Blog on the Run: Reloaded

Sunday, August 22, 2010 9:43 pm

Not exactly a noted economist …


… but Michael Moore (yeah, I know, he’s fat) has put his finger on something deeply disturbing:

During the first half of 2010, GM made $2.2 billion in profit, yet according to The Wall Street Journal, they’ve only added 2,000 jobs in all of North America, taking their workforce from 113,000 to 115,000.

And what’s true for GM is true for the country. The government stepped in with trillions of dollars in cash and guarantees to keep Corporate America from collapsing due to its own stupidity, short-sightedness and greed. And it worked — for Corporate America. You may not have noticed as you were being foreclosed on, but the profitability of the Fortune 500 is almost back to normal. It jumped to $391 billion in 2009, up 335 percent from 2008. And the 500 biggest non-financial corporations are now sitting on $1.8 trillion in cash, more than at any time in the past 50 years. …

To understand what’s happening, we have to focus on the bottom line, just like they do. And what the bottom line says is that the entire business world has figured out how to make huge buckets of money without hiring us to work for them. I’m not sure how in the long run this benefits these companies. Maybe the same robots who make most things now are also programmed to buy them?

But the upshot is this: We have to face the fact that most of America’s CEOs don’t want the economy to get “better.” Because for them, it couldn’t get better — they’ve got profit coming out their ears, while with 9.5 percent unemployment their entire workforce is too scared to ask for a 25 cent-an-hour raise. They’d be happy to have things stay just like they are now. Forever.

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