SHOCKING! UNEXPECTED! "Bank Profits Soar, Corporate Bonuses Swell, Broader Economy Stagnates"

Bank Profits Soar And Corporate Bonuses Swell As Broader Economy Stagnates

First Posted: 05/25/11 02:26 PM ET Updated: 05/25/11 05:01 PM ET

http://www.huffingtonpost.com/2011/05/25/bank-profit-corporate-bonus_n_866903.html



The divide between corporate fortunes and those of ordinary Americans continues to widen, as banks post strong profits and the nation's largest companies boost executive pay.

Banks and corporations are exhibiting a confidence reminiscent of pre-crisis days, even as the broader economy still sputters. Bank profits soared in the first three months of the year, and corporate profits likewise swelled last year. And executives saw ever fatter bonuses. But the amount of cash banks sent out into the economy as loans declined last quarter, and the pace at which companies are hiring new workers remains disappointing with the unemployment rate stuck around 9 percent.

For big corporations, the recession's legacy has all but faded. But for much of the rest of America, finances are still tight. Home values are falling at an accelerating pace, and high energy prices recall the nightmarish summer of 2008. The widening divide in fortunes constitutes a long-term drag on the economy, experts say.

"If a very small number of people have everything, everybody else has nothing," said Mark Blyth, professor of international political economy at Brown University. "If they decide not to spend, or if they decide basically not to invest, then everyone else's health and well-being depends upon the decisions of a few, whose consumption decisions are utterly different and completely independent of everyone else's."