11 hours ago
Wednesday, November 3, 2010
IS BUSINESS ALWAYS THE "BAD GUY"?
One of the reporters asked an excellent question. He asked what the administration was going to do to get business on board with job creation when they are just holding on to big profits and not spending or hiring, at least not in the US. Which is true according to an analysis by Robert Reich, former US Secretary of Labor. Reich points out that the Fed's "job program" is designed to keep interest rates low so businesses will expand, exports will increase and consumers will refinance their homes.
But what is really happening is that businesses are sitting on nearly 2 trillion dollars of cash. They are not using the cash to add jobs because they know consumers can't afford more goods and services. Businesses are using the cash to expand capacity abroad, acquire other companies and invest in labor replacing technologies. Cheaper money allows them to do more of the same. So the profits of businesses are higher, they are paying lower and lower taxes, if any, and they are not boosting US employment.
And what is President Obama promising? To be a bigger booster of American businesses. He said he thinks business is too often being painted as "bad guys". “The most important thing we can do is to boost and encourage our business sector and to make sure that they’re hiring.”
Now I don't mind at all if this means small to mid-size businesses who don't have the influence and write-offs that the big guys have. But it is clear that big business and banks don't intend to be good citizens. They are out for short term profit and the country be damned. They say they can't operate profitably within regulatory guidelines, then spend billions on lobbyists and experts who find ways to get around them. They soak their customers, provide shoddy customer service and more and more of them are treating their employees poorly.
So pardon me for not having sympathy for big business feeling like they are being painted as the "bad guys" because, quike frankly, for a lot of years now, they have been working hard to earn that reputation. It is time for that old label of good corporate citizen to come back into play. And for American businesses to step up and play their part in the recovery of the economy.