Record-High Profits, A Sign The US Is "Going To Ruin"

[zeos3]

http://www.businessinsider.com/adam-smith-our-record-high-profit-margins-are-a-sign-the-us-is-going-to-ruin-2012-6




"What's the fundamental problem? The fundamental problem is that businesses are doing great, as exemplified by those record-high profit margins. But this corporate-and-owner prosperity is not flowing through to average Americans, as exemplified by the record-low wages.

This state of affairs, sadly, is completely unsustainable. Average Americans spend most of the money spent in this economy, and consumer spending accounts for 70% of the overall economy. So the higher profit margins go, and the lower wages go, the more top-heavy the economy becomes. And eventually, if this trend continues, the revenue-growth--and profit margins--of the companies will collapse. And that will be as bad for "the 1%" as it is for everyone else."

-snip-


Check out this Smith quote from "Wealth of Nations," which was sent over by writer Moe Tkacik (follow her here):

"But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin."

[clang1]

1. All the money is at the top. Pretty clear n/t

[pscot]

2. Econ 101

Henry Ford understood it. It's the MBAs running thing now who can't figure it out.