One thing in the defense of corporations, is that there's a lot of policy uncertainty. The rules for both the Healthcare law and the FinReg law are still being written out, and those are going to have big impact on Corporate America. That and the tax debate. The Fed just needs to get through this stuff as quickly as possible.
I guess he was wrong in that he erred on the side of caution. At first glance it looks more than 2:1.
I said, "Jobs in manufacturing and production have moved overseas. " You said " Manufacturing employment has gone down" Ok, so, um, we disagree how? If you are, say, in a rust-belt economy, or Detroit, or most of the urban centers of our country, your job may have been moved overseas in the 70's. Japan, China, India, Vietnam - the low-education good-training solid middle-class jobs are gone, for the most part, forever. Yes, they've been replaced by technically skilled, high-education and training jobs that pay more. But that easy ticket to the middle class has disappeared. Good luck with your IPO. Hopefully you're selling something the Chinese can buy.
I think you are missing my point. People are doing everything they can to politicize a bad economy. Vfish (who you can trace the original post to) is exhibit A. The talking point goes that businesses are hoarding cash and not spending and investing because Barack Obama is a very bad man. You know and I know that businesses are making their decisions based on the market realities. In a really bad economy, they cut to the bone and become far more efficient. When things turn north, they are very slow to add back full time staff and will get more out of current employees and then employ temps to bridge the gap. Similarly, its not like companies are deciding not to build a new plant or launch a new product because of health care reform. If they KNEW that people would line up to buy it, they would spend the money. They are hoarding cash and not spending or hiring because of uncertainty caused by a bad economy. Would they like to know more about financial regulation and health care implementation? Sure. But to argue that they are paralyzed because of Obama policies is like topper coming in here to argue that he doesn't want to make another $100,000 because his marginal rate will go up 4.6%.
Do you find this surprising? People want to link one man to any bad event, so that man may be brought to justice. Look no further than BP and the Gulf spill.
He's not paying me to be his research assistant. Your link had one very, very nice funny. I'd love to see a correlation to Bush voting states in 2004. I bet you'd see that the debt loving federal voters of 2004 would have a hatred of debt at the state level. And I'd loooove to see that state debt data correlated with falling housing prices. My spidey sense is that you'd see an even stronger correlation. It's interesting information, but obviously a machete rather than a scalpel. I know which I'd rather have the doctor using when he's doing an operation on me.
I posted this already here, but again: http://chuckdevore.com/2010/08/something-for-nothing-state-debt-and-the-2008-presidential-vote/
I am suggesting that during tough economic times businesses should be expected to be prudent in how they spend their money. I find it ridiculous to hear people look at a general statistic like, "businesses have X number of dollars sitting in their account" and based on that they say, "well, businesses have all this money sitting there, they should be spending it and investing it". It is reckless to spend money for no reason other than the fact that you have it. You have to evaluate and decide when is the right time to make investments, and right now, during a time of uncertainty, may not be the best time for a business to spend money. Right now is a time to be cautious. Particularly looking at financial institutions, one of the reasons that made the economic downturn worse than it should have been is precisely that they overspent and they invested in projects they should not have invested in and gave loans that they shouldn't have given. If you have some money that you can afford to invest, it is wise to wait for the right time and the right opportunities. It is not wise to spend and invest just because the money is in your account. And, particularly during tough and uncertain times, it is wise to keep some liquidity. The economy is cyclical, and if a business is patient, the right time and the right opportunity to invest will come.
Did you also know there's a strong correlation between states that vote Republican and states that get more federal money than they pay in taxes?
