A favorite conservative attack on President Obama is that his policies — and even his personality — amount to an assault on American businesses. “President Obama himself is the most anti-business president in my lifetime. With rhetoric not befitting a president he has attacked oil companies, banks, airplane users, Wall Street and anyone who makes money,” wrote Gary Shapiro, president and CEO of the Consumer Electronics Association.
However, according to the latest data, President Obama has been very good for America’s biggest businesses. Last year, in fact, the Fortune 500 made a record $824 billion, topping the previous record set before the Great Recession:
The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy. The 2011 profits are outsized based on two key historical metrics. They represent 7% of total sales, vs. an average of 5.14% over the 58-year history of the Fortune 500. Companies are also garnering exceptional returns on their capital. The 500 achieved a return-on-equity of 14.3%, far above the historical norm of 12%.
Of course, that return to pre-recession level earnings hasn’t translated into job or wage growth for America’s workers. In fact, inflation-adjusted wages fell last year. Big companies are also squeezing more productivity out of their workers, with annual revenue generated per worker increasing by more than $40,000 over the last five years. CEO pay, meanwhile, increased 15 percent last year.
This data also puts the lie to the Republican claim that corporate tax cuts will spur businesses to hire. If all it took were extra cash, businesses would be hiring like crazy. However, they are clearly not doing so — and the effective corporate tax rate is already at a forty year low.