“Recessions are for the little people,” said Bob Herbert in The New York Times. While most Americans are still struggling to make ends meet or looking for jobs that aren’t materializing, U.S. corporations just logged “their most profitable quarter ever”—with a staggering $1.659 trillion in profits. The key to corporate America’s record gains is “increased productivity,” said Steven Syre in The Boston Globe. Translation: Fewer workers are working harder for less money. Sooner or later, one would think, all the money sloshing around the nation’s corporate headquarters would prompt businesses to start hiring again. But “the disconnect between profits and jobs seems more startling than ever.”
The jobs are on their way, said Kathleen Madigan in The Wall Street Journal. Let’s not forget what we just went through—the deepest recession in half a century. It was inevitable that the recovery would be tentative at first; in past recessions, big jobs gains lagged the recovery by 18 months. “It’s easy to be sickened by the garish gap between corporate profits and unemployment,” said Derek Thompson in TheAtlantic.com. But to hire the millions of people now looking for work, shell-shocked corporations “need money. Lots of money.” Once consumer spending rebounds and businesses re-establish a “dependable flow of income,” they’ll start hiring again.
That might be true if it were ordinary businesses posting these record profits, said Robert Scheer in The Nation. But of the $44.4 billion increase in corporate profits this quarter, “a whopping $33.3 billion” went to Wall Street banks and investment houses. These are the very same towers of greed that caused the financial crisis in the first place—and then got bailed out with taxpayers’ dollars. Banks used to make their money by lending to other businesses and to consumers, thus stimulating economic growth, said John Cassidy in The New Yorker. But since the banks discovered they could make billions exploiting complex security trading, “day-to-day movements in the markets,” and other financial schemes, they’ve lost interest in traditional loans. And despite Washington’s efforts at “reform,” Wall Street’s “great money-making machine” is back to its old tricks. So don’t be surprised if profits and bankers’ incomes continue to soar—and very little of it trickles down to everybody else.