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Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

https://i.imgur.com/CwVBR.gif
WASHINGTON — Strong second-quarter earnings from McDonald's, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.

But millions of ordinary Americans are stranded in a labor market that looks like it's still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.

"I've never seen labor markets this weak in 35 years of research," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.

Wages and salaries accounted for just 1 percent of economic growth in the first 18 months after economists declared that the recession had ended in June 2009, according to Sum and other Northeastern researchers.

In the same period after the 2001 recession, wages and salaries accounted for 15 percent. They were 50 percent after the 1991-92 recession and 25 percent after the 1981-82 recession.

Corporate profits, by contrast, accounted for an unprecedented 88 percent of economic growth during those first 18 months. That's compared with 53 percent after the 2001 recession, nothing after the 1991-92 recession and 28 percent after the 1981-82 recession.

What's behind the disconnect between strong corporate profits and a weak labor market? Several factors:
  • U.S. corporations are expanding overseas, not so much at home. McDonalds and Caterpillar said overseas sales growth outperformed the U.S. in the April-June quarter. U.S.-based multinational companies have been focused overseas for years: In the 2000s, they added 2.4 million jobs in foreign countries and cut 2.9 million jobs in the United States, according to the Commerce Department.   
  • Back in the U.S., companies are squeezing more productivity out of staffs thinned out by layoffs during Great Recession. They don't need to hire. And they don't need to be generous with pay raises; they know their employees have nowhere else to go.   
  • Companies remain reluctant to spend the $1.9 trillion in cash they've accumulated, especially in the United States. They're unconvinced that consumers are ready to spend again with the vigor they showed before the recession, and they are worried about uncertainty in U.S. government policies.

"Lack of clarity on a U.S. deficit-reduction plan, trade policy, regulation, much needed tax reform and the absence of a long-term plan to improve the country's deteriorating infrastructure do not create an environment that provides our customers with the confidence to invest," Caterpillar CEO Doug Oberhelman said.

Caterpillar said second-quarter earnings shot up 44 percent to $1.02 billion— though that still disappointed Wall Street. General Electric's second-quarter earnings were up 21 percent to $3.76 billion. And McDonald's quarterly earnings increased 15 percent to $1.4 billion.

Still, the U.S. economy is missing the engines that usually drive it out of a recession.

Carl Van Horn, director of the Center for Workforce Development at Rutgers University, says the housing market would normally revive in the early stages of an economic recovery, driving demand for building materials, construction workers and appliances. But that isn't happening this time.

And policymakers in Washington have chosen to focus on cutting federal spending to reduce huge federal deficits instead of spending money on programs to create jobs: "If we want the recovery to strengthen, we can't be doing that," says Chad Stone, chief economist at the Center on Budget and Policy Priorities.

For now, corporations aren't eager to hire or hand out decent raises until they see consumers spending again. And consumers, still paying down the debts they ran up before the recession, can't spend freely until they're comfortable with their paychecks and secure in their jobs.

Said Van Horn: "I don't think there's an easy way out."
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pirana6
Go Cougs!
+626|4635|Washington St.
Just about time for a trickle-down? Now's your chance big corporations. I'm a recently college grad with no job.

I'll wait up.
Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

The question is how do we encourage them to create jobs at home?
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pirana6
Go Cougs!
+626|4635|Washington St.

Kmar wrote:

The question is how do we encourage them to create jobs at home?
It looks like we need to spend more to show them they can dump their profits into domestic products and jobs, which they are apparently afraid to do (justifiably).

But we need jobs to be able to spend money on products...

vicious cycle?

edit i can't spell

Last edited by pirana6 (2011-07-23 01:40:51)

Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

We should be looking at what makes foreign markets look so much more appealing. Are the trade practices fair?

That's the only way to deal with that paradox.
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Dilbert_X
The X stands for
+1,618|4450|eXtreme to the maX
McDs is irrelevant, if they're opening restaurants abroad they need staff abroad - unless they're talking about manufacturing jobs.

