A few weeks ago Fareed Zakaria (who aspires to see a Post-American world) wrote an article noting that US companies are not hiring while they are sitting on $1.8 trillion on their balance sheets.
The Federal Reserve recently reported that America’s 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets. By any calculation (for example, as a percentage of assets), this is higher than it has been in almost half a century. Yet most corporations are not spending this money on new plants, equipment or workers.
But then Zakaria puts his ignorance of economics to work
Were they to loosen their purse strings, hundreds of billions of dollars would start pouring through the economy. These investments would probably have greater effect and staying power than a government stimulus.
That’s true, but loosen the purse strings to do what? Hire employees? To do what? Where’s the demand for the products those workers will make?
To be clear: There is a strong case for a temporary and targeted government stimulus. Consumers and companies are being very cautious about spending. Right now, government spending is keeping the economy afloat. Without a second stimulus, state and local governments will have to slash spending and raise taxes, which will produce a downward spiral of higher unemployment, slower growth, lower tax revenue and a larger deficit. Joel Klein, the New York City schools chancellor, told me that when the stimulus money runs out at the end of this year, he will be forced to lay off 5,000 teachers. Multiply that example a thousand times to get a sense of what 2011 could look like.
This part really pisses me off. We will print money to keep state and local governments (translation: unions) afloat with deficit spending.
Who’s going to keep them afloat next year????
That was the very question many of us asked when Congress rammed that first stimulus package through. Money was spent to keep states and cities afloat. That money contributes to the national debt which will in turn demand higher debt servicing and eat more of the federal budget. It appears that under Obama we’re going to need a stimulus every year.
That won’t work.
Why would anyone want to loosen their purse strings? Obama is the most anti-business President in the history of this country. He does nothing but demonize business.
And that’s why people don’t hire. They’re afraid.
Even Jeffrey Immelt, CEO of GE, who has his head so far up Obama’s rump that he wouldn’t know day from night said that Obama was out of sync with entrepreneurs. Obama has forced down our throats two unpopular laws- health care and financial reform. No one really has any idea how badly these laws are going to affect business and Obama would love to cram Crap and Trade down our throats, which would paralyze the country.
And the idiot wonders why no one hires. He also thinks government workers are superior to the private sector:
But all think he is, at his core, anti-business. When I asked for specifics, they pointed to the fact that Obama has no business executives in his Cabinet, that he rarely consults with CEOs (except for photo ops), that he has almost no private-sector experience, that he’s made clear he thinks government and nonprofit work are superior to the private sector. It all added up to a profound sense of distrust.
So what is Obama to do with companies sitting on all this capital and not hiring?
Tax the crap out of retained earnings.
I knew this was coming and Van Jones spilled the beans.
We can expect Democrats to start badmouthing the “greedy” corporations and extolling the need for them to “pay their fair share.”
If Republicans don’t take back control of at least one House of Congress Obama will render this country into a third world nation- something none of our parents would recognize.
Democrats often accuse Republicans of not having a plan, of being the party of ‘No.”
Stopping Obama is a plan, and “No” is a good party as you watch what’s happening now. This country did not become great by emulating Europe. It became great by being different from Europe.
FDR- “The only thing we have to fear is fear itself”
Reagan- America is “A shining city”
George Bush- “Great tragedy has come to us, and we are meeting it with the best that is in our country, with courage and concern for others because this is America. This is who we are.”
Barack Obama- “We are five days away from fundamentally transforming the United states of America”
He meant every word of it. Obama would like nothing more than to be the first post-American President.

DrJohn has been a health care professional for more than 40 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 45 years and has three kids- two sons, both of whom are attorneys and one daughter who is in the field of education.
DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.
Except for liberals being foolish.
Right about this time next year Mr. Obama will be telepromting us with ” the economy may be crashing, but without the tax increase, we would be in REAL trouble. “.
Never let the truth get in the way of your agenda……
I foolishly listened to that snippet of Van Jones, expecting to hear something about taxing corporate earnings. Nothing there. Ah, well. Nothing like working ourself into a rant about what someone might do, with absolutely zero evidence that he has any intent to do so.
Vann Jones knows doesn’t speak accounting language. He does speak transfer of wealth.
In 1937 we went through the “recession in a depression”. The Keynesians will tell you it was caused by FDR’s suddenly trying to balance the budget. It wasn’t — it was caused by FDR’s deciding to tax unspent business capital. This gang not only doesn’t have any new ideas, the old ones they borrow suck.
No doubt that the obama regime wants to get their hands on corporate savings – just as they want to take control of the 401(k)s (for your own good, of course).
They actually believe that corporations and “the rich” are bottomless money-pits, and will keep on producing no matter how much is stolen from them. Evidently, no one in the regime realizes that the corporations and the “rich” are able to fold their tents and walk away from this country at any time.
