David Broder: US corporations hoarding unprecedented cash ($1.8 trillion).

[woo me with science]

http://www.realclearpolitics.com/articles/2010/06/17/wasted_air_time_105981.html

Wasted (Air) Time
By David Broder

.....
If there is any value in President Obama's knocking himself out to dramatize on prime-time television his impotence in the face of the Gulf of Mexico oil leak calamity, I wish someone would explain it.
.....
The polls so far suggest that voters have a sensible and realistic perspective on all this and are not punishing Obama for failing to anticipate the drilling platform accident and not having a handy tool kit for its repair. To date, his approval numbers have barely moved.

But by dramatizing his belief that the struggle in the gulf has become his main preoccupation, Obama has essentially ignored challenges that may be much more vital to the country -- and to him.

It was no White House official but Rep. Jim Cooper of Tennessee, a conservative Blue Dog Democrat, who called my attention to a short story in the Wall Street Journal last week reporting that U.S. companies are hoarding more cash -- $1.84 trillion -- than at any point in financial history.

The newspaper noted that the cash reserves had jumped 26 percent in one year, the largest increase since at least 1952. Cooper's point is that by stockpiling that vast amount against the possibility of a double-dip recession or another wave of bankruptcies, nervous executives are starving business of investments for expansion and freezing unemployment at a painfully high level.

(more at link)

[Joanne98]

1. And they still won't hire people. Benedict Arnolds.

[Statistical]

2. Tragedy of the commons driven by fear and economic uncertainty.

Its called tragedy of the commons

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

In the recession about 5% MORE workers lost jobs. Had the remaining workers increased spending by 5% to compensate (even going into debt if necessary) the recession would have been avoided. Demand would have been the same, prices rose, and companies re-hired to take advantage of the higher prices. However they didn't they reacted rationally and cut spending, paid down debt, deleveraged, put of large ticket items, skipped vacation, etc. Nobody should blame individuals for not taking extra risks to lift country out of recession.

This is why it is called tragedy of commons.

Individuals acting rationally in their own self interest have larger detrimental macro effects. Companies are no different. In this environment the smartest thing a company can do is pay down debt, deleverage, and improve balance sheet. Some companies will fail and the things I listed are things a company can do to ensure it is "the other guys" and not them.

This is why you need REAL govt stimulus (not that untargeted piece of crap spending bill that they attached the name stimulus to) to break the tragedy of the commons.

[woo me with science]

4. Thanks for the link. nt

[leeroysphitz]

3. Thank god for enlightened self interest and the invisible hand.

:sarcasm:

[unblock]

5. we need to give them more tax cuts and subsidies!

not.

[girl gone mad]

17. Don't forget the bailouts and tax foregiveness schemes..

and we'll have to cut Social Security so we can fund it all..

[jp11]

6. ONLY THE PRIVATE SECTOR CAN CREATE JOBS!

:hide:

[clarence swinney]

11. LIKE

Teachers
Police
Firemen
wo houses
Military
Hospitals
highways
wo houses
universities
wo houses

oldugluymean one track mentality

[Frustratedlady]

7. And, I'll bet the majority are Repug-owned

Since Obama took office, I've wondered if the Repugs have balked at hiring and expanding to keep Obama from looking good. I know, that sounds pretty extreme, but look at what they are doing in Congress. The "No!" Party.

We know that a lot of these company CEOs have "secret meetings" -- what's the one Poppa George has that's so secret -- to control what happens to the U.S. and the world, why not have these same meetings to make Obama look like the worst president ever? Fortunately, it isn't working for them, but I can see where this scenario could happen. They've made enough profit under George W. to survive a few years of freezing out Obama.

I mean, just look at what Barton said. Did you think you'd ever hear that comment "against America"? Check out the WSJ's comments today.

Just sayin'.

[Ilsa]

9. I have no doubt that CEOs direct their expansion policies this way.

They have no intention of doing anything that will improve employment numbers, or assist their employees in having a better life. In fact, I suspect they do everything they can to quietly impress upon their workers that it is the Democratic Party's and Obama's fault that raises aren't available and that their health insurance is being trimmed or cut.

[applegrove]

16. Yup.

[PM Martin]

18. Same thought here.

Can not put anything past the corporate oligarchy.

[William Z. Foster]

20. that is why you have to take them on

Trying to "work" with them, or "partner" with them, giving them seats at the table when citizen groups are excluded is all doomed to fail.

The wealthy don't care about Obama looking bad. they don't care if it is D's or R's in office, so long as they get their way. They bribe and threaten people from both parties.

None of what is happening is really about partisan politics. That is a relatively minor side show, and more of an effect, a symptom, than a cause of anything.

[clarence swinney]

8. corporate please pay your fair share

Article: Gap between Statuatory and Real Corp Tax Rates
Source:Robert McIntyre-TD Coo Nguyen-CTJ.org in 2005

Fortune 500 companies
275 made a profit each year from 2001-2003
only a small proportion paid federal Income Taxes
anywhere near statutory 35 percent rate.
Most paid considerably less.
Average effective tax rate for the 275 was less than half the 35% statutory tax rate.
Over that three year period the effective rate dropped from 21.4 to 17.2 percent.