It's not that America's economy is crap. The reason why jobs moved overseas is that the American economy was way too strong, in relative terms, compared to that of most of the rest of the world. For various reason unique to the 20th century, none of which were realistically sustainable over the long term, America's economy became ridiculously wealthy in comparison to that of the rest of the world. One could say that the difference in wealth between America and most of the world was frankly obscene. It was inevitable that once the rest of the world started sorting itself out and developing, that the field was going to start leveling out, and it is inevitable that it will continue to do so even more in the future. That is the reality that many Americans don't want to hear. You cannot avoid this reality by building walls and adding tariffs and by closing out the rest of the world. You make some good points. But people have to realize that it's up to them to make their way through life. If you are American, you can't always expect that you'll be richer than others because you live in a richer country than others. We can't look to the government to solve our problems, we can't look to "the rich" and businesses and their investments to solve our problems. We as individuals need to realize that we have our own role in society, and we are all little chess pieces in the global economy, and we need to find our role and our place. We need to make ourselves as individuals competitive and give ourselves the skills that will enable us to make a living and contribute in today's world. Surely our economy needs "the rich" to invest and it needs the government to have some role in order to give us some protections. But we are the only ones ultimately responsible to find work and a positive role for ourselves in society, we are responsible to help build ourselves and in doing so help build our society. For ********'s sake I'd like to see people everywhere stop blaming the rich or businesses the president or city hall or anybody else, and take the time to improve themselves! Ultimately is up to each of us as individuals. If more of us are able to find our place in the world in which we can be productive, then the economy will be stronger, and both the nation and the world will be wealthier.
What I actually said is ”An administration that is giving business higher labor costs, higher taxes, and is increasingly antagonistic to investors and you wonder why the private sector isn't hiring and is hoarding cash?”. The blog link you apparently couldn’t be bothered to read reiterated those “talking points”. So why are we cutting back investment? I run a very low margin service business. Here is a simplified calculation: We make, say, 8% of revenues before taxes and accelerated depreciation. 50% of our costs are labor, and the new health care law may raise our labor costs by 8% or even more. A four percentage point cut in margins is not a big deal to Microsoft, but it is to us. Until we figure out how this all will play out, we are still investing but only in above-average opportunities.Hmmm, higher labor costs and marginal rates apparently do affect hiring decisions. Go figure.
Then then you should be pissed every single time Republicans block tax cuts for small business... I suppose... I'm so sick of people with these horsesh!t conservative backwards views trying to be intellectual about the economy. Economics is not a fu**ing science... it's an art... it revolves around a faith in the currency... not shitty little numbers... period... No one has faith in anyone who thinks that money should be pooled. A dollar has more value when it reaches as many hands a possible... done. MACRO you f**ks
Amen, brother. That is why I feel America is on a steady decline. For thirty years or more, we've been pretty much coddled by the left and the right. The left wants to give handouts to citizens and non-citizens pretty much indefinitely - just keep getting all the free stuff you want. The right wants to give handouts to corporations indefinitely as well, and if you're not getting what you think you deserve, then the right will be quick to jump on the "blame the others" crowd - either blame the nearest minority, the nearest muslim, or the nearest liberal. If the evangelicals and the republicans spent 1/10 as much time helping others as they do demonizing homosexuals or muslims, America would be better off. If liberals spent 1/10 as much time cleaning up their own parks and schools and neighborhoods as they did bitching that the government isn't doing enough, America would be better off. But that would take actual effort, and prying yourself away from the internet/TV/video game to make a difference might put a dent in corporate profits. Get out there and consume, people! This economy ain't going to fix itself!
bullshit. Those same companies were hiring 3 or 4 years ago and all of the negative reasons he mentions in that article still existed then. What a bunch of crap, Republican talking points. http://www.kiplinger.com/businessre.../health-care-reform-tax-hikes-on-the-way.html Here are the tax changes associated with the health care law. The increases in Health Premiums were done BEFORE the the health care law was voted on. http://www.kaiserhealthnews.org/Dai...ndividual-health-insurance-rate-increase.aspx. Fleischer is lying.
So, because their hiring practices produced such fruitful results in the time since, they should continue their ways? Do you know what the definition of insanity is?
