Robert Reich: The Great Decoupling of Corporate Profits from Jobs

unsolicitedanalysis:

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

Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.

Last Friday, for example, Ford reported a $2.6 billion second-quarter profit. The firm is already more than two-thirds the way to equaling its record 1999 profits. But due to labor-saving technologies, Ford now has half as many employees as it did a decade ago.

How can you get the diagnosis this right and the prescription so wrong?  You can’t stimulate car consumption and expect jobs to pour in - we need jobs from new industries.  Old ones aren’t going to do the job, so stop with the highway projects and the bailouts of creaky old-economy blue chip corporations.

What we really need are for innovative individuals to find capital.  Instead, we’ve directed every spare dollar we have toward war, decrepit banks, and old-guard automakers.  Why?  Investing in the past means that others will drive the economy of the future - we need to completely rethink the way Keynes is being applied for it to work.

Notes

  1. google--tv reblogged this from robertreich
  2. upyourarchitecture reblogged this from dmdhashw
  3. edham-arief reblogged this from robertreich and added:
    same thing happening only delayed
  4. quotingthecrisis reblogged this from robertreich and added:
    Great Decoupling...Corporate Profits
  5. klaatu reblogged this from mikehudack
  6. edkohler reblogged this from dmdhashw and added:
    True. And it’s fun...talk about how much our educational system is failing us. I say that...
  7. reactorboy reblogged this from robertreich
  8. rubenfeld reblogged this from robertreich
  9. tinyhands reblogged this from robertreich
  10. shorterexcerpts reblogged this from robertreich and added:
    Between Georgia W. Bush...idiotically short-sighted moves like this,
  11. zigziggityzoo reblogged this from robertreich
  12. hehimself reblogged this from robertreich and added:
    Great Decoupling...Corporate Profits
  13. jamespoling reblogged this from robertreich
  14. mikehudack reblogged this from robertreich and added:
    Finally something Robert Reich writes...totally agree with.
  15. robertreich posted this