Why Corporate Profits are Soaring and the Recession Continues

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Ben Cohen
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Robert Scheer explains why corporate profits and economic recovery are not going hand in hand:

The assumption of both the Bush and Obama administrations was that what was good for the banks would be good for the general economy, but just the opposite has happened. While the financial sector flourishes, the economy stagnates. As The Wall Street Journal reported in its story on the release of the Fed minutes: “Federal Reserve officials downgraded their outlook for the U.S. economy … projecting that the jobless rate could exceed 8% for two more years and that it won’t return to its former vitality for five years or more.”......

What has occurred is what former International Monetary Fund chief economist Simon Johnson referred in The Atlantic back in May of 2009 as “The Quiet Coup,” in which the financial industry is fully in charge of the government’s response to our economic problems. The result, he noted, is “the reemergence of an American financial oligarchy” that had been broken by the banking regulations imposed during the New Deal in response to the Great Depression. Franklin Delano Roosevelt’s sensible regulations were gutted by Bill Clinton and George W. Bush, and tragically Obama has failed to restore them. The Wall Street lobbyists got their way and unfettered greed prevails. How else to explain last quarter’s outrageous profit figures?

This is again, an example of socialism for the rich, and free markets for the poor. The results? The rich get richer (socialism) and the poor get poorer (capitalism). Yet still, the fanatical dedication to free markets continues...