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Friday, September 03, 2010

What makes you think they will use this money for hiring?
Posted by Jill | 6:16 AM
So President Doing The Same Thing Over and Over Again and Expecting a Different Result still thinks that more business tax cuts are going to spur hiring:
With just two months until the November elections, the White House is seriously weighing a package of business tax breaks - potentially worth hundreds of billions of dollars - to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Administration officials have struggled to develop new economic policies and an effective message to blunt expected Republican gains in Congress and defuse complaints from Democrats that President Obama is fumbling the issue most important to voters. Following Obama's vacation and focus on foreign policy in recent weeks, White House advisers have arranged a series of economic events for the president next week, including two trips to swing states and a news conference.

"We'll continue to do everything we can, understanding that recovery will require persistent effort. There are no silver bullets," senior Obama adviser David Axelrod said in an interview Thursday. "At the same time, we have to make clear our ideas and theirs, and the fact that the Washington Republicans, having helped create this recession, have attempted to block our every effort to deal with it."

And they will continue to do so. From the very beginning, the Administration has implemented economic policy designed to try to ward off Republican criticism (which comes anyway) and which relies on Republican arguments that if you just shovel enough cash into the pockets of already ridiculously wealthy corporate executives, that they will share it by hiring people. What on earth makes them think this? Certainly not the world of reality:
Anyone wondering where all the economy's jobs are might want to look into piggy banks of the world's biggest companies.

Cash is gushing into companies' coffers as they report what's shaping up to be the third-consecutive quarter of sharp earnings increases. But instead of spending on the typical things, such as expanding and hiring people, companies are mostly pocketing the money and stuffing it under their corporate mattresses.

Non-financial companies in the Standard & Poor's 500 have a record $837 billion in cash, S&P says. That's enough to pay 2.4 million people $70,000-a-year salaries for five years. For context, 2.2 million to 2.8 million jobs were saved or created by the $862 billion stimulus that President Obama signed into law in February 2009, according to a report released in April from the Council of Economic Advisers.

Rather than investing in their future, companies are piling up cash and collecting practically zero interest on the money, hoping there will be a better time to invest later.

Barack Obama could come up with a plan to cut business taxes to zero, eliminate the Department of Education, the FDA, the EPA, and every other government agency that Republicans say "stifles business", and they would STILL call him a socialist communist Muslim terrorist. For nearly two years we have seen an Administration completely in thrall to Wall Street in the form of Tim Geithner and Larry Summers, to the worst elements of the Republican Party, and to ConservoDems who care more about keeping their government paycheck than about doing what's right. The tragedy is that he's going to pay a heavy price for selling out the middle class this November, and the even worse tragedy is that he's going to respond by shoveling even MORE cash into the pockets of already rich corporate executives.

The slogan of the Democratic Party and this president this season is "We suck but they're crazy." Sorry, but that just won't cut it. Perhaps it's time to just sit back, figure we had a good, if too-short run, grab the popcorn, and watch as it all falls apart. Because there is no one in power who will stop it.

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Blogger Barry said...
Corporations are sitting on huge piles of cash because of economic uncertainty. Will there be a double dip? Will the Bush tax cuts be allowed to expire? Will there be further tax hikes to rein in the massive deficits projected as far as the eye can see? And how do companies cost compliance with Obamacare, still largely unknown? It's not greed so much as fear and caution.

I'll agree that a couple of temporary tax breaks here and there won't break the logjam, though. An ironclad promise not to raise taxes might, but then you'd still have the enormous budgetary shortfalls to deal with, and your only option would be to cut spending, and, well, nobody wants to do that except for Paul Ryan.

Anonymous Anonymous said...
The rich have had their tax cuts for years.
That didn't work either, except to increase their wealth.
Time to try something new.