If you don’t think this country has turned into a corporate fascist oligarchy, just look at the S&P 500 earnings chart below. Even though real median household income is at 1989 levels, real median net worth is 40% below 2007 levels, food and energy prices have risen,the percentage of the population working is at 1978 levels, the number of people on food stamps tops 46 million, and total debt to GDP exceeds 350%, somehow the profits of the 500 largest companies in America are at record highs.
Janet Yellen can pontificate about the ignorant masses saving more money for their future, but she and her Federal Reserve cronies are the reason for this dysfunctional, corrupt corporatocracy run by and for the benefit of bankers and corporate executives. Zero interest rates, printing over $3 trillion and handing it to their owner banks, and rigging the financial markets for their friends has gutted our economy and left the middle class dying on thr side of the road.
The biggest corporations in America haven’t expanded their profits by growing their businesses. They’ve done it through financial engineering, low interest debt, firing workers, and keeping wages below the level of inflation. These earnings are an illusion built upon easy money from the Fed. There has been no real recovery in the real world. If you think the collapse in earnings in 2009 was epic, you ain’t seen nothing yet.
With Q3 earnings season well underway, today’s chart provides some long-term perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today’s chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low which brought inflation-adjusted earnings to near Great Depression lows. Since its Q1 2009 low, S&P 500 earnings have surged to all-time record highs. To further illustrate the significance of the current corporate earnings recovery, consider that the run-up in real earnings from Great Depression lows to credit bubble peak took over 74 years. The run-up from financial crisis lows to today has been similar in magnitude (actually slightly more) but was accomplished in a mere five years. Over the past six months, however, the upward trend in corporate earnings has slowed but continues to make new all-time record highs.
Wow Admin,
After my cozy little 1 hour and 55 minute 34 mile commute up route 128 this morning that was a real pick me up. I think I am ready for another cup of coffee. It does make me wonder as it does several people in our office, with the economy clearly on the down trend in so many industries why does traffic seem to be historically bad, at least around here.
Bob.
I call bullishit. WHEN WHEN WHEN WHEN dammit?
Real Hourly Wages Drop In September, Fail To Rise In 6 Of Past 7 Months
Submitted by Tyler Durden on 10/22/2014 09:15 -0400
One of the greatest misconceptions plaguing modern economics is that just because there is broad inflation (real, not hedonic, seasonally-adjusted or a burst in Saudi Arabia dumping crude to pressure a Russian default), then nominal, and real, wages also have to increase.
The problem is that without the latter, there can be no actual economic recovery, and instead one ends with stagflation, something Japan is acutely experiencing right now.
Another problem: with nearly one hundred million people out of the labor force, and epic slack within the workforce, there is virtually no amount of inflation in this environment that can force corporations to not only stop firing people (see M&A bubble) but actually hike their pay (except of course for BTFD “traders” at major hedge funds and bank prop desks).
And just to confirm this, alongside the CPI data released earlier which showed the smallest possible broad price increase, when considering that previously the BLS reported flat nominal hourly wages in September, it implied that real wages declined once again. Sure enough, in a separate report today, the BLS announced that real average hourly earnings (in constant 1982-1984 dollars) declined once again, this time from $10.34 to $10.32, a -0.2% drop from past month.
This also means that since March, there has been just one month in which real hourly wages have increased, and that was mostly due to the outright deflationary print the BLS reported last month.
As for the flipside, there have now been 5 outright decreases in real hour wages since March of this year.
Admin,
Stop trying to cheer me up.
Bob.
When I read what yellen or obama or any talking douche bag has to say, one recurring theme comes back time and again.
If only we would only spend more on education, infrastructure, government, if we would only spend more on consumer goods, if only we would start more business’s, pay more taxes, if we would only save more money.
It’s our fault.
What do they call someone who blames the victim? Nothing will change, these people think with two different heads, one for them and one for the rest of “us”
And they have no problem justifying “their” actions.
And there ain’t nuthin’ gonna change that…………
This is not your ordinary recession or depression that we can ‘work ourselves out of’. Rather the current situation has been created by fate, large scale theft, large scale lies, large scale economic manipulation, and political corruption.
The only positive action would be to tear down the current structure – which ain’t gonna happen. There’s too many FSA / SNAP / SSDI / AFDC / WIC / Section 8 / General Assistance who want this cluster fuck to continue. Add to that the disconnected morons with their iCrap / Video Games / Fantasy Football / NFL / Sportz in general .
I’d guess we have more than 60% of the population who doesn’t care, or wants it to continue so they get more free shit.
We’re screwed until the real hard collapse happens.
When I think about E=MC2 , Klibers Law, and what an economy really is from a physics point of view it’s mind blowing.
As you might know Klibers law is a power law proportionality between the Mass of an organism and it’s Energy usage.
As humans we had to conserve energy in one domain to use it in other higher energy domain of evolving a bigger brain. That is the size of our intestines shrunk in Mass to support a larger brain with higher Energy requirements.
When you think about what’s happened with the advancement in agriculture and industrial production. Not only was this standard of living level not possible without the discovery of oil but not possible without Energy conservation as well.
In an odd sort of way , lower birth rates in the Western World contributed to Energy conservation by making food less scarce then it would be otherwise. And labor made industrial production more efficient.
I personally, think in the absence of nuclear power the Global economy is at limit. Which is something the free trade Ricardian Comparative Advantage never contemplated. And given that , we have entered a period of Zero Sum Game.
A Zero Sum Game is Klibers Law. Something had to give. Likewise , when you increase your population or decrease overall energy production something will have to give.
The fact is when you look at the Great Recession , the 2 resources that have gone up in price double, Are not only on the low tier of Maslows hierarchy of needs but the very essence of need which is Energy.
Something to think about.
Mark, I miss some of the connection that you are trying to make.
I Wikipedia Kleiber’s law and I see it is a little over my head. — “Metabolic rate was expressed in energy per unit time, specifically calories per second. Two thirds expressed the relation of the square of the radius to the cube of the radius of a sphere, with the volume of the sphere increasing faster than the surface area, with increases in radius.” duh! Say what???
But thanks, never the less.
I always thought that the size and weight of the dinosaurs was only possible because gravity was less in those days. Oh, well.
Homer,
The mathematical power law is not important. just making an analogy between the relationship between Mass and Energy that all biological organisms are subject to.
Humans are believed to have evolved big brains through hunting. We had to have a more dense energy source to compensate for smaller intestines. The smaller mass of intestines to economize for a larger higher metabolic brain.
The moral is there is no free lunch .
Mark, you could just eat more often. ‘Course maybe eating 24/7 wouldn’t provide enough calories.
The Power Law is very important and supports a relationship in living organisms. They seem to follow the Power Law.
I read a book about Chaos Theory (Complexity Theory). It was about the early development of this theory.
A group of scientists hosted a discussion group at Los Alamos, NM bringing in academia from all over the US. The power law seemed to fit in with computers and living organisms. I got to dig the book out.
Good luck with that Homer, you’re so disorganized you’ll never find it Ya, you can say that again!