Reports from the Economic Front

a blog by Marty Hart-Landsberg

Dismal Trends

Officially our most recent recession began December 2007 and ended June 2009.  The following chart provides an important perspective on the recovery period.

1230-sub3-rattner-1

Stocks and profits have enjoyed a remarkable recovery.  While income is slightly up over the period, it is critical to remember that this is average income and the increase largely reflects gains for those at the very top of the income distribution.  Jobs and housing have yet to recover.

So, with returns to capital booming, it is easy to understand why business leaders are relatively content with current policies and, by extension, political leaders are reluctant to rock the boat.

Unfortunately, current policies are unlikely to do much to improve the job prospects or income of most workers.  In fact, the rise in business profits owes much to our depressed labor conditions.  Unless something dramatic happens, we can expect the next few years to look very much like the past few years.

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One response to “Dismal Trends

  1. Hans January 20, 2014 at 5:11 am

    If profits are going up this much, that means companies should have lots more money, right? And from the chart, it seems like the message is it is not going to the workers who work for those companies, right?

    If that is the case, I have to ask a very naive question. Where does it go? Is it paying off debts accrued during the bad times? Is it leaving the United States to pay off foreign debts or to buy foreign assets? Is it literally lining the pockets of the CEOs and board members? Is it going to luxury yacht makers and custom sports car developers? Is it sitting in company bank accounts because they don’t want to spend it?

    Where is this money?

    Like

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