Business in the US is apparently bad, they need fewer staff there, companies are doing better business abroad, thats the way it goes - should they not expand in expanding markets to prop up a shrinking market?

Caterpillar, it would be better if they were manufacturing there but I guess US companies aren't buying eqpt right now. Capital goods buying goes in huge cycles and the US is dead now.
Most people want to buy local and if that means forcing manufacturers to manufacture local then so be it. The US has done it long enough and other countries are learning that game.

Find a way to give advantage to local companies without breaching the WTO, I think the only option is to devalue the currency.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
AussieReaper
( ͡° ͜ʖ ͡°)
+5,760|4497|what

Kmar wrote:

We should be looking at what makes foreign markets look so much more appealing. Are the trade practices fair?

That's the only way to deal with that paradox.
Maybe if you spent more on US made products than imports.
https://i.imgur.com/maVpUMN.png

"coz you a far cry from acclaim nigga ubisoft"
Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

Consumer Confidence, or lack thereof is what is driving the lack of at-home-investing. That and it's easier to take advantage of workers in other countries. In other words, go ahead and refuse to work unless you get xxxx, we'll just have other people do it for much less than xxxx.
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Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

AussieReaper wrote:

Kmar wrote:

We should be looking at what makes foreign markets look so much more appealing. Are the trade practices fair?

That's the only way to deal with that paradox.
Maybe if you spent more on US made products than imports.
That's a big demand to ask of consumers who are struggling like they've never had to do before. Look at the popularity of "extreme couponing". People are trying to cut wherever they can. Yes it may be shortsighted, but the situation is dire for many.
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AussieReaper
( ͡° ͜ʖ ͡°)
+5,760|4497|what

Kmar wrote:

Consumer Confidence, or lack thereof is what is driving the lack of at-home-investing. That and it's easier to take advantage of workers in other countries. In other words, go ahead and refuse to work unless you get xxxx, we'll just have other people do it for much less than xxxx.
Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
https://i.imgur.com/maVpUMN.png

"coz you a far cry from acclaim nigga ubisoft"
lowing
Banned
+1,662|4996|USA
The US govt. needs to stop trying to rape corporations by taxing them to death. Other countries offer incentives for companies to expand there. The US is in competition for that business and they will not get it by offering to steal more of their money than another country will.

Would you choose to build a business in a country whee the govt. was going to rape you in taxes, over a country where the govt. will let you keep more of what you earn? But of course you will never convince some that companies are in business to make profits, they think they are supposed to be in business to provide for the people.

Last edited by lowing (2011-07-23 02:08:41)

lowing
Banned
+1,662|4996|USA

AussieReaper wrote:

Kmar wrote:

We should be looking at what makes foreign markets look so much more appealing. Are the trade practices fair?

That's the only way to deal with that paradox.
Maybe if you spent more on US made products than imports.
I would be glad to, if the US product was better. IF the US makes an inferior widget, then they deserve to lose whatever market share they lose.
Jaekus
I'm the matchstick that you'll never lose
+957|3523|Sydney

lowing wrote:

The US govt. needs to stop trying to rape corporations by taxing them to death. Other countries offer incentives for companies to expand there. The US is in competition for that business and they will not get it by offering to steal more of their money than another country will.

Would you choose to build a business in a country whee the govt. was going to rape you in taxes, over a country where the govt. will let you keep more of what you earn? But of course you will never convince some that companies are not in business to make profits, they are supposed to be in business to provide for the people.
I thought the tax breaks companies get was very significant. Someone posted stats in another thread showing companies that gross in the billions pay under 5% tax.

