Here’s a Graph to Chew On

From John Taylor’s blog, a scatter plot graphing the unemployment rate and investment to GDP ratio:
Unemployment rate vs Investment to GDP ratio
Hmmm. From Slate:

According to the Bureau of Economic Analysis, real corporate profits neared an all-time high in the last three months of 2010, with companies raking in an annualized $1.68 trillion in pre-tax operating profits. (After tax, that comes to $1.25 trillion, about equal to the GDP of India.) The Federal Reserve estimates that companies are sitting on about $1.9 trillion. At the same time, unemployment remains at 8.9 percent, and job growth is still anemic.

Now, to find a way to give those companies an incentive to invest that money. I’ll hold my tongue.

HT: Mankiw

EDIT: A nice commentary to help put some of this into perspective. (especially given the small sample size)

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