Some Good News for a Change

Corporate Profits are up, way up in fact. This is good news for the economy, though not necessarily for consumers in the short run. It's not bad news for consumers, it just doesn't do a whole lot for them right now. Many on the Left argue that employment and more money for the "little guy" are the best things for the economy, and that nothing else really matters. Well, we had that during the 1990s, the Clinton Bubble (whose burst was very painful), and it didn't do us much good. It also was a decade of very low capital formation, we were spending our way into prosperity, only to discover that prosperity was soon followed by recession. Corporations, at least most corporations who have long term focus (and corporations that don't aren't around for long) are taking their profits and reinvesting them in capital. That is good news for productivity. Capital investment right now could also mean new alternatives to the oil-driven economy. This could be the shot in the arm that will prevent major economic catastrophe in the near future. Let's just hope the Democrats don't win any elections soon, because Big Corporations are the favorite target of Democrat tax increases (well, Big Corporations and everybody else in the country).