Corporate America finished the second quarter of 2010 with “near-historic” profits, largely by cutting costs, laying off employees and investing hoarded cash. This entirely patriotic and socially-aware set of bean-counter policies meant that profits in the S&P 500 soared 38% from the same period last year, hitting $189 billion – the sixth-highest quarterly total in US history. And here’s the final lulu: analysts expect the trend to continue in the third quarter.

The robust state of corporate profits means, in reality (as The Slog has posted many times before) that companies won’t spend their money until the economy improves, but the economy won’t improve until they spend their money.

If we are going to have eclectic economic stimulation – and that’s what we need, not more narrow QE to ease credit that nobody wants – then the cash-rich multinational public companies and top six banks need to fork out most of it: they have mountains more money than the Government, which as ever relies on taxes paid by the ordinary citizens. 

The New York Times reports that near-zero interest rates (ZIRP) have encouraged companies to borrow money and simply hoard it ‘because they can’. The S&P big boys alone have $1.6 trillion in cash cash reserves today, representing the highest percentage of company assets since 1964.

Bank profits during the second quarter rose 21% to almost $22 billion, the highest level in three years. But the net worth of households and non-profits dropped 2.8% over the same period – the lowest since Q3 2009.

This same scam is going on in the UK and throughout the EU. This has to stop. This has to stop, and there have to be citizen Parties or Pressure Groups of some kind to stop it….before people with a whole other agenda start muscling in on the protests. Before things start to turn really nasty.

We need a Basel IV – one that says “clear up your own mess this time, because we’re broke and innocent and you guys are rich and guilty”.

Just think this through. Because the banking industry went on a binge of notional paper-money shuffling – a practice of no purpose whatsoever in the encouragement of entrepreneurial capitalism – the taxpayer had to bail them out: despite the fact the the surviving, flourishing bank sector had more than enough money to do that itself.

Why?

Despite the fact that this cost all of us $23 trillion globally, the survivors and the bailed out carried on just as before and within a year were paying themselves enormous bonuses again.

How?

In order to ‘help’ the economies these psychos had wrecked, the Irish taxpayer will be pauperised for a generation, 25% of all Western populations living on retirement investments have seen their meagre incomes destroyed by ZIRP, and well over $13 trillion of their money has been invested in ‘QE’ that has achieved nothing….except to allow big business to do M&A on the cheap, which enabled them to lay off and foreclose more of the people who stumped up the QE in the first place. 

Now Ben the banker wants Americans to do this all over again, despite the fact that the beneficiaries are richer than they were before we started this crazy ride. And this morning, the UK’s once-rescued banks are already saying they’re going to need more bailout.


Whaaaaat?

I mean, is Government putting valium in the water supply or something? Are we all completely mad? Have the folks who built the British Empire and the American Union, the Channel Tunnel and the Golden Gate, suddenly decided they like nothing better than having a Yardbrush rammed up their backsides twice a day and three times on Saturdays?

There is only one branch of our cultures that should be stopping this, and that’s government using the full force of whatever emergency laws it needs to stop this obscene pavanne right now. And if that means these greedy, arrogant, braindead jerks go to live in Switzerland, well then fine – go buy all the cuckoo clocks and Toblerone you can eat, because we’re going to ring-fence the whole country and never let you out again.

Do Brussels, London, Washington, Berlin, Paris and Frankfurt look as if they’re shaping up to do this? Does the Pope shit in the woods? Are bears celibate? Is Lloyd Blankfein human?

The existing political and financial Establishments of the West remind me today of France’s ancien regime in the decade before 1789. They do not see, hear or care about the 97% of humanity not included in their depravity. They are incapable of reform. They see nothing ridiculous, unfair or greedy in their behaviour. They pursue agendas and solutions of nil relevance to the real world. They are morally derelict minnows, the inheritors of national wealth and political traditions created by their great-grandfathers, and worshippers of an economic system they will never understand, because they lack the spine to run it properly, and the foresight to see how its perversion will end in their destruction.

These are bizarre times replete with disordered appetite and twisted minds. The privileged mad are running our lives, dumbing down our kids, and spending our futures. We must get rid of them in the most orderly fashion we can arrange. But from here on, standing by to watch is simply not – to my mind – morally supportable.

Related (light relief): Nightmare on Wall Street: An American Future.