Students in Ms. Aucoin's class should please read the following article:
http://michaelmoore.com/words/latest-news/fortune-500-profits-bounce-back
Students should choose one quote they find most interesting, and then add commentary.
And be glad you're not my students taking 6 days worth of 6 hour exams that start at 5 am so they can be in sync with students in Europe :)
About Me
- Maureen Owens
- Theo and I are living in Martinique this year. Our blog is a forum to air his views on life here in grey, my philosophical ponders in green and as a pedagogical tool in blue. I am very grateful for any posts because I'm more interested in your comments than in my own ideas.
"Twenty-seven months after the recession began, unemployment is stuck at 9.7%."
ReplyDeleteBecause unemployment rates are so high, people are more fearful of spending large sums of money on new houses, cars, and expensive appliances. Once that salary is lost, the new house or car would cost too much to maintain, and there will be a sense of regret for spending on "wants" instead of "needs." That's why the housing starts are low and the car companies are collapsing and that the recession is still not over.
"Twenty-seven months after the recession began, unemployment is stuck at 9.7%."
ReplyDeleteBecause unemployment rates are so high, people are more fearful of spending large sums of money on new houses, cars, and expensive appliances. Once that salary is lost, the new house or car would cost too much to maintain, and there will be a sense of regret for spending on "wants" instead of "needs." That's why the housing starts are low and the car companies are collapsing and that the recession is still not over.
"Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that's largely escaping notice. "
ReplyDeleteI thought this quote was interesting because it showed that everyone cannot clearly see the progress some parts of the economy has made in the last few months. We are so caught up on the economy getting back to the way it was quickly and for salaries to increase that we sometimes don't see that that the economy is slowly getting better and it will take time. Media sometimes exaggerates on one aspect of a story and don't mention the other side.
-N.P. PD 2
"That trend reversed in 2009. Wal-Mart (WMT, Fortune 500) managed to lift revenues, on top of a big increase in 2008, by attracting bargain-hungry customers from competitors with remodeled stores and inexpensive private-label goods, offering everything from frozen pizza to patio furniture in one stop. A single trip also meant less spending on gas. Result: Earnings surged 7.0% to $14.3 billion."
ReplyDeleteIt's pretty funny how people will turn to Walmart in turn of crisis. They selfishly go out to spend less, instead of spending more, which would probably help the economy and the recession. Granted, some simply can't afford to go out and spend more because they have lost their jobs, but it's silly to do this when you have a stable source of income. Everyone's excuse for buying less, or buying cheaper goods, or laying off workers, or cutting down on quality materials is "the recession." It's become somewhat of a joke, commonly parodied in political satire.
Walmart is pretty notorious for poor quality material goods, goods that are "Made in China," and mistreating their workers. They sometimes pay a full-time employee not enough at all, under the poverty line--just because we're in a recession doesn't mean that we should buy from Walmart and support this. And buying poor quality goods.. You might as well spend more on something that will last longer, and be a better investment in the long term, instead of something at discount stores.
Though, in New York City, the nearest Walmart is in Long Island, so probably not less spending on gas. (Who needs to buy patio furniture and frozen pizza in the same store in this recession, anyway?) I'd assume that their competitor Target is doing fairly well too.
On another note, this is even reflected in Japan. Ramen sales will increase during times of economic crisis.
Also, good luck to your students on their exams!
ReplyDelete“The star of 2009 is undoubtedly health care. The sector's earnings jumped to an all-time high of $92 billion, placing it second behind tech at $94 billion. Health-care earnings rose by $23 billion, or 33%. It wasn't the band of new arrivals that accounted for most of the bounty, but extremely strong earnings from two groups, one surprising -- medical insurers -- and the other more predictable, pharmaceuticals.”
ReplyDeleteI found this quote particularly interesting because this quote is a reminder of how the policies of government can affect the economy. First the bailout saved many of the companies in this article that made immense profits. Now, the recent healthcare reform bill will probably catalyze great growth in the healthcare industry. The government essentially made the entire United States the market for the healthcare industry. A greater market = greater profits.
R.C. Period 2
"In consumer cyclicals, a category that could be labeled "things you'd like to buy but can put off," companies suffered losses of $42 billion in 2008. Casino operators, electronics retailers, and auto-parts suppliers saw revenues fall faster than they could slash costs."
