Now the results of all this presidential appeasement are in. This week we learned that since the recovery started, banks have done not more but even less lending, reducing it by 4.1 percent in the first 21 months after the Great Recession, The Wall Street Journal reported on July 5, citing data from the Federal Reserve Bank of New York. Money that banks make available through credit lines has dropped from $3.04 trillion to $2.69 trillion, and they have cut home-equity credit lines from $1.33 trillion to $1.15 trillion.
The latest data indicate that the government’s other efforts to appease American business, such as the many goodies from an $800 billion stimulus plan, don’t seem to be working either. Corporate profits are soaring, up 47 percent in the first 21 months of the “recovery,” according to The Journal, and yet total jobs were down 0.4 percent, and unemployment remained stuck above 9 percent through the same period. Those corporate profits are being reinvested, but apparently not enough of them in this country. All in all, economists say, it may be the worst recovery on record.
All of which suggests that the unappeasable entity we should be worrying about is not so much the “economy”—which we used to think was made up mainly of us Americans, some 300 million strong—but American business. Except that “American business” just isn’t anymore—very American, that is. The plot of countless “big-is-bad” Hollywood melodramas has come largely true. The decades-long process by which U.S. companies have become detached from the communities and cities that spawned them is almost complete. Multinational corporations, grown gigantic from decades of mergers and acquisitions, simply use their transnational production networks to shift direction effortlessly, like giant flocks of birds on the wing, into faster-growing economies and away from local tax authorities.