The left has a new talking point exemplified by this excerpt from a post at DemocraticUnderground.com:
"Big corporations are enjoying VERY robust profits and are sitting on trillions in cash reserves. But they are not expanding and hiring, at least not to the levels they should."
Juan Williams just got through saying basically the same thing on the Sean Hannity Show a few minutes ago. During a newsbreak, I heard the ABC News announcer say virtually the same thing.
This new talking point betrays the left's distrust of the free market and it's infatuation with government overseers and spenders. In the post above the writer presumes to know the levels at which business should be "expanding and hiring." He also presumes to know better than the business owners and directors themselves. Unspoken is the implication that "big corporations" are sitting on trillions in cash reserves because they are greedy, profit-hungry goliaths that are preventing the little guys from sharing in this cash reserve bonanza. Also unspoken is the presumption that these trillions in cash reserves should be taxed away from the private sector and spent by the public sector because those in Washington know best how trillions in cash reserves "should" be spent.
Leftists like Juan Williams who spout such collectivist nonsense should be challenged with a basic and simple question: Who has the right to determine how money should be spent? The individuals who own that money? Or politicians and bureaucrats?
In other words: Do you believe in the principle of private property, or not?
Mr. Williams was recently awarded a $2-million contract by Fox News. Who does Mr. Williams think has the right to determine how that $2-million in private property should be spent or invested? Mr. Williams himself? Or federal bureaucrats and politicians?
I suspect corporations are sitting on trillions in cash reserves for the same reason the mass of American individuals are sitting on trillions in cash reserves: uncertainty. Before business invests capital in expansion and hiring, it must be confident that the return on such an investment will be worthwhile. Apparently, business is not confident that their return on investment in expansion will be greater even than the paltry interest earned on savings. This is how pathetic the business climate is in this country at the moment.
The investment climate in this country is not much better. Why should an individual with investable cash bet on today's chancy and lackadaisical market? The demand to hold cash is high no matter who you are. This is why individuals hesitate to spend their disposable income. People sense crisis around the corner. They are preparing to deal with this crisis as best they can.
The only spendthrifts in today's economic climate are politicians and bureaucrats. They can afford it. They're playing with house money, i.e., money they've either extorted, borrowed or printed.
2 comments:
My foray into your post above got me into this post. I agree with you completely.
In Robbing America's post, "The Council of the Courtiers", we touch into the subject of 'return on investment' as part of the suggestion of Mr. Inmelt and Mr. Chenault about "....demanding that all commercial buildings become energy efficient" as a job creation idea. We, of course, are not to kind to this brain-trust.
I read your article and agree with it.
It was a surprise about Ken Chenault. I have always admired FedEx.
I've been in business for years. The secret to creating jobs is sell enough product or service to justify expanding your business.
That's easier said than done, especially when customers would rather hold money than spend it, due to uncertainty about and fear of the future.
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