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.

[blaise]

Originally Posted by Mr. Flopnuts

BOOM!

BOOM! what? A bunch of generic BS?

[HonestChieffan]

Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

[Brock]

Originally Posted by HonestChieffan

Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

WTF are you babbling about? They ARE laying off like crazy.

[|Zach|]

Originally Posted by blaise

No, my response isn't, "tough luck." You're the one suggesting the corporations in question here; the ones in the OP, are handling profits in an unethical manner. What specifically are you saying the corporations in question should spend that money on?

I'm not defending anything. You're the one making a judgement on their profits. If that's the case then state what they should be doing, specifically, with their money that they're currently keeping as profits.

Aside from general BS like, "put it back in the economy."

I don't generally disagree with you. Companies don't really "owe" anything. They are separate entities beholden to their own interests and not for the greater good.

But what all of this news does is make me continually roll my eyes at this narrative that the big bad business hating Obama administration is this killer of businesses...this free market hating monster that hates profits and...I don't know there is a lot of hyperbole it goes on from there.

Good businesses get praised for personal responsibility and being smart! Bad businesses get to blame Obama or the government for their own failures in the free market.

The free market can be a cruel bitch but the left always gets cast as the villain for some reason.

It is a troublesome thing to think about because I see both sides. I agree companies are free to do whatever is in their best interest because they have earned that...but Fish is damn right...we lay out the red carpet for them...our municipalities bend over backwards for them (a lot of times at their own peril) and everyones return for that has been a shit sandwich.

[Taco John]

It's really simple. Businesses have cut all the fat they possibly could. Doing this has streamlined their businesses and made their margins really good. Now the question is about reinvesting - how do you keep the good margins while re-investing and growing your business. Like it or not, businesses do not feel good about reinvesting under an Obama administration. The perception, whether you agree or not, is that it is much higher risk because of the amount of overhead that is involved now with such things as Obamacare. So, instead, businesses are prioritizing on how to deal with the new regulations BEFORE they reinvest. This means finding out where they can cut more, and find new efficiencies. We're probably looking at a two year cycle here as they adjust. After that two year cycle, I think we'll start to see some businesses have built up enough comfort in the new environment to start to hire again. I don't think it will be gang busters, by any stretch. It'll be a trickle. There's not a lot of room for error when you have regulations like Obamacare sitting on your margins. The comeback will be cautious.

[scott free]

Originally Posted by HonestChieffan

Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

Well, if the All Holy Stockholders dont care what their big profits do to the buying/creating power of their own country, selling out to the cheapest bidder at every turn, hoping the megarich will spread their crumbs around this country, not dodging taxes at every turn and raising their already generous personal benefits, then **** them AND their beloved shareholders.

As blaise said "they have no obligation to employ the American workforce"... welp, yeah... WHO NEEDS AMERICA ANYWAY, I HAVE BIG MONEY!

[Taco John]

Originally Posted by scott free

Well, if the All Holy Stockholders dont care what their big profits do to the buying/creating power of their own country, selling out to the cheapest bidder at every turn, hoping the megarich will spread their crumbs around this country, not dodging taxes at every turn and raising their already generous personal benefits, then **** them AND their beloved shareholders.

As blaise said "they have no obligation to employ the American workforce"... welp, yeah... WHO NEEDS AMERICA ANYWAY, I HAVE BIG MONEY!

I wonder what you think you accomplish for your argument when you say things like "all holy stockholders."

You're talking about American people. You're talking about their mutual bonds. Their pensions. Their 401Ks. Their retirement plans. And you're telling them to F*** off? You clearly don't have any grasp of the subject. You're like the proverbial blind man with one hand on the elephant.

[scott free]

Originally Posted by Taco John

I wonder what you think you accomplish for your argument when you say things like "all holy stockholders."

You're talking about American people. You're talking about their mutual bonds. Their pensions. Their 401Ks. Their retirement plans. And you're telling them to F*** off? You clearly don't have any grasp of the subject. You're like the proverbial blind man with one hand on the elephant.

As long as china can do it cheaper, i'm in.

You go, ayn rand fan.

[Taco John]

whatever that means...

