From the New York Times: "The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms ... Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. ... This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad."
What the New York Times doesn't explain is that the struggles of the "nation's workers" bear a direct relationship to high corporate profits. Strong productivity growth here basically means an increase in the rate of exploitation. As the Daily Finance explains: "That productivity boost came as workers spent more hours working, and getting paid less to do it. Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5% as output rose 4.1%, hours worked increased 1.6%, and unit labor costs fell 1.9%, according to the Bureau of Labor Statistics. The profits of U.S. corporations are growing much faster than their revenues. S&P's Howard Silverblatt estimated that corporate profits in 2010's third quarter would rise 18% from 2009, while sales would be up a mere 5.5%. "
Since domestic demand remains relatively weak in the US, despite some boost from the stimulus and despite some weak wages recovery, corporate investors are also using the cheap money made available by quantitative easing to invest in their overseas operations. And as the NYT acknowledges, much of the increase in profits is coming from abroad. Thus, US capital has used two key advantages to revive profitability. First, it has used its overwhelming strength - political, economic, institutional - over workers to extract more labour from a smaller workforce. The flip-side of high profits are more gruelling work, tighter work discipline, more people unemployed, lower wages, longer lines at the soup kitchens, and so on. Second, it has used its overwhelming international dominance, which we might call imperialism, to extract more value from emerging markets, which remain dependent on and subordinate to the US. The obverse of this increased yield is, of course, violent territorial struggle in Afghanistan and Iraq, as well as violent subversion in Honduras and Haiti.
These, aspects of an increasingly brutal, exploitative and repressive capitalist system, are among the reasons why Obamamania has bitten the dust. Obama's electoral coalition was built around the promise of amelioration, a better deal for workers and peace abroad, and neither has been delivered. Obama has been far more completely Wall Street's president than anyone expected. This also helps explain why the corporate media has felt it necessary to act as a mouthpiece and booster for a layer of corporate-funded middle class Poujadists. It is to pre-emptively colonise a political space that might otherwise be filled by the millions of working class Americans who are angry over wages, unemployment, the banks, repossessions, and the endless war. It is to drown out the rational concerns of more popular political constituencies with pageantry, noise and fury, irrational howling, and home-made bigotry. It is to stage the fight that capital wants to see - between ostensibly liberal, cosmopolitan, internationally-oriented, capital-intensive industry, and a parochial, nationalist, bigoted populace, often small business owners working in labour-intensive industries. And the viewer's role is to pick a side, and forget that neither represents their interests.