Saturday Mar 26, 201104:18 PM GMT
Record profits for US 'big business' despite sluggish economy
Sat Mar 26, 2011 4:19PM
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Despite high unemployment and a largely languishing real estate market, U.S. businesses are more profitable than ever, according to federal figures released on Friday.

 

U.S. corporate profits hit an all-time high at the end of 2010, with financial firms showing some of the biggest gains, data from the federal Bureau of Economic Analysis show. Corporations reported an annualized $1.68 trillion in profit in the fourth quarter. The previous record, without being adjusted for inflation, was $1.65 trillion in the third quarter of 2006.

 

Many of the nation's preeminent companies have posted massive increases in profits this year. General Electric posted worldwide profits of $14.2 billion, while profits at JPMorgan Chase were up 47 percent to $4.8 billion. Huffington Post

 

HIGHLIGHTS

Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, laying off workers and wringing more productivity -- defined as the amount of output that comes from an hour of work -- from remaining staff, even as the recession eased. Huffington Post

 

To put that in perspective, said Lynn Reaser, the chief economist at Point Loma Nazarene University in San Diego, it's important to note that companies were able to bring production back up to pre-recession levels without hiring any more workers. Huffington Post

 

"We have now recovered all of the output lost in the recession, but we are still down by 7.5 million workers," she said. Huffington Post

 

In addition to layoffs, some companies continued to cut wages and benefits last year. Sub-Zero, the freezer and refrigerator manufacturer, told workers last year that factories in Wisconsin would have to be shut down, with 500 employees losing their jobs, unless staff took a 20 percent pay cut, The New York Times reported.

 

Workers were expected to put in more hours without overtime pay, while staff facing fewer hours of work due to furloughs were expected to do as much as they would have in a full workday, according to NPR. Huffington Post

 

FACTS & FIGURES

A plutocracy is a system of rule by people of wealth, which describes our situation far more accurately than the term democracy. commondreams.org

 

The U.S. current economy is accurately described by investment advisors and marketing consultants as a "plutonomy", a combination of the terms "plutocracy" and "economy." It refers to an economy of the very wealthy. This is the mirror opposite of economic democracy, which is an essential foundation of political democracy, both foundational to the Living Democracy of Earth Community. livingeconomiesforum.org

 

Hundreds of millions of dollars are pouring into advertisements for and against candidates -- without a trace of where the dollars are coming from. They're laundered through a handful of groups or individuals. politifi.com

 

130 foreign companies have donated more than $12.6 million (and still counting) to political campaigns through various Political Action Committees. opensecrets.org

 

From 1989 to 2010, the top ten lists of the largest U.S. donors have donated nearly 260 million dollars for election campaigns. opensecrets.org

 

Companies and interest groups spent $3.42 billion lobbying Congress and the federal government in 2008. That's a 14 percent jump from the previous year and roughly twice the 2001 amount. This is despite the worst recession since the '30s. slate.com

 

FM/SM/DB

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