astute observation -- corporations are indeed showing unprecedented amounts of cash, cash-flow, and profitability
I had been intending to either post on an existing thread or initiate a new thread on the situation
the reason we have not seen an increase in hiring and employment can broadly be attributable to what can be called the Obama factor
recently, Obama's advisors bitch-slapped him on the effects of his policies "Regime Uncertainty"
--
Regime Uncertainty is the explanation for the effects we saw under Obama's Patron Saint, Franklin Delano Roosevelt, when his policies kept the depression going longer than it should have, and also provides the explanation as to why economic development and investment are hindered in third world countries. The uncertainty of governmental policies:
"...I shall argue here that the economy remained in the depression as late as
1940 because private investment had never recovered sufficiently after its collapse
during the Great Contraction. During the war, private investment fell to
much lower levels, and the federal government itself became the chief investor,
directing investment into building up the nations capacity to produce munitions.
After the war ended, private investment, for the first time since the 1920s,
rose to and remained at levels sufficient to create a prosperous and normally
growing economy.
I shall argue further that the insufficiency of private investment from 1935
through 1940 reflected a pervasive uncertainty among investors about the
security of their property rights in their capital and its prospective returns. This
564 ♦ ROBERT HIGGS
uncertainty arose, especially though not exclusively, from the character of
federal government actions and the nature of the Roosevelt administration
during the so-called Second New Deal from 1935 to 1940. Starting in 1940
the makeup of FDRs administration changed substantially as probusiness
men began to replace dedicated New Dealers in many positions, including
most of the offices of high authority in the war-command economy. Congressional
changes in the elections from 1938 onward reinforced the movement
away from the New Deal, strengthening the so-called Conservative Coalition.
From 1941 through 1945, however, the less hostile character of the
administration expressed itself in decisions about how to manage the warcommand
economy; therefore, with private investment replaced by direct
government investment, the diminished fears of investors could not give rise
to a revival of private investment spending. In 1945 the death of Roosevelt
and the succession of Harry S Truman and his administration completed the
shift from a political regime investors perceived as full of uncertainty to one in
which they felt much more confident about the security of their private property
rights. Sufficiently sanguine for the first time since 1929, and finally
freed from government restraints on private investment for civilian purposes,
investors set in motion the postwar investment boom that powered the
economys return to sustained prosperity notwithstanding the drastic reduction
of federal government spending from its extraordinarily elevated wartime
levels...."
http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf
At the meeting I referenced, the initial discussion was on tax cuts, but later expanded:
Professor Martin Feldstein of Harvard University was the first to broach the topic of the Bush tax cuts. He outlined three recommendations to the federal government: expand assistance to those homeowners whose mortgages are "under water" (meaning the debt on their property is greater than its actual value), increase assistance to banks that loan to small business (part of the recently passed
small business bill) and
extend the Bush-era tax cuts for both the nation's middle class and top earners over the next two years, "to keep demand alive at a time when the economy is weak."
William Donaldson, former chair of the Securities and Exchange Commission under President George W. Bush, weighed in at Monday's meeting, agreeing with Feldstein and saying that "uncertainty is depressing aggregate demand" and that the White House needed to provide a "spark to get us off this dead center."
"There's this concern about the business community's attitude about the administration," said Feldstein. "And it's not just the business community -- it's high-income individuals, entrepreneurs and others. The increase in the tax on those individuals is a signal that they're going to have to pay higher taxes, and it may be even more going forward."
Obama at Odds With 2 Recovery Board Advisers Over Bush Tax Cuts
In the discussion, it was clear his advisors felt Obama's policies were not only hindering hiring and investment, but also aggregate consumption by the masses.
I guess I'm again looking for your opinions on an observation I'm making which could be wrong. I'm open for feedback for those with more experience in this field.
It seems to me that corporations are RIGHT NOW sitting on tons of cash and have been doing fairly well in the market. Are they intentionally slowing down the economy in order to MAKE the Obama administration fail? Have they been waiting for a more "user friendly" congress in order to get "their" legislative agendas passed? Have they been "punishing" the American people by not creating jobs and using "confidence" in the economy as a convient excuse?
