Why are corporate profits up? Why is Sarah Palin smart? Why is Chuck Schumer worried?
Let’s solve more mysteries. Earlier this week we took note of several mysteries such as why the Dow Jones is up while volume is down. Today we easily solve the mystery of why corporate profits are up. The CNN money unit reports this:
“The long-awaited recovery is now under way, but it’s a slow, painful slog that’s short on animal spirits and long on a drumbeat of numbers that mostly shift from dreadful to less depressing.
Twenty-seven months after the recession began, unemployment is stuck at 9.7%. Housing starts are dragging near half-century lows. Consumers are finally spending again, but they’re still too fearful about their jobs and homes to crowd malls and auto lots with the buoyant abandon that heralds a full-rigged revival, the kind Americans are used to.
Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that’s largely escaping notice. The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits. [snip]
Hence, the 500’s profits virtually returned to normal after years of extremes — bubbles in 2006 and 2007, collapse in 2008 — despite a feeble overall recovery that’s far from normal.”
Falling from the Fortune 500 list of top companies by revenue are manufacturers and home builders (from 14 companies listed in 2007 down to 0 today). Health care companies in 2009 took 9 spots on the list. GM is no longer in the top ten and even energy companies are drifting down. But the big mystery is why, or rather how, “the Fortune 500 managed that jump in earnings when the number that usually pulls profits up or down — revenues — dropped sharply?” The answer:
“The crucial reductions came in the item accounting for two-thirds of their costs: labor. In 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history — almost 3.2% of its payroll. By mid-2009, companies were making fewer goods with far fewer workers.
A pivotal turn began midyear. Sales bottomed, then began to rise gently, as headcounts continued falling. “The largest part of the gain came from lower payrolls rather than the sluggish rise in sales, but they both contributed,” says Dirk van Dijk of Zacks Equity Research. The result was a wondrous surge in productivity, defined as the hours needed to make a bicycle, a PC, or a ton of insulation.
At the same time, wages rose only slightly. So for all of U.S. industry, the labor costs of creating a good or service — a measure known as unit labor costs — fell by 4.6%, according to the U.S. Department of Labor. That’s the sharpest drop in postwar history.
As sales started rising in the second half of 2009, all of the extra revenues and cost reductions fell to the bottom line. Today employers are maintaining the super-low cost regimes they imposed during the crisis while the economy is finally growing. That explains the explosion in Fortune 500 profits.”
Get rid of your workers, the people that should buy your products, and you make a profit on paper. You won’t see Henry Waxman investigate this. Waxman jumped on companies because legally required disclosures on health costs mocked the euphoria of Dimocrats on their health scam. Waxman threatened hearings to intimidate the corporations that followed the law. Waxman won’t call hearings on jobless workers and the solved mystery of corporate profits.
Toymaker Mattel cut 10% of employees along with other cost cutting measures. This resulted in a cost cut of $669 million which more than offset the $487 million revenue drop. Mattel did what it had to do to survive – something American governments will fail to do. The workers won’t be able to afford the products in the same way the citizens will soon not be able to afford their myriad levels of government.
And for those that doubt our label “Obama health scam” there’s this:
“The star of 2009 is undoubtedly health care. The sector’s earnings jumped to an all-time high of $92 billion, placing it second behind tech at $94 billion. Health-care earnings rose by $23 billion, or 33%. It wasn’t the band of new arrivals that accounted for most of the bounty, but extremely strong earnings from two groups, one surprising — medical insurers — and the other more predictable, pharmaceuticals.”
Don’t hold your breath waiting for a Henry Waxman investigation of strong earnings from insurers and pharmaceuticals. These companies also cut cost and “they raised premiums”. Henry, where’s the investigation? Look at what’s happening because of the Obama health scam:
“For the carriers, stringent state regulations tend to dampen price competition, giving them latitude to increase prices — a pattern that’s now causing a political uproar. The insurers are losing employee customers as small companies drop their plans and layoffs rise. But they’re partly compensating by booking new customers from Medicaid, the federal and state program for the poor, and Medicare Advantage, a plan that allows seniors to choose private insurance. That business, along with cuts in interest expense, helped UnitedHealth lift its sales by 7% and its profits far more, by 28%, to $3.8 billion.
For the drug industry, it’s as if the recession never happened.”
