Monday, November 14, 2011

Ayn Rand

National Public Radio, on the influence of Ayn Rand on current politics.

Excerpting one instance from there:
Recently, House Speaker John Boehner channeled Rand when he said, "Job creators in America basically are on strike."
This idea that Boehner put forth in a recent speech before the Economic Club of Washington, D.C., could have come straight from Atlas Shrugged.

Businesses, Boehner said, need to be set free. Instead, "they've been antagonized by a government that favors bureaucrats over market-based solutions. They've been demoralized by a government that causes despair, when what we really need is to provide reassurance and inspire hope in our economy."
Boehner uses the language of slavery when he says, "We need to liberate our economy from the shackles of Washington."
The problem with Boehner's (and all the other examples in the NPR piece) is that corporations are doing very well.

In other news, the latest figures for corporate profits
Corporate profits in the second quarter grew to $1.467 trillion annualized-up from $1.455 trillion in the fourth quarter (previously $1.476 trillion). Today's report includes annual revisions. Profits in the second quarter rose an annualized 3.3 percent, following a 39.9 percent surge the quarter before (previously 35.2). The upward revision to the first quarter is due to a downward revision to the fourth quarter. Profits are after tax but without inventory valuation and capital consumption adjustments. Corporate profits are unchanged on a year-on-year basis, compared to up 2.8 percent in the first quarter. Growth in profits is extremely volatile over recession/recovery periods and is slowing from the spike in late 2009 and early 2010. The recent peak in year-ago growth was 115.9 percent for the fourth quarter of 2009. 
The new figures indicate that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded. The previous peak, of 13.6 percent, was set in 1942 when the need for war materials filled the order books of companies at the same time as the government imposed wage and price controls, holding down the costs companies had to pay.
There have been 10 years when corporate profits as a share of national income exceeded 13 percent — 1941, ’42, ’43, ’50, ’51, ’55, ’65, ’66, 2006 and 2010. In eight of those years, the economy, as measured by real gross national product, grew at a rate of greater than 6 percent.

The exceptions were 2006, when real growth was just 2.7 percent, and 2010, when it was 3 percent.