Robert Reich: The Great Decoupling of Corporate Profits from Jobs

The Great Decoupling of Corporate Profits from Jobs

by Robert Reich

Second-quarter earnings reports are coming in, and they're making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter. Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.
So with all this money and profit, they'll start hiring again, right? Wrong - for three reasons.
First, lots of their profits are coming from their overseas operations. So that's where they're investing and expanding production.
GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States - down from 468,000 in 1970.

GM isn't just hiring low-tech assembly workers in China. Last week the firm broke ground there on a $250 million advanced technology center to develop batteries and other alternative energy sources.
You and I and other American taxpayers still own over 60 percent of GM. We bought GM to save GM jobs, remember?

GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can now use the dollars it doesn't have to spend in the United States meeting its American payrolls and repaying its creditors, for new investments in China.

snip

http://www.commondreams.org/view/2010/07/27-3

sound of rats squeaking? Oh, they are jumping off the ship and look at the little packs of booty they have tossed in the water for their journey!

Wait ... what? The ship is sinking?

As the corporatocracy abandons this country in order to level the worker's playing field to destitution levels, we sit her, left with nothing but spin and the Great Simulation that allows Dorian Gray to remain handsome while we live in the progressively gruesome picture in the attic.

It seems that we are having a collective, Katrina experience while our expectations misinform us and the corporate media massage our minds with a misleading message.

Yet, what is thriving is the control that keeps us in our places and prevents us from adapting in ways that circumvent the iron grip on our culture and lifestyles.

We said this is what would be done and, surprise, surprise, we were right again...

Should we go over why bailing out the banksters was done in the worst possible way again?

Or how about how the "Health Insurance Industry Profit Protection Act" will only result in greater profits stolen from delivering worse and less care?
:kick: & R

The banksters took a huge chunk of taxpayer money and instead of lending it to small biz etc., they began investing the money in acquisitions and other places. It is all so fucked up. Sadly, it seems most of our elected leaders have fallen victim to the "I got mine and fuck the rest of you" mentality.

it's pretty disheartening. Even the "good ones" (like mine) are almost all multi-millionaires that go to DC to enrich themselves and their friends. We've got what? A handful of Reps and three Senators...

anything.

You destroy the middle class, and you destroy the consumerism that the American economy is based upon.

Reich concludes, "The reality is this: Big American companies may never rehire large numbers of workers. And they won't even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won't start buying against until they know they have reliable paychecks."

GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States - down from 468,000 in 1970.

Not that anybody's hiring, but Robert Reich would make an excellent Secretary of Commerce...or Treasury...or Defense or for that matter, President of the United States.

Thank you for the heads-up, amborin!

Not in the Tea Party sense, but in the real sense -- to take it back from the military-industrial overlords and make ourselves citizens of a functioning democracy again.

It may be an uphill battle, but it's a lot better than the last 40-odd years of knowing something was going very wrong but never knowing exactly what it was or what to do about it.

As long as the undead corporate vampires were getting fat off our blood, they were never going to loosen their grip. Now that they no longer find us a profitable investment, we may have a chance.

of unpaid overtime.

Not even a thsnk-you.

This is why the partners in his company are rich, and we're not.