Profitability: high, and maybe past its peak?
As every Marxist schoolchild knows, the profits “call the tune” for the capitalist economy, as Michael Roberts put it recently. He writes: Despite the very high mass of profit that has been generated since the economic recovery began, the rate of profit stopped rising in 2011. That’s a sign that the US capitalist economy will not achieve any significant sustainable growth over the next year so so. The rate remains below the peak of 1997. But the rate is clearly higher than in was in the late 1970s and early 1980s at… Read More
Learning nothing from crisis (cont.)
An update to Back to the status quo ante bustum: Aline van Duyn reports in the Financial Times that corporate America is once again borrowing money to buy up its stock to boost share prices. The rise in buy-backs and deals marks a turning point in the credit cycle, as companies become more willing to invest their cash and borrow more money. Since the 2008 financial crisis, many companies have been hoarding cash and building up ever greater treasure chests and rainy-day funds. No more of that prudent stuff. But hire, boost capital spending,… Read More
LBO News from Doug Henwood 