Despite the gloom on the jobs front, corporate profits are gushing. Honeywell, Caterpillar and Xerox have all posted 40 percent plus gains in earnings, and more good news comes in from GE, Verizon and McDonald’s.The one thing almost everyone forgets about the business cycle in both good times and bad is the simplest: the business cycle is cyclical. During every expansion there are clueless optimists who say this time is different and expect the Dow to double every year until it reaches infinity, and during every recession there are equally stupid pessimists who wail that capitalism (and the US) are finished and we will never see dawn.If we could harness the power of human stupidity we would have an infinitely renewable resource; in the meantime, readers can save themselves a lot of time and trouble by ignoring any pundit or politician who can’t seem to grasp the most fundamental truths about the system in which we live.
This Too Shall Pass
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