to make more money off the American people. Now that the economy is recovering from the messes they made, they’re still not willing to hire anyone or allow their employees to benefit even a little as they rake in their bonuses.

End corporate personhood.

Yes, so the portfolios of transnationals have their ups and downs, but so long as profits in one sector of the world are offsetting losses in another part, they stay on top of the world. That darn Ireland must be a bee in their bonnets, I’ll be bound.

50% of economy is finance which does create anything. 20% is taking care of the sick. The numbers just don’t mean much of anything, except to the top 2%.

Yeah, but let’s be real about those big profits; they only happened because our poor, beleagured; corporate giants were courageous enough to tell that power-mad, over-regulating Marxist asshole, Barack Obama, and his leftist democratic cronies in congress, to go shit in their hats…

Or: “Bend over a little more, could you please? Our fatcat vertebral column is getting sore from reaming you guys out.”

It may soon be “Talk Like A Pirate Day” everyday . . . Ahhhrrr, Matey. (;>

Thassit, Margaret:

God’s in his heaven; corporate profits are going through the roof; and the “trickle” is going to get “down” any year now.

Let’s all just keep bitching about Bristol’s lip-gloss, and pissing and moaning about Glenn Beck’s being a right fucking idiot, while ignoring the fact that Barack Obama has done a world-class job of protecting:

“I’ve got mine; screw you, Jack!”

As America’s ethic.

They will send in 50,000 troops one day and withdraw 1 troop the next. Then Barack Obama will hold a press conference and say, “You wanna buy a duck?”

Corporate executives have been rewarded for destroying the middle class for more than a decade now.

I wish those corporate executives would take a second and think about who is next on the menu, after the middle class is gone.
It is a snake eating its tail and will not stop until all that is left is the top tenth of a percent.

I think it was Robert Reich who said that it’s better to have a slightly smaller piece of a bigger pie than a really big piece of a little pie.

Unfortunately, the problem isn’t just out of control executive compensation. It’s also that the investor class wants the executives rewarded for doing everything and anything to get a better quarterly result.

Thus, the American worker/consumer gets stepped on until everything falls apart and the American taxpayer has to bail out the corporations without so much as a ‘thank you.’

On a related note, ZH posted an article the other day that might help explain things:

The top 5% of Americans by income are responsible for 37% of all consumer spending– about the same as the entire bottom 80% by income (39.5%).

And on the otherside of the world we have George Soros investing in the high growth industry of Indian poverty. Soros invested in SKS Microfinance which specializes in making 200 dollar loans to the poorest of the poor at a 24% interest rate. Of course this leads to greater poverty, suicides, death… the repo men on that side of the world take everything(even your food stamps).

http://www.nytimes.com/2010/11/18/world/asia/18micro.html?_r=1&src=me&ref=homepage

But so what? What is it they are buying? A Lamborghini Murcealago costs $382,400. For that you can buy about 460723 rolls of toilet paper. So what the rich spend on toys outweighs what we spend on necessities.

But can you run an economy on the economics of Lamborghinis? I’m not an expert, but I doubt it. There is not enough demand for this tye of car, so no one can justify the expense of investing in production tooling. As a result, Lambos are pretty much hand made–not very efficient and quality can be spotty. The money-losing hand-made sportscars were largely carried by the firm’s profitable tractor business in the 60s. The tractor-magnate wanted to ride around in his own cars and thumb his nose at hoity-toity Ferrari owners, so he didn’t care that they cost alot. But during the first oil crisis and the resulting downturn, the market even for these few cars dried up and the company went bankrupt. Chrysler, private investors, and now VW have tried to resurrect the firm. But nobody has made money, to the best of my knowledge.

The moral is that Lambos cost alot, employ few, and are the first commodity to lose value in a crisis. Nobody needs a Lamborghini.

Toilet paper is another matter. Everybody needs toilet paper. But nobody can have it without a mass market to support the costs of tooling up for efficient production. Handmade toilet paper would probably be too expensive to make and of too poor a quality to be attractive to the rich.

So, if things go on as they are, there will be no toilet paper for anyone. The rich are going to have to use their dollar bills and their bearer bonds. And the latter won’t be useful for much else.

“Corporations working for you and bringing you closer to Feudalistic Peony everyday.

The only power left to the people is economic boycott.

No, that power is gone, as this thread points out.

They’ve learned to produce as many or more goods without workers.

They’ve learned to produce as many or more goods outsourcing jobs to foreign workers making 15 cents per hour, and off-shoring corporate profits to tax havens where they pay no US taxes. Is this a great country or what?

The point was that the bottom segment of US workers could fall off a cliff and it’d be a non-event in terms of what the newspaper headlines label as ‘economic growth’. What’s left of our economy is geared toward servicing the rich. The rich do most of the consumer spending. The poor have very little buying power.

As for toilet paper and Lamborghini’s, they matter very little in this economy. The economy is dead and in the process of self canibalizing. Income isn’t related to production, it’s increasingly based on fraud, accounting tricks and government bailouts.

You call it a “strategy of liquidation by inches”. That’s probably as good a term for it as any. I don’t think it’s a linear process. In the 1980′s it was liquidation by inches, 1990′s by feet and in the 2000′s by 10 yards at a clip.

If we wait till the rich have thier fill and put an end to this dead system, it’s gonna be grim. Look as what Democrat donors like George Soros are up to in India. He’s not shy about profiting from the suicides of the ultra poor.