Last edited by Jaekus (2011-07-23 02:05:00)

Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

AussieReaper wrote:

Kmar wrote:

Consumer Confidence, or lack thereof is what is driving the lack of at-home-investing. That and it's easier to take advantage of workers in other countries. In other words, go ahead and refuse to work unless you get xxxx, we'll just have other people do it for much less than xxxx.
Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
Again, that's just going to raise the cost of consumer goods. Same problem. We love those low priced imports.
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lowing
Banned
+1,662|4996|USA

AussieReaper wrote:

Kmar wrote:

Consumer Confidence, or lack thereof is what is driving the lack of at-home-investing. That and it's easier to take advantage of workers in other countries. In other words, go ahead and refuse to work unless you get xxxx, we'll just have other people do it for much less than xxxx.
Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
By doing that, you are not being fair to an outside business looking to sell what might be a superior product than what is offered in the states. YOu are then forcing that company to unfairly raise its price out of competition. Letting an inferior widget manufacturer succeed where it should fail.
lowing
Banned
+1,662|4996|USA

Jaekus wrote:

lowing wrote:

The US govt. needs to stop trying to rape corporations by taxing them to death. Other countries offer incentives for companies to expand there. The US is in competition for that business and they will not get it by offering to steal more of their money than another country will.

Would you choose to build a business in a country whee the govt. was going to rape you in taxes, over a country where the govt. will let you keep more of what you earn? But of course you will never convince some that companies are in business to make profits, they think they are supposed to be in business to provide for the people.
I thought the tax breaks companies get was very significant. Someone posted stats in another thread showing companies that gross in the billions pay under 5% tax.
Maybe, I dunno, but whatever it is, it is obviously not enough of an incentive compared to where the companies are going.

Last edited by lowing (2011-07-23 02:08:02)

Jaekus
I'm the matchstick that you'll never lose
+957|3523|Sydney
The labour costs overseas are a lot lower (like China for example), so that's one incentive for big business to move offshore.
lowing
Banned
+1,662|4996|USA

Jaekus wrote:

The labour costs overseas are a lot lower (like China for example), so that's one incentive for big business to move offshore.
yeah and?
Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

Jaekus wrote:

lowing wrote:

The US govt. needs to stop trying to rape corporations by taxing them to death. Other countries offer incentives for companies to expand there. The US is in competition for that business and they will not get it by offering to steal more of their money than another country will.

Would you choose to build a business in a country whee the govt. was going to rape you in taxes, over a country where the govt. will let you keep more of what you earn? But of course you will never convince some that companies are not in business to make profits, they are supposed to be in business to provide for the people.
I thought the tax breaks companies get was very significant. Someone posted stats in another thread showing companies that gross in the billions pay under 5% tax.
http://www.forbes.com/2008/06/26/bizcou … x_map.html
Click on Corporate tax rates. The US is pretty high.
https://i.imgur.com/PfM9l.jpg
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AussieReaper
( ͡° ͜ʖ ͡°)
+5,760|4497|what

Kmar wrote:

AussieReaper wrote:

Kmar wrote:

Consumer Confidence, or lack thereof is what is driving the lack of at-home-investing. That and it's easier to take advantage of workers in other countries. In other words, go ahead and refuse to work unless you get xxxx, we'll just have other people do it for much less than xxxx.
Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
Again, that's just going to raise the cost of consumer goods. Same problem. We love those low priced imports.
Increasing the cost of consumer goods that are imported. Cars for example. The domestically priced cars won't rise in price and be more competitive.


Lowing, the above works because companies that can't compete die out and you have a monopoly. Tariffs increase competition, so what if they prop up an inferior competitor, if the inferior is only a dollar value?
https://i.imgur.com/maVpUMN.png

"coz you a far cry from acclaim nigga ubisoft"
Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

Jaekus wrote:

The labour costs overseas are a lot lower (like China for example), so that's one incentive for big business to move offshore.
Lower relative to say .. the US. However if you intentionally devalue your currency on the world scale, and keep inflation in check at home with incredible growth, that lower wage actually goes far locally.
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Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

AussieReaper wrote:

Kmar wrote:

AussieReaper wrote:


Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
Again, that's just going to raise the cost of consumer goods. Same problem. We love those low priced imports.
Increasing the cost of consumer goods that are imported. Cars for example. The domestically priced cars won't rise in price and be more competitive.
They aren't buying the domestic cars because they are already priced out of the market. You're forcing people to spend what they do not have. The problem is immediate.
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lowing
Banned
+1,662|4996|USA

AussieReaper wrote:

Kmar wrote:

AussieReaper wrote:

Then you place tariffs on imports. Increases spending at home, and raises revenue through taxes.
Again, that's just going to raise the cost of consumer goods. Same problem. We love those low priced imports.
Increasing the cost of consumer goods that are imported. Cars for example. The domestically priced cars won't rise in price and be more competitive.


Lowing, the above works because companies that can't compete die out and you have a monopoly. Tariffs increase competition, so what if they prop up an inferior competitor, if the inferior is only a dollar value?
Because the inferior is not only the dollar value. THe product itself will be inferior. The govt. has eliminated the competition by forcing the to price themselves out of the market. Companies that can't compete should die out not be propped up.

I do not want a govt. leading me down a path that has fixed the market that leaves me really only a few shitty choices. Buy the cheap, over priced POS. or buy the even more over priced one that I can't really afford, ( we see the results of that thinking) or buy nothing. The companies should stand on their own merit. not what a govt. props them up to be. Gotta love big govt. sticking their hands in a free market.

Last edited by lowing (2011-07-23 02:27:20)

Kmar
Truth is my Bitch
+5,695|4945|132 and Bush

lowing wrote:

AussieReaper wrote:

Kmar wrote:

Again, that's just going to raise the cost of consumer goods. Same problem. We love those low priced imports.
Increasing the cost of consumer goods that are imported. Cars for example. The domestically priced cars won't rise in price and be more competitive.


Lowing, the above works because companies that can't compete die out and you have a monopoly. Tariffs increase competition, so what if they prop up an inferior competitor, if the inferior is only a dollar value?
Because the inferior is not only the dollar value. THe product itself will be inferior. Companies that can't compete should die out.

I do not want a govt. leading me down a path that has fixed the market that leaves me really only a few shitty choices. Buy the cheap, over priced POS. or buy the even more over priced one that I can't really afford, ( we see the results of that thinking) or buy nothing. The companies should stand on their own merit. not what a govt. props them up to be.
And this is why the US will die out lowing. Because we can't compete. I can't say that I necessarily disagree with you (letting the market decide), but the playing field in the global economy is far from level. Everything I've read so far in this thread has been said many times. I am just looking for more ideas really.. lol.
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lowing
Banned
+1,662|4996|USA

Kmar wrote:

lowing wrote:

AussieReaper wrote:

Increasing the cost of consumer goods that are imported. Cars for example. The domestically priced cars won't rise in price and be more competitive.


Lowing, the above works because companies that can't compete die out and you have a monopoly. Tariffs increase competition, so what if they prop up an inferior competitor, if the inferior is only a dollar value?
Because the inferior is not only the dollar value. THe product itself will be inferior. Companies that can't compete should die out.

I do not want a govt. leading me down a path that has fixed the market that leaves me really only a few shitty choices. Buy the cheap, over priced POS. or buy the even more over priced one that I can't really afford, ( we see the results of that thinking) or buy nothing. The companies should stand on their own merit. not what a govt. props them up to be.
And this is why the US will die out lowing. Because we can't compete. I can't say that I necessarily disagree with you (letting the market decide), but the playing field in the global economy is far from level. Everything I've read so far in this thread has been said many times. I am just looking for more ideas really.. lol.
If the US dies out, it will be at the hands of big govt. not because we as a society can not compete. which is why I am for govt. staying out of the market place, or anything else really. I think the economy is self leveling if the govt. would stop trying to manipulate it, so that it comes out with more power and control over our lives. You know our society worked best when the govt. served the people, not the people serving the govt.

Last edited by lowing (2011-07-23 02:34:19)

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