ReplyDeleteI actually thought that this area would lose more money since other areas lost more than twice the amount they lost. I think its due to that fact that people view the 'things you can buy but put off' differently. Some could argue that its not necessary to buy the latest things because we would be completely fine without them. Others maybe disagree and say that in the long run they would be getting the better deal.
I agree with Elaine's comments on Walmart because President Obama was encouraging people to go out and spend so that the economy would receive a boost. However, spending on stores like Walmart or Target doesn't help as much, even if you might be saving a few extra dollars.
AJ-Pd2
This comment has been removed by the author.
ReplyDelete"Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that's largely escaping notice. The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits. For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that's the second largest in the list's 56-year history, approaching the increase in the robust recovery of 2003. For last year the 500 raised their return on sales from less than 1% to 4%. That's close to the list's 4.7% historical average. "
ReplyDeleteI found this quote interesting because, as stated, news have been centered on how the economy has been dwindling and how jobs are slowly but steadily being lost. But the top 500 publicly owned corporations are succeeding beyond comprehension. The bright side is that money is being put back into the economy, but it makes one wonder if part of the success is caused by the lack of employment and bailouts. Its great to hear america is getting back on track but if its at the costs of people's lively hoods is it worth it.
Quote: For the drug industry, it's as if the recession never happened. The sector's earnings surged by one-third to $64 billion, with Pfizer (PFE, Fortune 500) (up 7%), Abbott Laboratories (ABT, Fortune 500) (up 18%), and Merck (MRK, Fortune 500) (up 65%, aided in part by its acquisition of Schering-Plough).
ReplyDeleteThis quote is interesting because too often everyone thinks every section of the world is going downhill with this recession but this is not the case. Companies such as drug companies are still doing well because there is always going to be a constant demand for them. Also, other companies can take guidance from the companies that seem to be recession-proof and adapt the ideas that make them succeed during hard economic times.
"In late 2008, Mattel foresaw that sales would plunge in 2009 and introduced a clench-jawed cost-cutting campaign called Global Cost Leadership."
ReplyDeleteIt is nice to know that at least one company has the smarts to look toward the future. Yes they did have to cut jobs, but they did so in when the economy was better than it would have been even a year into the future. This benefited everyone the cut employees most likely had an easier time finding a job than their counter-parts laid off a few months into the future when the job market was even worse. Mattel benefited by cutting cost, and by having a preemptive workforce cut they reduced the amount of employees they had to cut. If more companies, namely those in the banking industry, took the time to look toward the future our country's economic situation now maybe be very different.
"They cut costs incredibly aggressively."
ReplyDeleteThe crucial reductions came in the item accounting for two-thirds of their costs: labor. In 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history -- almost 3.2% of its payroll. By mid-2009, companies were making fewer goods with far fewer workers.
That seems to be America’s go to answer: When times are bad, screw the workers. This practice would be horribly shocking if it wasn’t so horribly mundane; it happens ALL THE TIME. Many of these companies had other ways to make their money back without cutting jobs: they could have curbed spending, which they did, staggeringly so. They could have lowered prices to attract customers, which they also did. But while they did these things, they STILL decided to cut more than three-quarter million of their jobs. It just sounds very callous and cruel.
shakira prd. 1
"But the recession posed a historic threat to just about every other business. The Fortune 500's remarkable response is yet another chapter in the saga of a list that's gone from boom to bust to almost normal, all in the space of three short years. Never has getting to "almost normal" been a bigger achievement".
ReplyDeleteAlthough the recession posed a lot of threats to many industries, many industries are starting to bounce back and we are close to getting out of the recession. Fortune 500's profits have gone back up and many other corporations are also bouncing back from the recession. Its nice to see how some companies have managed to cope with the recession and are now starting to make large amounts of profit. More money is being put into our economy now but it was a struggle, corporations had to do anything they could, including firing many employees but in the long term, I think it is necessary in order for our economy to have a resurgence.
A.P Pd.2
"The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits. For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that's the second largest in the list's 56-year history, approaching the increase in the robust recovery of 2003."
ReplyDeleteI think this quote essentially sums up the main point of the article. While the recovery was pending, most companies were gradually able to get back into a working state. However, the unemployment rate has generally remained unchanged, which means that the net profits are not going to wages but rather to unexpected bonuses.
Apparently, when the economy was crashing, it was necessary to pay the big companies first. Now that we're recovering, the big companies are still being paid first...
Nevertheless, I think this is great news because high profit returns to companies will inevitably result in a rise in employment positions and hopefully this will start chipping away at the unemployment rate. While I'm still disappointed by the priority of where the money is flowing, at least now there is money to flow. Once all the high positioned businessmen get their cut, the working people will finally be able to spend more money at Wal-Mart.
