Rapacious Corporations?

According to the Commerce Department, corporate profits dropped 20% in the fourth quarter of 2008 from the year earlier. Meanwhile, overall economic activity dropped 6.3%.

So if companies possess the vast powers that the left likes to ascribe to them, how could this happen? Why wouldn't such powerful companies fire enough employees, or cut wages sufficiently, to maintain their profits?

Because this is another one of the Big Lies told by the left.

Profit is the residual claim, after all other expenses are paid. So a given change in economic activity will tend to have a disproportionate impact on profits - both on the upside and downside.

So when the economy grows, we hear complaints about corporate profits growing disproportionately, as if there were something unfair about it. But when the economy contracts, and corporate profits decrease significantly, we hear silence.