John Eby: ‘Owner-ship’ sails in the face of record corporate profits
Published 5:58 pm Sunday, November 28, 2010
The Commerce Department reports that corporate profits have never been higher in American history, yet Republicans — the business party — aren’t celebrating this news.
These profits are coming not from revenue growth, which would benefit workers and executives, but from cost-cutting that keeps unemployment at 9.5 percent, allowing more of companies’ meager revenue growth to flow to the bottom line.
The New York Times calculated that at $1.66 trillion, U.S. corporations are on track for annualized profits that are the highest since such records were first kept in 1950.
Gains in profits are due mostly to rising productivity as workers spend more hours working and getting paid less to do it.
Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5 percent as output rose 4.1 percent, hours worked increased 1.6 percent and unit labor costs fell 1.9 percent, according to the Bureau of Labor Statistics.
Profits of U.S. corporations are growing much faster than their revenues.
The Wall Street Journal reported, “Overseas growth is clearly a driving factor for much of the profit gains.”
Big companies naturally focus on selling their products in overseas markets where demand growth exceeds at home.
They’re also hiring workers in many of those countries and pushing their U.S. workers to work harder for less money.
As long as there are workers outside the U.S. willing to do similar jobs for lower pay, there is nothing to stop this trend from continuing.
Corporations booking record profits at the expense of workers is nothing Democrats would want to celebrate, but if a Republican was in the White House, the GOP base would be crowing about the record-breaking numbers.
Since a Democrat is overseeing the economy, though, news of this economic milestone passed without comment from the media sector that wants to elect one of its own paid commentators to the Oval Office.
Rising from the crumbs for everyone else mentality is collaborative consumption and a whole slew of Web sites that facilitate offline sharing, such as SwapBabyGoods.com and
Neighborhood Fruit, whether it’s growing in yards or on trees on public land.
Some free, some with a fee.
Neighborrow.com says, “The owner-ship has SAILED!”
The Great Recession teaches that renting something you don’t need to use much makes more thrift sense than buying it to gather dust in your garage.
In the Boston area, RelayRides, founded by a Harvard Business School student, offers car sharing.
That’s where we’re at near the end of this decade, the Uh-Ohs.
We trust strangers more than government and institutions.
Quips, quotes and qulunkers: “Americans have an appetite for government benefits that greatly exceeds their appetite for taxes. For more than a generation, we have squared this dishonest circle by borrowing vast amounts of money … The right, for its part, continues to live in an alternative universe where there will be no need for more revenue, just cuts in spending — though of course it makes no serious effort to describe which programs will be cut. Will this conversation turn into the usual demagoguery, with each side tearing apart the things they dislike and ensuring that the deficit commission becomes one more sad story about Washington’s inability to grapple with our long-term problems? We’ve seen the political process break down and avoid dealing with immigration reform, energy policy and Social Security. Will we fail again … on the biggest test?”
— Time columnist
“The resplendent Olympians should work to put their squalid McMansion in order — by launching a public-service campaign against excessive executive compensation and devoting their considerable energies to encouraging our smartest young people to go into careers that produce jobs, not deals — before they’re allowed to lecture former assembly-line workers about the sacrifices they have to make to balance the budget.”
— Time political columnist
“I am particularly glad to no longer be asked when the Beatles are coming to iTunes.”
— Ringo Starr, on Apple’s announcement it would finally sell the band’s songs and albums through its music service
“We’re working every day, paying off the national ransom.”
— Elvis Costello in the title track of his new album, “National Ransom,” which rails against financial “hocus-pocus” while directing his trademark anger at Wall Street
Obit: One of my favorite actresses, Jill Clayburgh, who died Nov. 5 at 66.
She was nominated for an Oscar as Erica Benton in “An Unmarried Woman” in 1978.
The World Series: I know San Francisco won the arms race in five games over Nolan Ryan’s and Cliff Lee’s Texas Rangers to end a 56-year dry spell going back to Willie Mays patrolling centerfield at the Polo Grounds.
The Giants were the right team in the right place for the Year of the Pitcher, so the MVP was … 2008 Tigers shortstop Edgar Renteria!
He batted .412 and drove in six runs.
Another castoff, first baseman Aubrey Huff, played for Detroit in 2009 and led the Giants with 26 home runs.
Sports Illustrated picked the Giants third in the National League West after the Colorado Rockies and the Los Angeles Dodgers.