--Manjinder
"The crucial reductions came in the item accounting for two-thirds of their costs: labor. In 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history -- almost 3.2% of its payroll. By mid-2009, companies were making fewer goods with far fewer workers."
ReplyDeleteIt's funny how in such a severe economic crisis, corporations take it upon themselves to see laborers as expendable employees who can be fired at any time in order to help with their finanaces. This, in turn, seemed to provide a negative output for the initially negative input. Product production, without the presence of laborers, severely decreased. My major question is, how can companies possibly believe that laying off such a large number of their labor staff, aid in their financial difficulties, if they are responsible for a great deal of the production...?
"The Fortune 500's remarkable response is yet another chapter in the saga of a list that's gone from boom to bust to almost normal, all in the space of three short years. Never has getting to "almost normal" been a bigger achievement."
ReplyDeleteI thought this quote was most interesting because this quote shows the state of business in the most accurate manner. Business right now is unstable and inconsistent. It has crazy ups and down, where you're doing horrible and then all of a sudden you are going up in sales. There is no normal year in business nowadays. However, we must keep in mind that this is only true for big corporation. These past couple of years has been a nightmare for small business owners. They don't even have the satisfaction of seeing their business do exceptionally well for a change. More and more, small business has to fix their price to match big corporations like KeyFood and Walmart and more. They do this in order to survive. More and more consumer are going to big corporation owned supermarkets instead f nearby grocery stores so they can get better deals. In my neighborhood, there has been atleast 5 restaurants closed due to slow business. In one part of my neighborhood near 147th st northern blvd, they fail to get new business to sign with them, even after 2 years since the prior business has closed down. A restaurant that opened up next to it closed down less eight months after it opened! People should start helping small business owners by spending more. I'm not saying to exceed your budget but as consumer we shouldn't be too frugal to the point where we are not spending money at all!
SB.Lee Pd1
"In consumer cyclicals, a category that could be labeled "things you'd like to buy but can put off," companies suffered losses of $42 billion in 2008. Casino operators, electronics retailers, and auto-parts suppliers saw revenues fall faster than they could slash costs."
ReplyDeleteI find this quote particularly interesting because it provides an angle that I think most people forgot about, judging from what I read in previous comments. This quote states that suppliers saw revenues fall faster than they could reduce prices, which reminds me that the suppliers aren't always the bad guys in the situation. They want to help their costumers and their businesses by reducing prices, but by the time they realize they have to go to that extreme, it is too late. Their costumers have already stopped shopping because they have the idea that they could put it on the back burner embedded in their minds. Profits drop lower than they could imagine, and they are put in the position of either cutting back the staff, or filing for bankruptcy. I just want to bring this idea back to the minds of my classmates because some of them have taken up the position of being against the company owners. I want to remind them that if the costumers, who are also the workers of some of these companies, step up against the recession instead of running for the nearest Wal-Mart, then the smaller companies, and those who are struggling to pay all their workers' wages, might be able to survive. It might not be a quick bounce back from where they are headed, but it would be better than where they will end up- better than having to lay off workers,which so many of my classmates diagree with.
"For the drug industry, it's as if the recession never happened."
ReplyDeleteI am not surprised by this. This is a perfect example that the health and drug industry will never go down. These are always in demand and there are quite a few reasons for this to occur. For one, advances in drugs never stop and the need for these new drugs are growing as poor health conditions develop. And also taking the initiative to lay off as few workers as possible while being able to maintain their businesses was a smart decision. Maybe other companies can watch their strategic decisions and learn from them.
A pivotal turn began midyear. Sales bottomed, then began to rise gently, as headcounts continued falling. "The largest part of the gain came from lower payrolls rather than the sluggish rise in sales, but they both contributed," says Dirk van Dijk of Zacks Equity Research. The result was a wondrous surge in productivity, defined as the hours needed to make a bicycle, a PC, or a ton of insulation.
ReplyDeleteI find it interesting that the increase in profits didn’t really result in demand for their products or success of them. It depended on the lower amounts of workers they are using. It is indeed profitable to have less workers, hence less money used to pay them, but in this recession we need more jobs. Increasing productivity with fewer workers is more profitable, but these profits need to be used to create more jobs. However the fact that we are slowly recovering is still process; now we just need the increased employments.
