The Usual

doughtrain According to a Wall Street Journal report on the latest Commerce Department statistics, the system is functioning normally:

U.S. corporate profits hit new highs last year, driven by the tight lid firms have kept on hiring and spending almost five years into the economic recovery.

A closely watched measure of after-tax corporate profits rose to $1.9 trillion in the final three months of the year, the Commerce Department said Thursday. Corporate profits stood at 11.1% of gross domestic product, up a bit from the prior quarter.

The latest uptick underscored a factor that has dogged the economy since it emerged from recession: Many companies are guarding their cash rather than putting it back into the economy in the form of new hiring.

The normalcy extends in all the usual directions, too.  According to Advertising Age, big business marketing also grows apace:

Why would major U.S. corporations keep a tight rein on almost all costs last year — except advertising?

By continuing their firm grip on hiring and spending, U.S. corporate profits reached new highs for 2013, The Wall Street Journal reported.

Advertising expenses, at least for the top 1,000 companies, was the exception. According to Kantar Media, the biggest marketers boosted spending 3.3%, while smaller advertisers cut ad budgets 6.6%.

What’s going on?

Maybe companies figured it was cheaper to spend money on advertising than to invest in research and development to try to stay one step ahead of the competition.

But that meant advertising’s job [even more] often was to divert attention from the product itself and toward emotional and purpose-driven benefits.

What’s going on? As one of the fake product differentiators says in its ads, it’s not complicated: Corporate capitalism is succeeding at serving its one and only purpose.

Anonymizing the System

sweet_talk Americans are well and truly conditioned not just to hate and avoid politics, but also to fuck it up when they wander into it.

Take the rapidly growing “Growth Must End” trope among the technocrats and vaguely frustrated liberals who now serve as leaders of what passes for an environmental movement. It’s a case-in-point.

True enough: Growth must end. And the green activist world is certainly chock-a-block now with such calls. But have you noticed? The “no more growth” harangues almost never mention the c-word: capitalism. Instead, they muse about “our culture” and the supposedly all-powerful pre-suppositions of academic economists. As if we can avoid conflict with the powers that be, and sweet-talk our way to a decent future.

In my opinion, we do not have time for the purely tune-in, turn-on, drop-out strategy implied by the existing “let’s stop growth” crowd, even granting that one is even conceivably possible in this TV-mediated capitalist dictatorship.

If we don’t acknowledge that capitalists are far and away the main force behind growth, we will lose this race, or never even start it, IMHO. Stopping economic growth is a matter of high politics, not personal attitudes. It is not going to happen without the creation of a sharp and radical and honest social movement pushing for profound, collectively-managed social reforms.

lscap BTW, yesterday, I saw a very hip looking chap leaving a Starbucks for his car holding two beverages in paper cups with plastic lids. On his head? A cap with a cute whale logo saying “Live Simply.”

To my eye, the state of that common persona speaks volumes about the limits of waiting for the great drop-out.

Trends in Unsustainability

capitalist cycle I realize that “financial services” explains some of the number and that the baseline is last year’s anemia, but, nevertheless, this quote from today’s New York Times is worth noting:

“Things are better, but they’re not anywhere near where they need to be to make major inroads into unemployment,” said John Ryding, chief economist at RDQ Economics.

The item that is “not anywhere near enough” to trigger meaningful job creation by the Obama-worshipped, cash-hoarding “private sector?” Last quarter’s 3.2 percent rate of overall economic growth.

So, this is where we’ve allowed ourselves to be taken: A rate of economic growth of the bloated, hyper-distorted, massively wasteful U.S. economy that is wildly, insanely unsustainable in the ecological terms of the 21st century is now nowhere near fast enough to make capitalism do the first, tiniest bit of trickling down.

Such are the wages of letting the overclass buy up everything and impose its supply-side priorities* everywhere. Such is the decrepitude of this outdated, severely dangerous social order.