[chiefzilla1501]

Originally Posted by Taco John

It's really simple. Businesses have cut all the fat they possibly could. Doing this has streamlined their businesses and made their margins really good. Now the question is about reinvesting - how do you keep the good margins while re-investing and growing your business. Like it or not, businesses do not feel good about reinvesting under an Obama administration. The perception, whether you agree or not, is that it is much higher risk because of the amount of overhead that is involved now with such things as Obamacare. So, instead, businesses are prioritizing on how to deal with the new regulations BEFORE they reinvest. This means finding out where they can cut more, and find new efficiencies. We're probably looking at a two year cycle here as they adjust. After that two year cycle, I think we'll start to see some businesses have built up enough comfort in the new environment to start to hire again. I don't think it will be gang busters, by any stretch. It'll be a trickle. There's not a lot of room for error when you have regulations like Obamacare sitting on your margins. The comeback will be cautious.

You are oversimplifying. Big time.

This isn't hard to understand. Executives are hoarding cash. They're cutting back workers, scaling back costs, NOT re-investing back into the company, yet are themselves making much more money.

When executive compensation goes up, that cuts back their margins.

Yes, I agree with curbing regulation and I don't agree with Obamacare. But let's stop using that as an excuse. If corporations were truly worried about cutting back costs, they'd not only cut back on their company, but at least keep executive compensation flat.

[chiefzilla1501]

Originally Posted by |Zach|

I don't generally disagree with you. Companies don't really "owe" anything. They are separate entities beholden to their own interests and not for the greater good.

But what all of this news does is make me continually roll my eyes at this narrative that the big bad business hating Obama administration is this killer of businesses...this free market hating monster that hates profits and...I don't know there is a lot of hyperbole it goes on from there.

Good businesses get praised for personal responsibility and being smart! Bad businesses get to blame Obama or the government for their own failures in the free market.

The free market can be a cruel bitch but the left always gets cast as the villain for some reason.

It is a troublesome thing to think about because I see both sides. I agree companies are free to do whatever is in their best interest because they have earned that...but Fish is damn right...we lay out the red carpet for them...our municipalities bend over backwards for them (a lot of times at their own peril) and everyones return for that has been a shit sandwich.

Obama is a killer of businesses. Moreso on the small business side, but a killer nonetheless. The private sector is doing okay in spite of Obama. But that doesn't mean we should make excuses for corporate greed, as we do in this thread.

[Xanathol]

To the OP, why are you surprised by this? Some of the largest corporations in America backed Obama during his first campaign. As per Banking On Becoming President:

University of California 	$1,648,685
Goldman Sachs 	$1,013,091
Harvard University 	$878,164
Microsoft Corp 	$852,167
Google Inc 	$814,540
JPMorgan Chase & Co 	$808,799
Citigroup Inc 	$736,771
Time Warner 	$624,618
Sidley Austin LLP 	$600,298
Stanford University 	$595,716
National Amusements Inc 	$563,798
WilmerHale LLP 	$550,668
Columbia University 	$547,852
Skadden, Arps et al 	$543,539
UBS AG 	$532,674
IBM Corp 	$532,372
General Electric 	$529,855
US Government 	$513,308
Morgan Stanley 	$512,232
Latham & Watkins 	$503,295

The question you need to ask yourself is "if these are the big bad greedy corporations and they are backing Obama, then is Obama really for the people or for the big bad businesses?" You can't have it both ways - either the "greedy corporations" are actually humanitarians or Obama is full of crap when he says he is against big business and for the people.

[Radar Chief]

Originally Posted by Fish

The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

So I take it you have your paycheck signed for and handed to you by a poor person?
If corporations get blame for the recession do they also get credit for the massive, record setting expansion that preceded it?

[Radar Chief]

Originally Posted by Mr. Flopnuts

BOOM!

More like fizzle plop.
But I understand ranting about the corporate boogeyman sells in today's political climate.

[chiefzilla1501]

Originally Posted by Radar Chief

So I take it you have your paycheck signed for and handed to you by a poor person?
If corporations get blame for the recession do they also get credit for the massive, record setting expansion that preceded it?

Somewhere along the line, executives lost themselves. They no longer serve their shareholders or act in the best interest of the corporation they work for. They are more interested in serving their own self-interest. The former expansion has a lot to do with opening up global markets (political decision), significant de-regulation which inspired wildly unethical practices that contributed to the massive economic collapse, and a massive tech boom as the world became more digital. No, not all corporations were bad during this time, but the bad ones massively contributed to the economic downturn.

Guys, this isn't rocket science. Corporations are laying off workers and our economy is in a massive recession, yet executive paychecks are going up.

I love the private sector and corporations. But good god, you can support corporations and not be blind to how wildly out of control executive compensation has become.