Kazi pd 8
"The crucial reductions came in the item accounting for two-thirds of their costs: labor. In 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history -- almost 3.2% of its payroll. By mid-2009, companies were making fewer goods with far fewer workers."
ReplyDeletethis idea might be normal is there was a depression, but we are not in a depression anymore and consumer spending are going up slowly, but companies are still not hiring and that is just going to stop the growth of the economy. so while everybody else suffers companies are making more profit, especially walmart. and the idea of oil company dropping from the number 1 spot was not surprising, people have to cut back on something if they don't have a job and since they don't have a job where are they going to drive to every morning and every night.
"At the same time, wages rose only slightly. So for all of U.S. industry, the labor costs of creating a good or service -- a measure known as unit labor costs -- fell by 4.6%, according to the U.S. Department of Labor. That's the sharpest drop in postwar history."
ReplyDeleteUnderstandably, recession and weak economy contributes to decreasing avg. wages for Americans, but I feel like this is the start of weakening working class. It all feels very backwards, as if eventually, America will be the next China where workers receive low wages for high volume productions. At this point, we remain very far from that, but it's possible. I think something needs to be done about decreasing wages, because it doesn't make any sense. Americans will not be lifted out of recession if they cannot pay for more then the basic necessity, and the only thing this saves is big corporations.
"Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that's largely escaping notice."
ReplyDeleteI found this quote interesting because the media is talking about how the economy has been going down, and how jobs are being lost, but this article gives a different perspective. Top corporations that should be losing money and going bankrupt are still standing tall and strong and it and they're making a huge comeback. Its great to know that it feels like we're getting out of the recession, but jobs are still being lost. If the success of our economy and major corporations is succeeding by people having less jobs, wouldn't that lead us to a worse situation?
"The fall in commodity prices removed half-a-dozen energy production, oil refining, and pipeline companies, and bumped last year's No. 1, Exxon Mobil (XOM, Fortune 500) ($285 billion), into second place, far behind the new leader, Wal-Mart ($408 billion)."
ReplyDelete-People are becoming more conscious of their pocket ever since the economy fell. This is the cold truth that in times of hardships people aren't too proud to go for the cheaper things and thereby conserve. Although Wal-mart gets a rep. of being a 3rd rate, bottom of the barrel department store, people are recognizing that you can't go by the name but instead by what's right for your pocket. When Wal-mart's sales exceed that of a top leading oil company which many people rely on for heating and gas, you know the world is coming to an end. Just kidding, it just shows how an economic downfall can turn splurgers into smart spenders.
"The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits."
ReplyDeleteThis is a classic example of how employment and jobs lag behind the overall economy. What usually happens is that when a company suffers losses, they wait until the losses become too big to manage to lay off and they lay off until the losses slow enough or stop. They on;y start hiring again when they make gains and need more workers in order to continue as such. A company won't hire when it will hurt it in the long run or if it feels uncomfortable. We won't see jobs return until the economy's comeback goes far enough to make businesses comfortable enough to hire again.
The article says that "Today employers are maintaining the super-low cost regimes they imposed during the crisis while the economy is finally growing," and this bring up questions such as how long can these companies continue to suppress their workforce? The economy is starting to get better, and the companies should start attempting to reestablish their pre-recession work forces so as to be able to increase the amount of money available to the market and thus fuel the economy. Perhaps they are still skeptic as to how the public will act as many people are not willing to have risky financial investments and are not willing to spend, in general, as much as they were before as is evident in the surge of revenue at Wal-mart, a chain known for its reduced prices. Hopefully, the job market will catch up with the economy soon.
ReplyDeleteEt Bon courage a vos etudiants!
"Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that's largely escaping notice. The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits. For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that's the second largest in the list's 56-year history, approaching the increase in the robust recovery of 2003. For last year the 500 raised their return on sales from less than 1% to 4%. That's close to the list's 4.7% historical average."
ReplyDeleteI think its strange how companies are making so much of a comeback, way before consumers. It makes sense that they would, but it feels a little fishy. For example, a lot of taxpayer money went toward bailing out companies of their financial problems, and now that they are doing extremely well, one would expect the favor to be returned and the consumers to thrive along with the company, but that does not seem to be the case.
At the same time, consumers are being more stingy than ever so it may not be the company's fault that consumers are not doing well. It would make sense from the trickle down theory that if all that money was in the corporation's hand, somehow it would make its way down to the consumer in the complex economic cycle of America. I suppose that only time can tell if this theory comes true.