CORPORATE PROFITS AREN’T EXACTLY FALTERING…. Bloomberg News had an item a couple of weeks ago, reporting, “Investors around the world say President Barack Obama is bad for the bottom line.”
The complaints are pretty laughable given reality.
The nation’s workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.
Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.
The point about adjusting these figures for inflation — in adjusted terms, corporate profits are merely fantastic, as opposed to record-breaking.
Either way, the point is corporate profits aren’t exactly faltering. Indeed, this data from the Commerce Department comes a month after a related report showing profits rising faster “than during any other 18-month period since the 1920s.”
It makes the “bad for the bottom line” tack look pretty silly. In fact, it’s pretty ironic that those complaining about the Obama administration’s alleged “anti-business” policies also happen to making money hand over fist. Corporate profits are up; all of the major Wall Street indexes are up; and private-sector job growth is up, but fat-cat conservatives and corporate lobbyists nevertheless spent the entire year furiously raising money to elect Republicans. They were, apparently, outraged by the scourge of corporate prosperity.
Kevin Drum recently had a good item on the larger political dynamic.
What’s remarkable about all this is that Obama is, patently, not anti-business. All of the corporate complaints above, when you dig an inch below the surface, amount to lashing out at phantasms. However, although Obama isn’t anti-business, it is fair to say that he’s not especially business friendly. And after decades of almost literally getting their every heart’s desire from Republican presidents and congresses, this has come as something as a shock to the corporate community. When Obama puts a tax break in the stimulus bill, it’s aimed mainly at the middle class, not the rich. When he hires a labor secretary, it’s someone who actually thinks labor laws should be enforced. When he says he wants to pass a healthcare reform bill, he actually does it. (Its impact on big business is close to zero, but no matter.) There’s no evidence at all that Obama wants to punish big business, but at the same time it’s quite plain that he cares much more about the middle class than he does about the rich.
And that’s pretty hard for them to take. So they’re apoplectic.
I think that’s exactly right. I also think the political world would be wise to ignore their apoplexy.