Um, okay. I recently came across this statement by Steve Wynn, a Las Vegas entrepreneur, who called President Obama “the greatest wet blanket to business…”. These kind of statements are being copiously repeated in the conservative echo chamber. So, I decided to do some quick research and discovered this gem of a graph below.
The trend-line above illustrates the corporate profits after taxes (CP) for the past 10 years. The shaded region in the graph indicates the recessionary period where the corporate profits took a plunge. However, what has happened since then has taken even me by surprise. Subsequent to the recession (at least in technical terms), the corporate profits have risen to the highest level in the past decade. Now, this is maybe a positive symptom for the administration, but there is an important silver lining in it. The rise in corporate profits is not accompanied by job-creation. This is especially disconcerting because it indicates that despite growth in worker productivity and overall output, the job-growth has remained anemic.
This whole episode takes me back to my undergrad History of Econ. Thought class where we studied about a Polish economist named Michel Kalecki. Mr. Kalecki argued that recessions were extremely sympathetic to the elites and corporations because they create a surplus labor supply and forces the existing workers to work even harder to save their jobs– this ends up raising the rate of relative surplus-value for a corporation.
To sum it up, this is bad, real bad.