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Article DetailsCorporate Profits and Unemployment | ||||||
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| So often we hear a message that we would be able to create more jobs if only we taxed corporations less. We hear there are too many regulations that are stopping businesses from expanding, and that government needs to "get out of the way" so businesses can grow. Then these businesses will provide these missing jobs that we have been waiting for. So let's take a look at corporate profits compared with the unemployment rate...  As you can see, corporate profits are better than before the recession started. They are doing fantastic after all taxes have been paid. They have more money now to do things like HIRE PEOPLE than they did before the recession started. Even with all the regulations and taxes they are more cash rich than ever! So why aren't they investing in America? I would offer that they would rather drain cash from America by hiring cheap labor elsewhere, and then sell as much as possible to the American people as possible, including extending cheap credit. The problem is that this strategy is working so well that Americans are running out of cash reserves and credit, and obviously demand is down. Demand is down because there are fewer jobs, and thost that remain pay on average less than when the recession started. How do we fix it? We create demand by investing in infrastructure. Don't pay corporations to do it for us. Hire the workers directly through the US government, and give corporations competition which they haven't had in quite some time. Make them pay more for workers, not less. And start building better roads, bridges, broadband, a superior power grid, better public transportation, parks, public buildings, etc. This is exactly what China has been doing, and they are struggling to STOP growing so fast. As people earn higher wages, they can afford more, and they also feed the economy. If we keep cutting, we are just pulling more money out of the ecomomy at the same time corporations are doing the same (yet draining cash and credit reserves). | ||||||
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On extending cheap credit, the credit card companies probably spend millions (maybe more) of dollars on sending out credit card applications to everyone and their brother, if they would curb this practice they might save some money and be able to lower interest rates and maybe help out the consumers that have gotten themselves in trouble by spending too much from the credit that the companies have extended. As someone who gets at least two credit offers in the mail per day, I have made it a practice to open up the offers, rip everything up that was included in the envelope (including the envelope that it came), stuff everything back in the postage paid envelope and send it back to them. I've been doing this for at least the past 9 years and have never seen a decrease in the offers. (yes, I have called numerous times to get off the mailing list, but it really does no good) Mailing their stuff back to them may have no effect on the credit card companies themselves, but it is very satisfying and cathartic.