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.
3 comments:
This is a great post, Susan. There has to be room for good corporate citizenship and profits. I want to hope things will improve, but if there isn't some negative pressure applied via taxes or tariffs, what's the incentive for business? They haven't been willing to help the country out in a crisis so why would they change their minds now just because of the election? (That's been Joe Scarborough's contention - after the election, business will stop holding onto their money.)
With globalization, business doesn't need us as workers or consumers anymore. Not like before.
Thanks for another great post. I agree with you entirely.
But I think it is the problem of the way the American public views the corporations. You can not think that business has any type of conscience! People have to get that through their brains! Business exists to make profit and make profit for its stock holders that is all it is about. Period. In the past the citizens have got benefit from this in terms of jobs and innovative products or services. Companies to not set up or change policy to give people jobs that is not what they are about.It angers me that people sit around thinking the companies will suddenly start being empathetic when it is really like watching the wolf go into the hen house and expecting a different result!
Most of the truly large corporations aren't "American" businesses any more - GM makes and sells more cars in other countries than it does here, for example, and for the major petroleum companies (to use another example) the US is just one of multiple markets -- so it never surprises me when they shaft us. Obama's problem (if you can call it that) is he's drunk the Reagan trickle down kool-aid without realizing it -- he's young enough to have spent most of his adult life hearing over and over that business is always the good guy, and that government can never work as well as the private sector. He's been inculcated with that mindset so thoroughly that even if intellectually he might see the flaws, he's still got a huge mental block about actually using the government to (how's this for a wild idea?) actually govern. Hence his leaning on Wall Street hacks like Bernanke while ignoring economists and policy wonks who actually have a grasp on reality (Krugman, Reich, etc.).
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