Why are corporations doing so well as the economy struggles?

[Direckshun]

This is something I'd like to see your explanations on.

Corporations are recording record profits in 2012. Not good profits, record profits.

And yet our economy struggles at a little under 3% growth and a high unemployment rate.

Why, in your opinion, is the economy so bad yet businesses are doing so great?

http://economix.blogs.nytimes.com/20...orate-profits/

Record Corporate Profits
United States corporate profits reached a record high in the third quarter of this year, even adjusted for inflation, according to a report from the Bureau of Economic Analysis.
By CATHERINE RAMPELL
November 29, 2012, 3:00 pm



The increase from the second quarter was entirely a result of stronger business at home. Profits received from American-owned businesses abroad fell slightly in the third quarter, which may not be surprising given the recession in Europe and the slowdown in China.

Additionally, all of the growth in domestic corporate profits was accounted for by the financial sector.

Domestic profits of financial corporations rose $71.3 billion in the third quarter, after falling $39.7 billion in the second. Domestic profits of nonfinancial corporations, on the other hand, decreased $1 billion in the third quarter, after rising $27.8 billion in the second quarter.

[go bowe]

Originally Posted by |Zach|

If you explain the reasons for what and why that is not semantics.

You know words mean things.

whaaasis? words mean things?

bloody communist artiste savant!

this here is americur and don't you forget it!

[RJ]

Originally Posted by Brock

They've figured out they can do it without hiring a bunch of people. All you have to do is scare the shit out of your remaining employees and they'll work longer hours for free.

I believe Brock has summed up the answer in just two short sentences.

[RJ]

Originally Posted by Dallas Chief

Illegal AFAIK. We watch this like a hawk in my company. No work off the clock. Zip. Zero. None. People get fired for working off the clock, no warning, no reprimand. First time and you are gone, it is that serious around here.

Good for your company, I applaud them.

[scott free]

Originally Posted by RJ

Good for your company, I applaud them.

THE BEATINGS WILL CONTINUE

[Pants]

Originally Posted by Fish

Times are tough. Everybody is having to make sacrifices. Just appreciate the fact that you have a job. I realize we said this last year, and the year before, but hopefully next year we'll be in position to give annual raises again.

Meanwhile, in the CEO's office:

True story: I used to work for UHG. In 2008, nobody got any raises or bonuses. It was due to the extremely poor economy, they said. Well, Steve Hemsley, the CEO, got a $102 million bonus. I guess the CEOs aren't really affected by the economy? I don't know.

[Psyko Tek]

I was thinking supply demand?

no demand no hiring

no money to spend no demand

it's a nasty ass cycle

is manufacturing dead in the USA?
service jobs are gonna kill this country
and management and walls street can all be out sourced also

[blaise]

Originally Posted by Fish

No, I'm not envious. I've never wanted to be super rich. That's an awfully simplistic and assumptive way to look at it. Stop trying to argue and make an effort to understand.

This practice of mega corporations rewarding CEOs and driving income inequality to absurd limits, while cutting jobs and forcing the workforce to work for peanuts with no benefits, is killing America. Corporations have a stranglehold on the economy. They have roots so deep into the government, that they're affecting law for themselves. That's why we have these record profits in the midst of record unemployment. They're running the game.

You're defending organizations that don't give a shit about you or anything else except the few men at the top. You're encouraging greed in the face of massive unemployment. For what? Do you really think this kind of thing makes America better? Tell me how this form of capitalism puts the American dream in reach for those who want it...

Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

[blaise]

Originally Posted by Mr. Flopnuts

Capitalism baby! It's capitalism. Make the most money you can. Don't complain. One of these days, it could be you! There is no better opportunity on earth to live a wonderful lifestyle than here in the United Corporations of America. U-C-A! U-C-A U-C-A!

If you don't love it, leave it!

If a person thinks corporate profits are the reasons they're not succeeding in life then I would bet they never really had much of a chance to begin with.

[RNR]

Originally Posted by blaise

Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

I had a similar conversation with some guys I work with. Our company built a plant in NC. There are very few people in this area that have any aircraft experience. These guys have been working for the company for a little over a year, and are good workers. One of them was ranting about how much the CEO and other high level managers make compared to their wages. I mentioned that they had started recently and were performing well. I then pointed out that it proves whoever is driving the next car on the highway presumably could do the same. I asked them what have they done to position themselves wage wise. I suggested they review the bio of the CEO. He has several degrees, MIT among other prodigious schools of higher learning. He has spent his life tailoring his skill set to his chosen profession. We are very replaceable as there is a very large percentage of the population capable of performing our jobs. However someone with his skill set is much harder to find. Damn that is a lot of typing on a mobile device lol~

[chiefzilla1501]

Originally Posted by blaise

Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

People shouldn't defend CEOs. They are squeezing more work out of people for less pay and cutting back on employees, while doing nothing to cut back on their own pay. The fact that CEOs are making more money, while employees are making the same money for significantly more work is a problem. Secondly, it's ridiculous that CEOs are being compensated handsomely for failure. What's the point of a bonus anymore?

