While the general economy continues to float along a depressionary bottom across all key verticals including housing (quadruple dip), jobs (the "new part-time normal" even as real unemployment has risen to 2012 highs), and manufacturing (contracting for 3rd month in a row and lowest since mid-2009): a bleak picture manifesting itself in a sub-stall speed GDP in the third year after the "recession ended" despite trillions of fiscal and monetary stimulus (not to mention that according to Gluskin Sheff 100% of the developed world is now contracting), one aspect that has not only kept the S&P buoyant, but shoved it to near all time highs, has been the general offset to atrocious labor conditions and low salaries: namely surging corporate profits.
Needless to say (because we have said it many times), corporate profits are no longer surging, and together with corporate revenues, have now peaked on a year over year basis and are declining, but sure enough over the past 3 years, the ability of companies to refinance at ZIRP-levels, and to fire tens of millions of full time workers (offsetting in rare cases by hiring hundreds of thousands of part-time workers) has allowed the build up of a massive cash buffer allowing companies to better prepare for the next systemic crisis, as well as handle the never-ending geopolitical uncertainty. Most importantly, it is this transient yet record profitability, together with now endless central planning intervention by the Fed, that saw the S&P close at the highest level since 2008, a fact which the president will undoubtedly mention and take credit for during the DNC speech in two hours.
So while on one hand corporate profits are something to rejoice over, at least when not blaming them on the previous president, on the other hand it is these same "evil" corporations, in various populist narratives, that are the root of all evil, and are the reason why America's real unemployment rate continues to be sticky in the 15% range.
One such narrative was discovered by none other than Peter Schiff who pulled an OccupyWallStreet (remember that whole Occupy movement?) where but at the Democratic National Convention. What he did, was succeed in exposing some very disturbing prevailing beliefs about the government's role in establishing the 'utility' value of the free market as manifested by corporations, namely that according to a broad cross-section of society, it is the government job to "explicitly outlaw profitability."
We wish to remind readers that this has been done on numerous occasions in the past, but most "effectively" in the Soviet Union's centrally planned regime. Until the USSR's failure of course. The premise of eliminating profitability is also quite popular, and even has its own name: nationalization, and its result in a business "manager" who is perfectly ambivalent if the state owned enterprise makes or loses money. After all the wage is determined by a politburo, and is not a function of the profits, or losses, a business may engender.
Furthermore, it is probably worth reminding that the primary tenet behind capitalism is the production of goods and services for a profit.
Sadly, quite a few of these concepts appear to have not been made clear to not just one or two Americans as the following clip demonstrates.