Tuesday, October 18, 2011

Welcome to Corporate America

Let's start with the premise that there has been a *constant* amount of real prosperity creation per capita and that it can be measured by adding up real government saving, real personal saving, and real corporate profits.


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Well, there you go. Just look at that flat trend line.

Now let's look at the saving part.


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Ouch. So where did the prosperity go?


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Is our country really going broke or is the money just being funneled to Corporate America?

Why are we borrowing so much money?


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Corporate America gets what Corporate America wants.

October 4, 2011
Corporate America seeks cover in arms of small business

(Reuters) - Facing talk of "class warfare" in Washington and protest marches on Wall Street, some of the biggest players in corporate America are linking arms with small business in what observers see as moves to bolster their images at a time of rising public anger.

So what caused the dramatic change in 1990 (as seen in the 2nd and 3rd charts above)? Could it partly be a "free lunch" trade dream?

June 25, 2011
Missing Jobs vs. Trade Deficit

Click to enlarge.

Source Data:
St. Louis Fed: Corporate Profits After Tax
St. Louis Fed: Net Government Saving
St. Louis Fed: Personal Saving
St. Louis Fed: CPI
St. Louis Fed: Population

24 comments:

getyourselfconnected said...

This is a great post mark. Nice work. Sad though.

AllanF said...

Yes, very original. But oh how I wish it were a Sarcasm Report.

And can't say Ross Perot didn't warn us... gee, I wonder if being a billionaire, he'd met and talked with other billionaires and had a hankering for what they were thinking? Nah, he was just a crazy old man. None of this was predictable, ask any Nobel Laurette economist.

There, sarcasm tag fixed.

Stagflationary Mark said...

GYSC,

It is beyond sad if one is poor. Not only would you not share in the corporate profits (since you have nothing to invest) but you also watch your job sent overseas.

Sigh.

Stagflationary Mark said...

AllanF,

Sarcasm? Here? ;)

Okay, I'll bite.

We clearly need to lower corporate taxes while simultaneously removing social services and adding a national sales tax.

Corporations are really struggling during this time of extremely high unemployment and we all need to chip in to help them out.

Heck, Apple has a pitiful profit margin of just 23.53%, thanks in part to the generosity of Chinese Foxconn.

At the very least, we need to lay off more American workers and replace them with Chinese robots before it is too late!

Mr Slippery said...

Mark,

You made a pretty strong case for buying stocks of profitable corporations. That is, if things stay as they are. I don't think it is sustainable (OWS as one symptom).

Worth more pondering.

mab said...

AllanF,

Nah, he was just a crazy old man.

Indeed!

The MSM only allows the public at large to hear the truth through the "crazies".

Why? Because there is no more effective way to discredit the truth and promote an untruthful agenda?

Stagflationary Mark said...

Mr Slippery,

You made a pretty strong case for buying stocks of profitable corporations. That is, if things stay as they are. I don't think it is sustainable (OWS as one symptom).

It is sustainable as long as we continue to have unsustainable combined government and personal savings rates! ;)

Stagflationary Mark said...

mab & AllanF,

Nobody is crazy. The consumer is alive and well! ;)

Troy said...

And can't say Ross Perot didn't warn us...

"Giant sucking sound"

In 1992 trade with China was:

$7.4B to / $25.7B from

By 1999 it was:

$13.1B to / $81.8B from

2010:

$91B to / $364B from

Mexico, 1992:

$40.6B to, $35B from

1999:

$87B to, $109.7B from

2010:

$163B to, $229B from

$66B/yr deficit with Mexico, $270B with China.

Here's what I said to some idiot on reddit.

Stagflationary Mark said...

Troy,

I think you know where I stand. The trade deficit is completely unsustainable over the long-term. One way or another it will eventually break.

First they came for the coal miners, but I was not a coal miner so I said nothing.

Nice.

Troy said...

The trade deficit is completely unsustainable over the long-term

Getting people to "follow the money" is impossible.

Plus most people on the internet are probably paid propagandists anyway.

