Harold Meyerson: Business is Booming but American Companies Don't Need American Customers Anymore.
"Half their revenues come from abroad. Their products, increasingly, come from abroad as well." [.] In 2001, 32% of the income of the firms on Standard & Poor's index of the 500 largest publicly traded U.S. companies came from abroad. By 2008, that figure had grown to 48%. Although precise figures on offshoring are unavailable from either companies or governmental bodies, the evidence of the growth of offshoring is overwhelming. A 2008 survey of 1,600 companies conducted by Duke University's Fuqua School of Business and the Conference Board (a group of leading corporations) found that 53% had an offshoring strategy -- up from just 22% in 2005. "Very few" companies, the survey concluded, "plan to relocate activities back to the United States." The implications of this shift in the conduct of American big business are profound -- and terrifying. At a time when small business can't expand because high unemployment and the decline of home values have depressed consumer demand, big business is increasingly committed to expanding its sales and production abroad rather than at home. That's why the current downturn is different from its predecessors: Unlike any recession in American history -- including the Great Depression -- this one has come at a time when America's leading employers can return to profitability without rehiring large numbers of American workers." [.] This grim new reality has yet to inform our discussion over how to come back from our mega-recession. The existing debate pits those who believe that the downturn is cyclical and that public spending can restore prosperity, against those who believe that it's structural -- that we have too many carpenters, say, and not enough nurses -- and that we should leave things be while American workers acquire new skills and enter different lines of work. But there's another way to look at the recession: that it's institutional, that it's the cumulative consequence of our leading banks and corporations investing in job-creating enterprises abroad rather than in the U.S. Thus, the disjuncture between the record-high profits of American corporations and the otherwise dismal indices of national economic health. Corporate profits for the third quarter were the highest on record -- $1.659 trillion -- and were 28% higher than third-quarter profits one year previous, the highest year-to-year increase on record, beating the old record set in the previous three months." http://www.prospect.org/cs/articles?article=business_is_booming
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