The random political thoughts thread (Part Deux)

[scaeagles]

Uh, yeah. I can say it with a straight face.

Why else is cash on hand for corporations at such a record level? Why are they not reinvesting in their business to make more money?

From the International Business Times -

According to the Federal Reserve, U.S. corporations held a record $1.93 trillion in cash on their balance sheets in 2010. But they are not investing to expand their companies, grow the real economy or create good middle-class jobs, the report says.

I think Steve Wynn might know a thing or two about business.....from a recent rant of his -

And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems, that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration.And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America.

Straight face? Certainly. I am amazed that you can dismiss it with one.

[Strangler Lewis]

Yes, before Obama, Americans would hit on a 16. Now, not so much.

Right or wrong, I think it's funny to see Steve Wynn quoted as an icon of financial stewardship.

[Alex]

I'm amazed that anybody would ascribe so complex a thing as the national increase in corporate cash holding to one single dominating factor.

Other important factors: deleveraging to reduce short-term paper costs, poor economic conditions for repatriating cash in foreign markets, and simple uncertainty about the long term future for improving consumer demand all play huge factors. While fear of uncertain new regulation has impacts, that would perhaps explain why they are slow to hire, but not so much why they are leaving the money in cash.

Frankly, when someone who knows better reduces a complex situation to a simple one, I assume it is a negotiating maneuver. Blame all the bad stuff on over-regulation to get your way, then next year blame all the same bad stuff on whatever the next thing you want to change is.


(Not to mention that the increase in cash holdings by U.S. corporations has been a multi-decadal trend that has only seen an increase in recent years not a fundamental change. How scared were the companies by Reagan that they started doing this in the '80s.)

[scaeagles]

True, Alex, I did relate holding cash with a fear of regulation, and that wasn't really very applicable to the original jobs issue that was being discussed. I apologize.

It (regualtion) is related to hiring though.

[Strangler Lewis]

I'm a solo practitioner, and the burdens that would come with potentially hiring a bit of clerical help would give me pause. However, at the mega-corporate level, isn't the "fear" of spending to create jobs because of burdensome regulation a bit of a pose, a hostage taking, a taking of one's ball and going home, a holding of corporate breath and turning blue to get one's way?

[innerSpaceman]

Yeah, it probably has nothing to do with health care for that job hire costing $22,000 per year, on average. Must be the unknown potential of that new hire costing $22.50 in possible regulatory expenses per employee. Yeah, that's it.

[scaeagles]

I'm just curious because I don't know.....how much more is that than when unemployment was in the mid 5% range 3 years ago or so? I really don't know....an increase of 10%? 50%?

[scaeagles]

$22,000? Here is what I found. Not even close.

The report projects average health care cost per employee will rise to $9,821 in 2011, up from $9,028 in 2010. Employees will pay $2,209, or 22.5 percent of the total premium, up 12.4 percent from 2010.

[Betty]

Originally Posted by scaeagles

$22,000? Here is what I found. Not even close.

We pay almost $9600 a year for health insurance - and that's with the employer paying part.

We didn't pay quite that much at his previous job- $8400 a year.

Family of 4.

It's our next highest expense after housing.

[Morrigoon]

Anybody else paying attention to what's going on in Libya today? Quite a bit going on. Who'd have thought, all these years later, we'd STILL be talking about Kadaffi? (giving up on attempts to spell it...)