"Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
"Actually, many American companies are -- just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
"The trend helps explain why unemployment remains high in the United States, edging up to 9.8% last month, even though companies are performing well: All but 4% of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.
"But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, says Robert Scott, the institute's senior international economist.
"'There's a huge difference between what is good for American companies versus what is good for the American economy,' says Scott.
"Many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil."
Government policy has accelerated the growing inequality. It has encouraged American companies to move their facilities, resources and paychecks abroad. And some of the biggest companies in America have a negative tax rate ... that is, not only do they pay no taxes, but they actually get tax refunds.
(And a large percentage of the bailouts actually went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.)Conclusion: Piketty Is Rickety On Government Complicity
The bottom line is that Piketty has done a great job of documenting the extent of inequality, and some of its causes. But he misses the degree to which bad government and central bank policy is responsible.
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