Sitting on $1.8 trillion dollars out of fear of higher taxes probably has an element of the self-fulfilling prophesy about it: It forces more government spending to keep the economy from totally locking up, which in turn guarantees either higher taxes, the invisible taxation of inflation, or a combination of the two.
This is what comes of cynically using constant negative messages about the state of the nation’s economy as a political tool. Doing so frightens consumers to the point where they cease discretionary spending. It frightens lenders until they cease to lend, and frightens investors into “safe havens” that do little or nothing to turn the wheels of business and industry.
This is one of the central mechanisms that’s being used to work for the failure of the Obama administration. Optimism about national economic recovery is not what his opponents want at this point. Doom, gloom, and increasing uncertainty about the future all work to his opponents’ advantage. It doesn’t matter if that’s the primary toxin that’s making and keeping the economy sick.
Doom and gloom, I say it’s more reality staring the public in the face with this economy, our yearly income was reduced $28,000 last year and hubby’s hours are still cut. Fortunately we don’t have a mortgage, car payments or credit card debt, we will get by but we aren’t out there spending. I tore out one of my larger flower beds and planted veggies to harvest and freeze, cut back on gifting, eating out, driving, and am concentrating on being very thrifty.
Growth for next year is expected to drop to less than 3%, it takes 3% growth just to create enough jobs to keep pace with the population increase, 5% to increase employment by 1%…. per an AP article I read this morning. They also said it won’t be until 2015 that employment rates fall to 5%. IMHO that won’t happen until we throw the tax increasing spenders out of power!
So, I don’t doubt that many consumers are in the same boat as hubby and me, taking income reductions instead of layoffs and we all don’t know for how long. All leads to reluctance to spend, that’s reality, not politics.
@DrJohn
The language that Van Jones speaks is one of slavery. Every man must live for the sake of others, hence, no man living for themselves. This is not the language that one speaks when talking about individual freewill.
@Greg
It is not the ‘doom and gloom’ which is holding back the waves of economic activity, but rather, the uncertainty of punitive measures such as the relaxing of the Bush tax cuts, effects of Obamacare and effects of the Frank/Dodd financial bill. Small businesses especially are affected negatively and will not do anything more than try to maintain where they are. No hiring, no reinvesting in their business, no expansion.
@johngalt:
What I left out of our personal story was that my brother-in-law runs our family business. He brought the old timers in and put it out to them, either we lay off or cut hours, he then let them decide. Knowing the young whipper-snappers had young children, big mortgages and new financed vehicles for both them and their wives, they voted to take the cut rather than see the other employees suffer.
An example of “shared sacrifice” that may have been “just words” at the time for Obama, but a sacrifice indeed for those putting it into practice.
@Missy
I would suspect that if those old-timers really thought about things, they would state unequivocally that they acted in their own selfish, self-interest rather than ‘feelings’ of concern over their fellow employees. The funny thing is, when people act in their own selfish, self-interests, having truly thought situations through, the effect is one of having provided his fellow man positive benefits.
True selflessness and sacrificing yourself for your fellow man does not lead to anything other than enslavement. Van Jones’ words are meant to convey feelings of guilt upon the haves, and feelings of entitlement to the havenots. In other words, living life for other men and not yourself. Enslavement to other men. I, for one, will not willingly surrender my will to the thoughts and desires of someone else. I can think of no worse way to devalue your own life than that, and as such, I don’t feel any guilt by holding back what I’ve rightly earned for myself.
johngalt: right you are, thoses who can be on top of busyness and fonction well, dont need to be told where to put some money to charity, that’s wath make a diversity of charitable
organisations who profit from the whealthof richers peoples, IF they,the government,
start to take from them, you break that multi diversity ring, and only the GOVERNMENT decide who get it, that is not from this AMERICA a very good idea, SPECIALY when you see how hungry for money,the OBAMA company is.
HE want to be the one to decide and give so to get the recipients bowing to him.
where the whealtys have most of them work many more hours than their employed
and their UNIONS to build up their business,they are showing to be smart enough
to spend to or where or give to who they choose, this will belong to them only.
bye
SO the money makers to my deduction, are waiting for the rREPUBLICANS to take CONGRESs,
if they give their support :WELL IT WILL HAPPEN for sure, that’s where the ENERGY should be spent on,starting now.
@Missy.
I wish the I.A.M. Union senior members would have the backbone or the cajones to take a hefty pay cut to their bloated yearly pay packages but most are still out there screaming for increases to the contracts for various employers. It may not have saved my job due to my seniority levels, but they would soon learn that things isn’t peaches and ice cream for the business they work for.
On the topic at hand, these retained earnings are monies have already been taxed before becoming “retained” from various activities. What this tax would be the equal of taxing a person’s private savings account each time that person deposits the pay check that’s already been taxed for Federal and State reasons, and for many businesses who run as a sole proprietorship or a partnership proprietorship that savings account is going to be hit hard if it’s considered business retained holdings and that alone will cause some businesses to reallocate the funds and shut shop causing people to be out of a job.