More Profits, Fewer Jobs

I don't have time for a post tomorrow so I thought that I would send along an excellent article in Slate Magazine on why US companies are awash in profits and cash and yet the unemployment rate remains high. See:

More Profits, Fewer Jobs
By Annie Lowrey
http://www.slate.com/id/2289619?wpisrc=sl_ipad

Not covered in the article is the fact that the US stock markets (Dow, S&P, Nasdaq) continue to be strong while other economic fundaments are in the toilet. Consumer demand is down, unemployment is high, the housing market is at an all time low and many of the states are virtually bankrupt. One answer may be that the US has steadfastly kept a lid on its currency thereby making American goods a bargain abroad. Most of the companies cited in this article have a very strong ex-American presence. Also what is not covered in this article (but covered generally in the financial press) is that these profits are generating few tax dollars for the US treasury. GE, for example, had $1B in profits but will pay no tax in the US due to loss carry forwards suffered in the down years. Would I bet on the Dow? Not yet.

Bernie