You betcha the recession never happened for those Obama cut deals with and can raise prices at will thanks to Rezko Obama. You can almost see the job openings for Michelle.
Don’t expect Waxman hearings or public inquiries into today’s Securities and Exchange Commission charges of “fraud” against Goldman Sachs either. Friday announcements are meant to be buried, not publicized.
Corporate profits mystery solved.
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Why is Sarah Palin smart?
When we last posted a video of Sarah Palin at a Boston Tea Party we missed a very smart gesture on her part.
Big Pink readers will recall our regular advice to Republicans to employ a powerful, but secret, weapon when discussing Barack Obama. Time after time the one reliable Republican who takes our advice is Sarah Palin. We are sure Hillary Clinton and Sarah Palin will someday, when the time is right sit down together. They’ll get together and have a “cup of coffee” as Palin described it, or perhaps a cup of Tea.”
So even though we missed it on first viewing, we are not surprised that Sarah Palin said this when she was in Boston:
“The voters are coming. Now, we’ve all learned a lot of lessons, I think, this past year. I don’t want anybody to feel bad if they had supported some of those on the Left in that last election. Because how would a lot of folks have known? We had a complicit media that did not do its job completely. Some tried, but some did not. Not vetting the candidates of the intentions there. Now, don’t feel bad though. Because most Americans were busy, We’re busy living our lives, raising our families and running our businesses. So, how are some to know? But now we do know. That’s the point. Now we do know, we know what the problem is. And now we’re going to fix the problem.
That’s a very sophisticated style of wooing from Sarah Palin. It’s very welcoming to those who fell for the Obama/Big Media claptrap. It’s also not a defensive crouch but instead an aggressive camaraderie. ‘You were duped,’ says Palin ‘but don’t worry about that but instead join us in our fight.’ That’s a smart lady at work.
Compare the Sarah Palin approach to the nasty Barack Obama remarks about Tea Party activists. Obama thinks, on April 15 tax day, while talking about trips to Mars and asteroids, that Tea Party activists should “thank” him. No taking into account the questions and doubts legitimately asked. Instead, Obama says once again ‘worship me’. “You would think they’d be saying thank you” Obama says. What a nasty creature! And he says this at a Miami fund raiser of over $30,000 a head. The only thing missing is the “bitter and clingy” from the San Francisco fundraiser.
Obama demands worship and thanks from those darn Tea Party activists in much the same way that King George III thought the Boston Tea Party activists should worship and thank him. Obama Dimocrats and Big Media are more than happy to worship and thank their golden calf – as well as attempt to disrupt and divide Tea Party activists. Obama Dimocrats will also assist their golden calf by smearing as “racists”, now “Tea Klanner” those they disagree with.
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Why is Chuck Schumer worried?
We’ve been deadly on target regarding Chuck Schumer. In 2008 we uncovered the Chuck Schumer machinations in New York State’s senate appointment fight. Caroline Kennedy did not just self-destruct. Chuck did not want to campaign with an unproved product and Chuck certainly did not want to be second fiddle again – to a woman. As much as we were attacked, we were proven right.
The crazed Ted Kennedy schemes with Barack Obama to make Caroline president did not stop Chuck Schumer from hitting Caroline with a 2×4. By the time we wrote Treachery, Fear, And Loathing, In New York, we sounded like lunatics, but the lunacy was not on our part – we were accurately describing the schemes and plots of Chuck Schumer.
By January of this year, it became apparent that the Chuck Schumer 2×4 wielded against Caroline Kennedy, still had the bloodstains of Hillary Clinton on it. The evidence mounted that Chuck Schumer plotted along with the rest of the Dimocratic leadership, including Harry Reid (who looks more a loser every day and another potential Clinton Karma recipient), to get rid of Hillary Clinton.
Chuck’s self-interested machinations with the Dimocratic leadership helped Barack Obama but destroyed the Democratic Party because it destroyed the FDR coalition. In November we’ll know for sure if Chuck was right or whether we are right. [But when a Democratic polling firm declares Obama behind Mitt Romney and Mike Huckabee as well as barely ahead of Sarah Palin and Newt Gingrich, the Hopium guzzlers should not bet against us.]
