247 Comments
Oct 4, 2022·edited Oct 5, 2022Liked by Robert Reich

We certainly should report on the obscene profits of corporations, venture capitalists, banks, brokerage firms, etc. But how would we ever get accurate reports? As I recall when the collection of income taxes first became law in the early days of the 20th century, business men, and men of wealth were horrified that anyone should know their net worth, and least of all the government. We would still need guesstimates since most corporations and even some government agencies use "creative accounting" to brag or hide their assets. It is obvious to all of us on this forum that trump is not the only autocrat to adjust his wealth statements depending on whether he is submitting tax returns or applying for loans (hooray for the NY Attorney General)

Expand full comment
Oct 4, 2022Liked by Robert Reich

After listening to you and your correct assessment of the government failing to inform us of corporate profits, I was thinking the other day as you probably, also saw on the news here in California when the price of gas started increasing again, Governor Newson came right on TV and said point blank the oil companies are making unnecessary profits while the consumer, the people driving and consuming gas, are being “PRICED COCHED” out of a tolerable price for a gallon of gas. He is implementing relief for the consumer having to pay those outrageous and uncalled for prices.

Good for him. !!Why don’t other government officials stand up and call it what it is?? At least he did! Good for him! DITTO!!

Expand full comment
Oct 4, 2022Liked by Robert Reich

We know what capital statistics says about the total market capitalization of public corporations. Last I checked it was about $ 44 trillion dollars. Every nickel of that money was free money for these corporations. So, accounting for corporate profits with a new capital statistics model would offer needed insight to check inflation. The public needs to wake up and demand their rights be accounted for fairly.

Expand full comment

My father used to say, “what you don’t know won’t hurt you “. In this case what the average middle class down Americans don’t know really hurts!

Expand full comment

"because corporations notoriously shift some profits to nations with lower tax rates, depreciate assets like crazy, low-ball profits when reporting to the IRS and exaggerate them when communicating with Wall Street, and use every accounting gimmick imaginable." Sounds like Donald Trump. Hence my suspicion of capitalism--at least as it is practiced.

Expand full comment

Boy you hit this squarely on the nose.

Expand full comment

Boy, did I need this tutorial to understand what information we are not getting. How money hides its power.

Expand full comment

AND of course, these negative reports will come out right before our upcoming elections, and voters will never hear any pushback on how much the "BIG-BUCKS-BOYS" are raking in on PROFITS! Please Robert, is it possible for you (or other more capable than me contributors) to find such info for us to use for pushback? We who nag voters to 'vote, vote, vote' need help getting voters to the polls ! Voters respond to 'reasons' and we who man our local party HQ's need '{POSITIVE' voter motivators' NOW more than ever. So often people feel they & their votes don't count, that nobody cares or listens so 'why bother'. As a long time (I'm 87) 'activist', think you're WONDERFUL, so am asking for myself and others who keep trying to motivate where and however we can. MY SINCERE THANKS FOR ALL YOU DO!!!

Expand full comment
Oct 4, 2022·edited Oct 4, 2022

To me, Dr Reich, you seem to be describing >exactly< the same business practices ol' Tweety's getting busted in NY for - lowballing for IRS and exaggerating for Wall Street. Are all the corporations hiding behind the old "we're under audit" excuse, too?

Expand full comment

I have long felt that wages are really a form of profit. The return on investment of labor is what makes profit happen. So if a company has a net profit of zero, meaning the owners only make money from their labor, not their investment, then the company is still profitable if they are able to pay all employees, including their own non-investment compensation. Profit described this way makes a lot of smaller companies, not owned by wall street, look a lot better. Non-labor profits are, in many ways, a sign of abuse. Generally they go to investors (and I am one sort of since I have a retirement account) without any skin in the game. Unfortunately they are often a result of externalizing costs (pollution, failure to clean up after an extraction process like mining) or under-paying labor, which are basically different forms of abuse. While the size of the investment profit is sometimes publicized, certainly when it gets outlandish like Jamie Dimond or Elon Musk, it is not connected with the abuse that underlies its mass. So how do you get other people to recognize this as a problem without being branded as a Marxist, Socialist, Communist or some form of radical fringe?

Expand full comment

Excellent article.

Expand full comment

That power (and the fact that all of our politicians and/or policymakers) also profit means things are unlikely to change.

Expand full comment

This information should be headlines in our newspapers and news media. it will never be as long as the wealthy own these media.

Expand full comment

Look no further than‘ Citizens United’ !

There may be ‘ Freedom of Speech’ but the more $ you got the louder your voice.

Expand full comment

It's insane that we must bail out hedge fund operators!

Expand full comment

Information about corporate profits is readily available, reported by larger publicly traded companies quarterly. Investors rely on that information, even place bets beforehand about what the number will be. What we need is an index that compiles all that data and translates it into a form that is easily understandable by the laity. Robert Reich is on the right road for this. Ordinary working people need to see apples-to-apples comparison of increases in corporate margins, maybe gross margins, with reported retail price inflation. A complex task because the data are so large. But easily doable with today's computing power. And I like that the incentive to report maximum allowable profits to investors acts as a counterbalance to corporate incentive to underreport profits for inflation measurement.

Expand full comment