Reich: 'American companies may never rehire large numbers of workers'

If Robert Reich is to be believed, it's the end of an era that started when your great-grandfather was just a thought:

The Great Decoupling of Corporate Profits from Jobs

Second-quarter earnings reports are coming in, and they’re making Wall Street smile. Corporate profits are up. . . . Big businesses have recovered almost 90 percent of what they lost. . . . So with all this money and profit, they’ll start hiring again, right? Wrong – for three reasons.

First, lots of their profits are coming from their overseas operations. So that’s where they’re investing and expanding production.

GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States – down from 468,000 in 1970. . . .

[Two more reasons worth clicking through to read]

The reality is this: Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won’t start buying against until they know they have reliable paychecks. (h/t Brilliant at Breakfast)

To which I'll add, American consumers won't start buying until they pay down the mountain of debt they spent enjoying the RBC (Reagan-Bush-Clinton) "prosperity." Be prepared, folks, just in case. Trim expenses hard, and if you can, hoard cash. Après Bush, le Déluge unless we're very lucky.

GP