*“All for ourselves and nothing for other people seems in every age of the world to have been the vile maxim of the masters of mankind.” — Adam Smith, The Wealth of Nations

The Capitalist Road

capitalist roadersChina’s Stalinist capitalists continue to pitch the idea that they are presiding over an “ongoing socialist modernization drive,” that the whole shebang is merely an effort to accumulate the wealth needed to eventually make China into a worker’s paradise.

I might entertain the possibility that this claim is anything but a smokescreen, were it not for news like this:

The average annual growth of China’s advertising industry stood at nearly 31 percent and the advertising industry has become one of the fastest growing industries in China, said Liu Fan, deputy director of the State Administration for Industry and Commerce, during the China International Advertising Development Forum on Oct. 17, which is the first activity of the 11th Western China (Chengdu) Exhibition.

The growth of China’s advertising industry and China’s GDP are positively correlated to a significant degree, he said. China’s advertising industry currently has entered the golden period of development after experiencing four stages of development.

Explosive growth of corporate marketing is a hallmark of and a vehicle for market totalitarianism/capitalist dictatorship. It is a technology that inherently stymies the communication habits and conditions required for creating democracy, socialism, and, ultimately, human survival.

Of course, so does cars-first transportation.

China’s biz-suited big boys (see any girls there?) also like that Earth-killing corporate capitalist industry quite a lot. With all the predictable effects:

beijing traffic jam

Sisyphus Had it Easy

sisyphus Except in boom phases, the economic terms of capitalism always get worse for commoners.  (We won’t think about ecology for now.)

This is most true in recessions, when capitalists redouble their efforts to expand their gross profit margins.

And, voilá — today’s New York Times reports as follows:

The broadest measure of the overall economy grew at a seasonally adjusted annual rate of 3.2 percent in the first quarter of 2010, after gains of 5.6 percent in the fourth quarter of 2009 and 2.2 percent in the third quarter.

While the expansion in output was welcome, it still has not brought the level of hiring growth needed to recover ground lost during the recession.

But as the unemployment rate has hovered around 10 percent for the last eight months — most recently it was 9.7 percent in March — concern about the job situation has persisted.

Even though any pickup in business is welcome, modest improvement may not be enough to ease the lasting pain caused by the so-called Great Recession, many economists say.

Consumer spending grew at an annual rate of 3.6 percent in the first part of the year.

Hiring only recently began to materialize, with the economy adding 162,000 jobs on net in March, of which 48,000 were temporary Census-related positions. The economy had destroyed about eight million jobs since the recession began in December 2007.

In standard NYT procedure, the overall tone of the story is one of mystified concern, with lead and conclusion both conveying muddled non-interpretations.  As usual, the actual explanation is there, but buried in a single, hurried mid-story paragraph:

Businesses have found ways to make more with fewer resources, meaning that they have been able so far to meet additional demand for their products without bringing on many new workers. Companies are also sitting on a tremendous amount of cash, economists say, and appear unwilling to spend it.

In economic terms, what’s happened is that, in these lean times, our “entrepreneurial” overclass has indeed “found ways” to boost productivity, which is the amount of GDP produced per hour by the U.S. workforce.

In fact, according a recent estimate published by The Conference Board, in 2009, U.S. productivity grew by 2.5 percent in 2009, while overall GDP fell by 2.5 percent.  Hence, the overclass was able to produce 2.5 percent less wealth while paying for 5.1 percent fewer hours of labor.

What this means is that there is not going to be any serious job growth unless the economy grows faster than 5 percent (the point these days at which labor demand would start overtaking capitalists’ ability to produce more with fewer employees) for a sustained period.

From a working class perspective, this means that, every year, as capital become more labor-efficient, the size of the boom it would take to bring back decent times for workers gets bigger, and hence, less likely.

(What all that means for the planet’s ecospheres is an equally important and damning topic.)

That’s the facts, Jack.