Profits

Those not ignorant about things economic know that profits are what are left over after business is conducted. We hear a lot about “obscene” profits and that “now is not the time for profits.” And we wonder why we are in an economic stew? Profits are the return on capital like wages are the return on labor. Without profits we would have no risk capital, no equity, and no funds to start businesses. Higher profits encourage more savings and investment. Without profits the only capital available would be bank loans, and those would be looking for collateral. If now is not the time for profits, then it must be the time for stagnation, huge start up costs, lower employment, lower wages, lower economic activity, and third world status. Without profits there are no 401K’s, no IRA’s, no college funds, and no retirement accounts. And what are profits? They are either used to hire more people (good), buy more goods (good), or distribute dividends to investors (good). And profits come from those who voluntarily engage in business. Think GM’s profits are grossly obscene, don’t buy their cars; think Blacked Eye Pea’s concert profits are grossly obscene, don’t go to their concerts; think Walt Disney’s profits are grossly obscene, don’t see their movies or visit their theme parks. Think an insurance company’s profits are grossly obscene, don’t buy their insurance or, better yet, buy some of their stock and get some profits for yourself. Until massively huge, grossly obscene, gargantuan profits are encouraged from every source possible, we’re economically doomed as financial illiterates.
-- Paul Marotta