US corporations shatter profit records

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Thanksgiving in America
US corporations shatter profit records
25 November 2010

US corporations took in $1.659 trillion in the third quarter, breaking records
going back 60 years, according to a Commerce Department report released Tuesday.
It was the seventh consecutive quarter of profit growth at “some of the fastest
rates in history” according to the New York Times.

If any more proof were needed, the third quarter profit record exposes the lie
promoted by Democrats and Republicans alike that only the “free market” and
private businesses can reverse the nation’s 9.6 percent unemployment rate. The
corporations and banks are sitting on a cash horde in the trillions of dollars.
This money is not being used to hire workers, but to line the pockets of the
executives and top shareholders.

The profit bonanza that lasted from July through September eclipsed the old
record of $1.655 trillion established in the third quarter of 2006—just as the
money-mad speculation of the financial elite was hurtling the US and world
economy toward the precipice of its worst economic crisis since the Great
Depression.

The resulting financial crisis, which erupted in the autumn of 2008, threatened
a total collapse of the global financial system. In response, the governments of
the world, led by the US, used the disaster to hand over tens of trillions in
public wealth to the very finance houses that triggered the crisis. This process
continues, as demonstrated by the International Monetary Fund/European
Union-dictated rescue of the Irish banks this week.

The enormous profit realized by US corporations in the third quarter are only
the latest indication that the Bush-Obama bailout of the financial and corporate
elite has achieved its desired aim of protecting the personal fortunes of the rich:

*Annual bonuses rose by 11 percent for executives at the 450 largest US
corporations last fiscal year, according to a recent survey published by the
Wall Street Journal. Overall, median compensation—including salaries, bonuses,
stocks, options and other incentives—rose by three percent to $7.3 million in
2009. Shareholder returns increased by 29 percent.

*An October survey by the Wall Street Journal found that employees at 35 of the
biggest banks, investment banks, hedge funds, money management firms, and
securities exchanges will be paid a record $144 billion in 2010.

*According to Forbes magazine, the net worth of the 400 richest Americans
increased by 8 percent in 2010, to $1.37 trillion, more than the GDP of India,
population 1.2 billion.

These vast fortunes have been made possible through the impoverishment of the
working class, the vast majority of the population that must work in order to
maintain itself.

*In 2009, 15 percent of all US households, about 50 million people, went part or
all of the year without enough food to eat, according to a recent report from
the US Department of Agriculture (USDA). More than a third of these households,
home to one million children, went without meals on a regular basis.

*A record 49.9 million US adults went without health insurance for at least part
of the past year, up from 46 million in 2008, according to a recent report from
the Centers for Disease Control and Prevention (CDC). The uninsured now
constitute 26.2 percent of the total adult population, more than one in four, up
from 24.5 percent two years ago.

*Average annual wages for US workers fell by $457 in 2009, and the median annual
wage fell by $247 to $26,261, according to recently updated data from the Social
Security Administration (SSA).

*The US Census Bureau found that about 44 million Americans were living in
poverty in 2009, the highest number on record and an increase of 3.8 million in
one year. Nearly 19 million Americans were living in extreme poverty in 2009,
defined as half of the official poverty level, an increase of 11 percent in one
year.

This sampling—many similar statistics could be cited—paints a portrait of a
financial oligarchy literally gorging itself at the expense of the population.
Yet this reality, which permeates every aspect of life in the US, has only
whetted the appetite of the elite and its political servants.

The holiday season finds the lame duck 111th Congress putting the finishing
touches on two years of wealth redistribution to the rich. It is almost certain
to extend Bush-era income tax cuts for the richest Americans.

On November 30, five days after the Thanksgiving holiday, unemployment benefits
will expire for 1.2 million workers due to Congressional inaction. By Christmas
and the New Year, this figure will swell to 2 million. The fate of these workers
and the several million children who depend on them, tossed out without cash
income into the worst job market in seven decades, is of little consequence to
the millionaires and multi-millionaires who populate Congress.

One result of these policies is that more people than ever, including those with
jobs, are forced to turn to soup kitchens, even on a day when families
traditionally gather for a holiday associated with the “bountiful harvest.”
Charities across the country are reporting record demand for help on
Thanksgiving—a holiday established at a national level by Abraham Lincoln in
1863 to honor the material abundance of the Republic, even in the midst of the
Civil War.

On the other side of the social divide is an uninhibited orgy of greed,
documented most recently by a Wednesday story in the New York Times (“Signs of
Swagger, Wallets out, Wall Street Celebrates.”) From cosmetic plastic surgery to
high-priced art auctions, from rental properties in the Hamptons to bachelor
parties that cost tens of thousands of dollars, “Wall Street’s moneyed elite are
breathing easier again,” the article states.

The stranglehold over society and the economy exercised by this parasitic social
layer, this modern-day aristocracy, must be broken once and for all.

Tom Eley

http://wsws.org/articles/2010/nov2010/pers-n25.shtml

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