1) Corporate profit margins are at
an all-time high. Companies are making more per dollar of sales than
they ever have before. (And some people are still saying that companies are
suffering from "too much regulation" and "too many taxes." Maybe little
companies are, but big ones certainly aren't. What they're suffering from is a
myopic obsession with short-term profits at the expense of long-term value
2 ) Wages as a percent of the
economy are at an all-time low. Why are corporate profits so high? One
reason is that companies are paying employees less than they ever have as a
share of GDP. And that, in turn, is one reason the economy is so weak: Those
"wages" represent spending power for consumers. And consumer spending is
"revenue" for other companies. So the profit obsession is actually starving the
rest of the economy of revenue growth.
3) Fewer Americans are working than
at any time in the past three decades. The other reason corporations
are so profitable is that they don't employ as many Americans as they used to.
As a result, the employment-to-population ratio has collapsed. We're back at
1980s levels now.