That's what I'd do if I had a billion dollars to defend, pay 500 chumps $100,000 a year to BS everyone.

Interest would cover that expense.

Anonymous said...

"...if one is poor. Not only would you not share in the corporate profits (since you have nothing to invest)..."

How would the poor share in corporate profits if they did have something to invest?

Anonymous said...

"You made a pretty strong case for buying stocks of profitable corporations."

You say this in the face of the "rubicon" posts?

AllanF said...

My even greater fear is that in another 10 years on some other blog with some other post showing some other graph tracking the start of the "Great Hyperstagdeflanation" to the Fed's bail-out schemes commencing with the 2008 TARP, there will be some other poor bastard saying, "we'll can't say Ron Paul didn't warn us... nah, he was just a crazy old man, none of this was predictable, ask any Nobel Laurette economist."

Anonymous said...

"The MSM only allows the public at large to hear the truth through the "crazies"."

Then it will be up to the public at small to force the issues.

if (OWS == public at small) {
change is possible
}
else {
same old same old
}

AllanF said...

In theory, before the revenues actually became profits, the poor would get a bite of the apple via remuneration for their labor.

Anonymous said...

...remuneration for their labor.

It's true that corporations are currently squeezing profits from their employees, maybe it's their last gasp.

Should employees throw in the towel and elect destitution rather than helping "the man" build his life?

Cuz' voting ain't helping. What's left?

nanute said...

I'm no Nobel Laureate, and I'm not an economist, but I'll tell you right now: Ron Paul IS crazy.

Stagflationary Mark said...

Thanks for all the comments.

Long Beach port traffic is out today and so is the CPI data!

That means that I have plenty of new post fodder!

Anonymous said...

"Ron Paul IS crazy."

The only candidate who understands, truly understands, the fiscal problems that face this nation and the nations of the world...IS crazy.

The only candidate who can articulate in manageable language not only the problems but, in fact, propose useful and necessary solutions..."IS crazy".

The only candidate who can make his cases based on valid premises and therefore valid conclusions and can do so without resorting to personal attacks or insinuations towards other candidates..."IS crazy".


"I'm not an economist..."

Neither am I but what I am able to do is spot BS from a mile away and distinguish it from common sense. And "I'll tell you right now" that, given the display of intellectual firepower and side-stepping questions across the remainder of the stage in last night's debate, anyone voting for a candidate other than Ron Paul as an answer for simply removing Obama from office "IS...", well, you know.

Stagflationary Mark said...

The crazy of my crazy is my friend? ;)

nanute said...

Yeah! Let's vote for this guy: There are some things that just shouldn't be market-based. Nuclear waste disposal is one of them.

Transcript:

COOPER: Congressman Paul, you oppose this?

PAUL: Yes. Yes, I've -- I've opposed this. We've had votes in the Congress. There was a time when I voted with two other individuals, the two congressmen from Nevada. And I approach it from a state's rights position. What right does 49 states have to punish one state and say, "We're going to put our garbage in your state"? I think that's wrong.

But I think it's very serious. I think it's very serious. But quite frankly, the government shouldn't be in the business of subsidizing any form of energy. And nuclear energy, I think, is a good source of energy, but they still get subsidies. Then they assume this responsibility. Then we as politicians and the bureaucrats get involved in this. And then we get involved with which state's going to get stuck with the garbage.

So I would say, the more the free market handles this and the more you deal with property rights and no subsidies to any form of energy, the easier this problem would be solved.

Anonymous said...

nanute,

Sorry I didn't return earlier to see your response...hope you're still coming back to find this...

When I heard that question my take at that moment was that he was referring to each state acting on its own behalf, not the private businesses of that state acting on its behalf. This quote:

"And I approach it from a state's rights position. What right does 49 states have to punish one state and say, "We're going to put our garbage in your state"?"

That sounds to me like he's suggesting the federal gov stay out of state gov business, nuclear or whatever.

And yeah, let's vote for this guy.

Stagflationary Mark said...

nanute,

For what it is worth, I tend to have similar political beliefs.