82 or almost one-third paid zero or less(rebate)
In those years the 82 “made” $102 Billion in US pretax earnings.
Its name is LOOPHOLES subname= $$$$$$$$$$$ to Congress
Those 82 companies generated so many excess tax breaks they actually got $12.6 Billion in rebate checks from Treasury. They made more profit after taxes than before taxes. Wow!
Huge firms like Prudential Financial-ITT Industries-Boeing-Unisys-Fluor-CSX

In 2003 alone, 46 paid zero or got rebate on profit of $42.6 Billion They got $5.4 Billion in rebate checks.
In 2002, 42 paid no tax on $43.5 Billion profit and got $4.9 Billion in rebate checks.

In 2001, Treasury paid $40 Billion in tax refunds or one -third more than 1998-2000 average.
Thanks Republican President And Congress all for Rich Rich. Trickle Down Crumbs.
(ugly old man rant).

Federal Corporate income taxes at lowest level as share of economy since WWII.

Corporate taxes paid over 25% of total federal revenues in 1950's.
6% in 2002-2003.
Praise George W. Allah.

In 2001-2003 period, the 275 firms made profits over $1,100 Billion.
Had they paid statutory rate treasury would have received $370 Billion to pay our bills not borrow.
They reported only half the profits.--$557 Billion . As a group they paid a three year effective tax rate of 18.4% nowhere near 35%.

Loopholes and other subsidies cut taxes for the 275 companies –by $43.4 Billion in 2001, $60.8 Billion in 2002, and $71.0 Billion in 2003 for a total of $175.2 Billion in tax breaks over three years.
Praise Allah!

Half the total tax-break dollars--$87.1 Billion- went to just 25 companies.
Each got over a billion-and-a half dollars in tax breaks.
General Electric got $9.5 Billion in tax breaks over three years. Welched again!

Industries pay low—Transportation-4.3%--Industrial and farm equipment-6.2%--telecommunications-7.5%--electronics and electrical equipment-10.8%--miscellaneous services-14.4%--gas and electric utilities-14.4%--computers-office equipment-16.0%--metals and metal products-17.4%
Not a single company paid more than 29% of the entire three year period or in any given year.

Many reasons--
Accelerated Depreciation(thanks Ronnie)--Stock Options-Tax Credits for certain activities—
Offshore Tax Sheltering—Tax Reform(deform) Options Clinton Treasury tried to reform this sucker but Repubrich Congress denied it.
General Electric enjoyed more Tax subsidies than any in the 275.

Yet, for several year Big Business proponents such as Larry Kudlow
scream a constant drum beat—AMERICA HAS HIGHEST CORPORATE TAX RATE IN THE WORLD. CUT IT CUT IT CUT IT—Blarney Baloney known as Bxxx xhit

uglyoldman rant-Cut Cut shipping our jobs overseas is better rant.

In 2008, total corporations paid 16% of Profits in Income Taxes.
120,000,000 Workers slaved at 28% Tax Rate.
A few million fatso sat a computer keyboard on Wall Street to pay 17% ,

Priorities- What are our Priorities?--How did we get off course building the great nation with a prosperous Middle Class and caring for the less fortunate

History Calls—Rome--Spain--Holland--England ---- now America????

Ignore the huge masses and attend to the very very few richest..

It is known As Redistribution of Wealth and Income up to the few.-
the New ownership of America
Wall Street Of America our new name

Can anyone reading this rant project our next twenty years???

Your numbers please. [e-mail]

[clarence swinney]

10. Addendummm

1945-1% owned 30% Total Finanicial Wealth
1980-20%
1989-36%
10 Billionaires in 1980 and 51 in 1989
2008
1%-43%
10%=70%
20%=93%
80%-7%=120,000,000 workers-Bloody Shafted

Sad Sad can anyone scream rape rape rape rape

dumbpolecat leaders cannot--- too much $$$$$$$$$$$$$$ Wall Street $$$$$$$$$$$$$$$$$

One of my big disppointments
Max Baucus head Senate Finance Comm. I admired his record.
Health Care Reform Bill hit his committee.
First act--Remove Public Option

I did not understand. It was 70% popular in polls.

Then, it was reported he got $1,900,000 from Insurers. Nuff said. sad.

[woo me with science]

13. You should repost these numbers in an OP

with clearer labeling and a source link.

They are devastating.

[gratuitous]

12. Isn't Broder just precious?

"The polls so far suggest that voters have a sensible and realistic perspective on all this {the situation in the Gulf of Mexico}." But for some reason that completely eludes the Esteemed Mister Broder, the President made a prime-time television address. Goodness, what could possibly have motivated him to do something so rash? Mister Broder is mystified! Can't figure it out. Wishes someone would explain it to him.

What a disingenuous motherfucker.

[Uncle Joe]

14. I agree with the substance of the O.P. re: the critical adverse economic issue of corporate

cash hoarding but I also agree with you on all counts re: Broder's bankrupt integrity.

This is just latest example of corporate supremacism exerting it's dominance over "We the People's" government and in turn the American People.

They will starve the economy in order to promote corporate supremacist politicians ie; Bush/Cheney and the adverse cycle will repeat it self, while "journalists" like Broder will caress the family jewels of future, corporatist anointed political "leaders."

[Greyhound]

15. Oh my, I'm sure that "nobody could've predicted this"...

Good thing we poured all the money we could "borrow" into their pockets.

I guess the parasites didn't read the "change" memo.
:sarcasm:

[KillCapitalism]

19. Punish them for not hiring.

Tax them till they bleed.

I only believe in giving them a tax cut if they start hiring people.

[Occulus]

21. We need a corporate income cap. n/t