The good news: Fortune 500 companies are making money at pre-recession levels.

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%.

The bad news: these companies are still hoarding a lot of cash and not hiring many people.

America’s non-financial companies are sitting on over $2 trillion in cash reserves. Businesses are reinvesting profits at a rate of 16.5%, down from 20% before the financial crisis. Hiring remains sluggish, with 115,000 jobs added in April.

Decreased demand and smaller work forces have American companies creating profits more efficiently, but it’s not likely that this phenomenon will last.

These big numbers can’t last. The gravitational pull of the business cycle will eventually end the profit bonanza, in part because many companies carried out brutal layoffs during the recession and will now be forced to hire more workers to maintain their growth.

It seems that what would really be good news for the economy is a little bad news on the profit front. Maybe these companies should think about using their considerable cash reserves for a little Keynesian stimulus.

Pay your workers enough to buy your products (think Henry Ford, not the Waltons). Hire a few people to jumpstart demand, perhaps. It’s not socialism when it’s done in the private sector!

Or stuff it in the mattress.

In the battle between the short-term bottom line and the long-term bottom line, it seems that the former wins again.