Bucking up the MOUs: it will take more than record profits to heal their bruised psyches

by digby

Well, this is a big relief. Somehow, the “job creators” seem to be getting by, despite all the uncertainty and lack of confidence:

The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy. The 2011 profits are outsized based on two key historical metrics. They represent 7% of total sales, vs. an average of 5.14% over the 58-year history of the Fortune 500. Companies are also garnering exceptional returns on their capital. The 500 achieved a return-on-equity of 14.3%, far above the historical norm of 12%.

Unfortunately,despite these record profits and capital gains, they don’t feel quite confident enough:

Of course, that return to pre-recession level earnings hasn’t translated into job or wage growth for America’s workers. In fact, inflation-adjusted wages fell last year. Big companies are also squeezing more productivity out of their workers, with annual revenue generated per worker increasing by more than $40,000 over the last five years. CEO pay, meanwhile, increased 15 percent last year.

This data also puts the lie to the Republican claim that corporate tax cuts will spur businesses to hire. If all it took were extra cash, businesses would be hiring like crazy. However, they are clearly not doing so — and the effective corporate tax rate is already at a forty year low.

But the CEOs and investment bankers have got very hurt feelings. And until someone assures them that they are really wonderful people whom we all respect and admire above all others — and prove it by lowering their tax rates and lifting all regulations — I’m afraid they’re just going to stay in their shells, uncertain, unself-confident and insecure. These poor fellows are very psychologically fragile and we’re going to have to keep trying to buck them up. So to speak.