Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased$121.4 billion in the third quarter, compared with an increase of $267.8 billion in the second quarter (table 10). Profits of domestic financial corporations increased $13.7 billion in the third quarter, compared with an increase of $52.8 billion in the second quarter. Profits of domestic nonfinancial corporations increased $67.5 billion, compared with an increase of $221.3 billion. Rest-of-the-world profits increased $40.1 billion, in contrast to a decrease of $6.2 billion. In the third quarter, receipts increased $43.1 billion, and payments increased $3.0 billion.And those increases in profits are on top of the record that was set in Q2. this other headline from today.
U.S. consumer sentiment plunged in early November to the lowest level in a decade as surging inflation cut into households' living standards, with few believing policymakers are taking sufficient steps to mitigate the issue, a widely followed survey published on Friday showed. The University of Michigan's Consumer Sentiment Index plunged to 66.8 in its preliminary November reading from October's final reading of 71.7. That was the lowest level since November 2011 and was far short of the median estimate among economists of 72.4 in a Reuters poll.I think two things when I see that. 1. I think a lot of this inflation fear is GOPperganda-generated garbage. As a small example, the “skyrocketing gas prices” theme doesn’t match up with what I was paying at the pump on Tuesday. wages kept growing and consumers boosted their spending well above the rate of inflation in October. With unemployment claims plummeting and job growth continuing, the typical American is keeping up with their bills, so whatever increase in inflation exists isn’t hurting people’s ability to get by. At least not yet. 2. My other thought has to do with the record profits. A 20% increase in corporate profits might explain some of that consumer inflation, eh? And since we have financial and taxation systems that rewards profits over investment, there is a bigger payoff to this type of profiteering.
The Real Inflation Problem Is Corporate Profiteering https://t.co/vqLo2d3Jwv— Faiz (@fshakir) November 22, 2021
What all these arguments miss is that, despite whatever rising costs exist for raw materials or transportation or other underlying factors, the incontestable truth is profits are way up for the largest corporations in America. And what that means is pretty simple: Corporate America has seized on the fears of inflation to jack up prices on you and make a ton more money. According to The Wall Street Journal, nearly two out of three of the biggest U.S. publicly traded companies had larger profit margins this year than they did in 2019, prior to the pandemic. Not just profits. Larger profits. Nearly 100 of these massive corporations report profits in 2021 that are 50 percent above profit margins from 2019. CEOs are quick to suggest to media that they have been forced to raise prices because of one difficulty or another. However, my organization More Perfect Union reviewed recent corporate earnings calls featuring CEOs of some of the largest companies in the world, like Tyson Foods, Kellogg’s, Pepsi, Mondelez (a huge snack food and beverage company that used to be known as Kraft), and others. And we found jubilant executives revealing that price hikes are great for business.Sure seems like something to amplify and investigate, don’t you think? And maybe some of the incentive to hoard profits over making stuff needs to be taken away. Among other ways, this can be done by increasing competition for services via Build Back Better and other reforms, or flat-out higher taxes and penalties on companies who clearly take advantage of a slanted, monopolistic situation. And if I was a Dem running for office in 2022, I’d sure be hammering the fact that corporations are doing the best they have ever done, while many Americans feel concern over whether they can keep up with prices that have been raised by those same profiteering corporations. Even if the public's “concern” about inflation affecting the economy is mostly BS, the concerns about corporate control over prices and production shouldn’t be. And that’s where our fear and anger should be redirected to.