Problem #2. CEOs aren't investing back into their companies. This is the biggest problem in America. They could be investing more in R&D or new plants or new ventures, but they can't do that because executives are pocketing a disproportionate amount of wealth. It could be invested into technology to make the business more efficient. In marketing. Etc.... That's bullshit. These are executives. They didn't build their business, they earned the right to own it on behalf of the shareholders.

Problem #3. They get compensated for short-term performance. It doesn't matter if they create jobs 3 years from now. Just what they do today. So many are willing to cheat or create artificial results that damn us 3 years down the road. Here's a great example. To beat sales targets, you can raise commission to your sales team.

I work for a corporation. I love it and defend the private sector. But it is mind numbing that people on the right would defend executive compensation. It's getting out of control. They shouldn't be making more money while the economy tanks, nor should they have the power to squeeze a ton of work out of existing employees, nor should we applaud them for lining their pockets with more money as they cut jobs in an economy that really could use executives' support to get the overall economy going again. They are part of the problem, not the solution.

[chiefzilla1501]

Originally Posted by whoman69

Greed.

The companies are profitable because they have wrung every ounce of money they can from outsourcing or paying lower wages to their non executive employees while paying immense amounts of money to those executives who have made the company so profitable. They could certainly hire if executive pay was inline with what it was 30 years ago. Minimum wage under that scenario would be $11/hr. How many aren't even making what the equivalent was for minimum wage?

This is also why the economy cannot grow. Companies need to realize the people they outsourced can no longer afford their products and certainly the ill paid people they hired can't either.

I don't have a problem with outsourcing. Outsourcing is a great thing. It means we get better prices. The theory of comparative advantage (in economics) is that if your country isn't great at making it, they should rely on another country to do it cheaper.

Rather than worry about outsourcing jobs, we should be encouraging the innovation that creates jobs that are uniquely American.

[Fish]

Originally Posted by blaise

Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

Unbelievable that you could defend that practice.

But you never answered the question. How is that type of capitalism making America better? Hostess just closed their business, and they hadn't been paying their employees' pensions for a long time. But what did they do when they liquidated? They gave their executives bonuses on the way out the door. Workers are SOL. Executives get bonuses for shutting down the company and putting hundreds of thousands of people out of work.

Let's take a guess which side of the line you would be on had you worked for Hostess? Yet you defend the greed. For what?

Again.. How is that good for America?

[blaise]

Originally Posted by Fish

Unbelievable that you could defend that practice.

But you never answered the question. How is that type of capitalism making America better? Hostess just closed their business, and they hadn't been paying their employees' pensions for a long time. But what did they do when they liquidated? They gave their executives bonuses on the way out the door. Workers are SOL. Executives get bonuses for shutting down the company and putting hundreds of thousands of people out of work.

Let's take a guess which side of the line you would be on had you worked for Hostess? Yet you defend the greed. For what?

Again.. How is that good for America?

Defend what practice? Paying CEO's? It's called compensation.

[blaise]

Originally Posted by chiefzilla1501

People shouldn't defend CEOs. They are squeezing more work out of people for less pay and cutting back on employees, while doing nothing to cut back on their own pay. The fact that CEOs are making more money, while employees are making the same money for significantly more work is a problem. Secondly, it's ridiculous that CEOs are being compensated handsomely for failure. What's the point of a bonus anymore?

Problem #2. CEOs aren't investing back into their companies. This is the biggest problem in America. They could be investing more in R&D or new plants or new ventures, but they can't do that because executives are pocketing a disproportionate amount of wealth. It could be invested into technology to make the business more efficient. In marketing. Etc.... That's bullshit. These are executives. They didn't build their business, they earned the right to own it on behalf of the shareholders.

Problem #3. They get compensated for short-term performance. It doesn't matter if they create jobs 3 years from now. Just what they do today. So many are willing to cheat or create artificial results that damn us 3 years down the road. Here's a great example. To beat sales targets, you can raise commission to your sales team.

I work for a corporation. I love it and defend the private sector. But it is mind numbing that people on the right would defend executive compensation. It's getting out of control. They shouldn't be making more money while the economy tanks, nor should they have the power to squeeze a ton of work out of existing employees, nor should we applaud them for lining their pockets with more money as they cut jobs in an economy that really could use executives' support to get the overall economy going again. They are part of the problem, not the solution.

It's less about defending CEOs and more about not concerning myself with their bonuses.
Lack of ambition and laziness keep more Americans from realizing the American dream than any CEO has.
What's the problem with a corporation having profits? They don't have any obligation to hire more people than they need. That's like you getting a $500 bonus at your job and me telling you you have an obligation to hire landscapers.

[Fish]

Originally Posted by blaise

Defend what practice? Paying CEO's? It's called compensation.

Can't answer the question huh?

Understandable....