Policy not profits is the reason for the slow recovery
I‘m always cynically amused by lead sentences like this from the supposedly unbiased media.
Unemployment is set to remain higher for longer than previously thought, according to new projections from the Federal Reserve that would mean more than 10 million Americans remain jobless through the 2012 elections – even as a separate report shows corporate profits reaching their highest levels ever.
Of course one has zippity do dah to do with the other. The reason corporate profits are reaching their highest levels ever is because corporations that have survived the recession have done so paring down to a "lean and mean" status by dropping headcount, closing unneeded facilities and cutting spending. Those workers that are still employed are what are necessary to carry the corporation forward in the financial situation and business climate we find ourselves in now. As the economy slowly picks up steam and additional headcount can be justified by additional business, it will be added. But, as we all know, employment is a lagging indicator – i.e. profits and such are going to go up before headcount goes up.
But there’s going to have to be a definite, traceable, unmistakable upward trend with a demonstrable increase in business before corporations add headcount again in the present business climate. And given what this administration and the 111th Congress have done – make war on American business – few are inclined to do that.
So? So it stands to reason that employment is down and will probably stay down until corporations and businesses see a much friendlier and stable business climate than they’re seeing now.
We haven’t been writing about the hostile climate here for our health or amusement. But as can be witnessed here, the subtle yet telling attempt to shift the blame is found in the first sentence. If only greedy corporations would simply start hiring instead of amassing profit, why everything would be peachy keen and our man in the White House wouldn’t be looking at the probability of high unemployment in 2012.
So prepare yourself to see these sorts of exercises in blame shifting at regular intervals over the next couple of years.
Even as conditions are likely to remain miserable for job seekers for years to come, an extraordinary bounce-back is underway in the nation’s corporate sector, with profits rebounding 28 percent over the past year to an all-time high in the third quarter.
Without this narrative, which the entire left and a good portion of the middle will swallow whole, the administration and Democrats haven’t an identified enemy with which to wage political war – and that, of course, is part of our problem now.