Cheers. I'm not sure why people find this hard to believe. http://online.wsj.com/article/SB100...419231591024478.html?mod=WSJ_newsreel_opinion
Mostly because the Administration hasn't really handed higher labor costs or higher taxes. Health Care will somewhat affect corporate America because it taxes higher cost plans, and taxes companies that DON'T offer health care coverage. FinReg only levies a tax that affects the baking industry. Not Corporate America at large. Please list the increased cost of business and the new, higher, taxes. Thanks.
Yes, uncertainty in the tax code has led him to be frugal. If I understand you're view, do you believe that business should recklessly throw money around and invest for the "good of the economy." As ASF put it, if it were your money what would you do?
And it increases premium costs because it increases demand without increasing supply Yeah, because corporate america doesn't use banks as a vital service
It's too bad that the republicans didn't jump in and work with democrats on cost controls that would have addressed this and would have been . . . . wait for it . . . . . GOOD for the American people. Instead, we had a process where special interests were able to exert influence on a couple of key people who had way too much power over the process. If they really care, this can be fixed in a second round of legislation. Of course, to do that, they have to accept that reform was needed and stop with the ridiculous "repeal" bullshit. On the whole tax issue, of course taxes factor into business decisions, but businesses (including small business) did just fine in the 90s. They did just fine in the 40s, 50s, 60, and 70s with much higher marginal rates. For every one example of someone working on a razor thin margin like vfish posted, there IS Walmart (which the guy used in his whoa is me story) that can and will pay its fair share. The discussion shouldn't revolve around how we can create the absolute best climate for that small percentage of owners living on the edge to the detriment of society as a whole, but how we create a climate where businesses can thrive and we can fund the things we want -- again, this conversation takes place in a vacuum when people are questioned about what they would cut. Did you see Boehner (looking oranger than ever) fidgeting on Sunday when Chuck Todd asked him how he would pay to maintain the Bush tax cuts? He couldn't even say with a straight face that maintaining those cuts won't add to the deficit. Now, the late 90s were NOT Utopia in America, but in my mind, we had struck a balance on taxes that was working quite nicely. Seeking to return to some of those bedrock issues, including top marginal rates, seems to make some sense.
Because it's not completly true http://www.washingtonpost.com/wp-dyn/content/article/2010/08/06/AR2010080606238_pf.html This White House has "vilified industries," complains the U.S. Chamber of Commerce. America is burdened with "an anti-business president," moans the Weekly Standard. Would that all presidents were this anti-business: According to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter -- an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter and is up by 13 percent against 2009. And the Obama administration has cut taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money. http://blogs.wsj.com/economics/2010/07/26/economists-try-to-measure-uncertaintys-impact-on-growth/ Federal Reserve Chairman Ben Bernanke told Congress last week he didn’t know how strong an impact uncertainty had on the economy. Treasury Secretary Timothy Geithner mentioned it on the Sunday morning talk shows. The challenge is that policy makers may not be able to do much about removing uncertainty. Economists worry that this unique recession and the squabbling in Washington may be making the future less clear than during similar stages of past recoveries. Indeed, exactly what role uncertainty plays in business decisions is hard to gauge. The long-held notion is that executives take a “wait-and-see” stance in the face of uncertainty. Former Fed chief Alan Greenspan once said that the inability to understand external events “almost invariably induces fear and, hence, disengagement from an activity, whether it be entering a dark room or taking positions in markets.” That assumption may be wrong, according to research done by Ruediger Bachmann of the University of Michigan, Eric Sims of the University of Notre Dame, and Steffen Elstner of the University of Munich. Their research, published on the National Bureau of Economic Research website, found no evidence that changes in uncertainty cause a wait-and-see effect, defined as a large decline in economic activity when uncertainty hits followed later by fast rebounds.
That's now what he was answering. The question put to him was why wasn't he hiring NOW. He made shit up, when the real answer is because...well there is no answer to that. At some point there will be a tipping point. But this guy just took the opportunity to bash Obama - inaccurately. And the WSJ is just playing to its audience - as usual.