Here's a really important take on the jobs numbers from Felix Salmon. Click through and look at that second chart. It's corporate profits as a percent of GDP since the war.
It's right now nudging up to 11 percent. That's an all-time record. Look at how quicly corporate profits rebounded after the collapse--they were above 10 for the first time in history, shot down to 4.5 percent in 2009, and now are back up higher than they ever were. Let that sink in: record corporate profits. So why aren't they hiring? Take it away Felix:
To spell this out: high corporate profits and low levels of job growth are two sides of the same coin. If things were working properly right now, companies would take their excess revenues and use them to hire more people. Instead, they’re basically just letting those excess revenues sit on their balance sheets as cash because they’re scared to invest in themselves. It’s frankly pathetic.
The solution, as Salmon notes, is really simple:
The government can borrow at 1.45%: it should do so, in vast quantities, and invest that money back into the economy itself. Take a few hundred billion dollars and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, to provide some kind of safety net for the millions of Americans who have been out of work for more than a year. Even if the real long-term return on any stimulus package was zero, the nominal long-term return would be well over 1.45%, making the investment worthwhile.
But that's, like, the Planet Earth solution, one that normal earthlings would pursue. Here in Washington, we have Republicans to reckon with.
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