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Catch 22


© Ed Stein

The economy is stuck in a weird Catch-22 right now. Corporate profits are soaring and businesses are sitting on mountains of cash. Historically, when business profits go up, workers share in the bounty; they get raises and more workers are hired. Not this time. Businesses want to see the economy to turn around before they’re willing to add employees, and consumers are afraid to spend more money until they see businesses putting people to work.

Or maybe they don’t want the economy to improve until after the election? Is it just me, or am I getting paranoid?

UPDATE: I guess I’m not the only person who is becoming paranoid:


© Bruce Beattie

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6 Comments

  1. ebdoug wrote:

    Not You: It is called “Wealth Distribution” We have one of the greatest gap in Wealth than most countries. Anyone clearing 1 mil during Bush and until we rescind the Tax Cuts to the rich, was handed 100,000 by Bush. Lots of people would like to live on that. The $100,000 created jobs. In Mexico, China, India, etc. With no jobs and no income, people can’t spend. This is what Rove wants. Being an uneducated Bore, he doesn’t realize the consequenses. He is one of those greedies who doesn’t care what happens to his son’s generation.
    I had a Tee shirt made:
    Vote for Job Loss
    800,000
    Vote for the rich to be richer
    Vote for the middle class to be poor
    Vote Republican

    And as you can see Blanche Lincoln is the old time Southern Democrat who are now the Greedie Republicans. She wants to extend tax cuts for the rich.

    Sunday, October 10, 2010 at 5:58 am | Permalink
  2. Jonah wrote:

    A classic byproduct of capitalism. Companies lay workers off to get higher profits to get the share price higher to keep shareholders happy. That is the only way they can make profits until US consumers finish deleveraging and pay off a reasonable portion of their debts. I feel the only way to increase demand by consumers is for the government to spend money and create temporary jobs for those consumers. The only snag is there’s huge resistance by the republicans and now even by some nervous democrats.

    A smart CEO will know that there is no way out of this through lower taxes alone though I’m sure the chamber of commerce prefers a huge dem loss and they may doing what they can to enable that.

    Sunday, October 10, 2010 at 7:33 am | Permalink
  3. Patricia Andrews wrote:

    I may be paranoid too, but I have felt that this is, in fact, a “wait until we get the Repubs back in before we hire” ploy!

    Sunday, October 10, 2010 at 1:54 pm | Permalink
  4. Seems like a good strategy: drive the economy into the shitter and blame it on the Democrats, keep doing it until Republicans take office again (and then keep doing it because by then they’ll have forgotten that they ever intended to stop or they’ll have all new reasons.)

    Sunday, October 10, 2010 at 7:21 pm | Permalink
  5. Jonah wrote:

    Somewhat related to the economy. LOL at what shelby said. Obviously he and other republicans are more qualified on the economy than renowned scientists and economists.

    “”While the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors of the Federal Reserve System,” Shelby said.”

    http://www.reuters.com/article/idUSTRE69A4NB20101011

    Monday, October 11, 2010 at 3:20 pm | Permalink
  6. curmudgeon wrote:

    But I read HERE last spring that the economy WAS improving!

    Riiiight. Companies are not hiring because they care so much about politics. That’s why the economy went to hell under Clinton.

    No, wait…

    Paranoid may not be the word you’re looking for ;)

    Monday, October 11, 2010 at 10:49 pm | Permalink

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  1. Political Irony › The Last Two Workers in the US on Monday, October 18, 2010 at 9:43 pm

    [...] hiring until demand picks up, and consumers won’t start buying until they have jobs, then this scenario doesn’t seem to be that far fetched. Please Share / Save  If you liked this, you might [...]