The July 25 NYT ran an article, “Industries Find Surging Profits in Deeper Cuts.”
The essence was that our economy is in a unique situation: profits are soaring – not because sales are rising, but because costs have been cut to the bone and are staying that way. Meanwhile, unemployment is terrible, and may well stay that way for 3–5 years (David Gergen’s view).
Here’s a quote:
“This seeming contradiction – falling sales and rising profits – is one reason the mood on Wall Street is so much more buoyant than in households, where pessimism runs deep and joblessness shows few signs of easing.”
It reminds me of a story my father used to tell about an elderly couple in a small New England town. The husband had been employed by the town for 30 years to polish the Civil War cannons on the village green. One day he came home and announced to his wife, “I’m going into business for myself – I bought a cannon.”
Think about it.