By January 21st of this year we began to note the polling weaknesses of Chuck Schumer. If only a candidate would appear to run against him Schumer was vulnerable. We not only noted how weak Chuck was in the polls, but we also demonstrated how the then scheduled terror trials in New York could be used to defeat Chuck Schumer in the same way that terror trials as an issue helped Scott Brown defeat Martha Coakley in Massachusetts.
Almost as soon as we published our Terror Trial article, Chuck Schumer went on the warpath against the terror trials to be held in New York. Now a new, equally threatening issue has arisen that has Chuck Schumer worried.
New polling is raising questions about Jewish support for Barack Obama and his policies in the Middle East. Enter Ron Lauder.
Ronald Lauder of the World Jewish Congress (and son of cosmetics megastar Estee), wrote a letter:
“Dear President Obama:
I write today as a proud American and a proud Jew.
Jews around the world are concerned today. We are concerned about the nuclear ambitions of an Iranian regime that brags about its genocidal intentions against Israel. We are concerned that the Jewish state is being isolated and delegitimized.
Mr. President, we are concerned about the dramatic deterioration of diplomatic relations between the United States and Israel.[snip]
Our concern grows to alarm as we consider some disturbing questions. Why does the thrust of this Administration’s Middle East rhetoric seem to blame Israel for the lack of movement on peace talks? After all, it is the Palestinians, not Israel, who refuse to negotiate.
Israel has made unprecedented concessions. It has enacted the most far reaching West Bank settlement moratorium in Israeli history.
Israel has publicly declared support for a two-state solution. Conversely, many Palestinians continue their refusal to even acknowledge Israel’s right to exist.
The conflict’s root cause has always been the Palestinian refusal to accept Israel as the nation state of the Jewish people. Every American President who has tried to broker a peace agreement has collided with that Palestinian intransigence, sooner or later. Recall President Clinton’s anguish when his peace proposals were bluntly rejected by the Palestinians in 2000. Settlements were not the key issue then.
They are not the key issue now.[snip]
The Administration’s desire to improve relations with the Muslim world is well known. But is friction with Israel part of this new strategy? Is it assumed worsening relations with Israel can improve relations with Muslims? History is clear on the matter: appeasement does not work. It can achieve the opposite of what is intended.
And what about the most dangerous player in the region? Shouldn’t the United States remain focused on the single biggest threat that confronts the world today? That threat is a nuclear armed Iran. [snip]
Our great country and the tiny State of Israel have long shared the core values of freedom and democracy. It is a bond much treasured by the Jewish people. In that spirit I submit, most respectfully, that it is time to end our public feud with Israel and to confront the real challenges that we face together.”
Don’t think Chuck Schumer did not read that letter in the same way he read the writing on the wall regarding terror trials in New York. Chuck knows when he is threatened.
“Republicans have still failed to land a top-tier challenger to Kirsten Gillibrand, but comes now word of a billionaire to considering a run at her safer senior senator, Chuck Schumer.
Maggie Haberman reports that Ron Lauder, heir to a cosmetics fortune and a former candidate for mayor of New York, is making noise about a run.“
The likelihood is that Ron Lauder is taking out his own 2×4 and warning Chuck on Israel. Lauder financed a successful term limits initiative in liberal New York City and has run for public office before. Lauder is not a particularly user friendly candidate, but unless Chuck gets his act together and distant from Barack Obama, he might get the race he does not want. A race against Lauder would put the significant Jewish vote possibly at play.
More nastiness from Barack Obama towards Israel and Chuck Schumer will have to do more than just merely distance himself from Obama. Chuck Schumer will have to take a 2×4 to Barack.
Obama is already acknowledging failure in advance of the November elections:
“President Barack Obama acknowledged Tuesday that, despite the expenditure of substantial political capital by his administration, progress may not be made on Israel-Palestine peace. The AP quoted his reply to a question about how recent successes in negotiating nuclear arms reduction with Russia — and getting 48 nations to sign on to a nuclear material security agreement — might translate into diplomatic successes elsewhere.
The two sides “may say to themselves, ‘We are not prepared to resolve these issues no matter how much pressure the United States brings to bear,'” Obama said.”
Already, Obama can (again) see Palestinians saying “Thanks for nothing Barack“. The Palestinians will be on a long line.
There will be many Jews, Palestinians, workers, the unemployed, budgeteers, companies, politicians, Democrats and Dimocrats, young people, black people, white people, and celestial choirs screaming “Thanks for Nothing Barack!”