I keep hearing that corporations are hoarding cash – somewhere abov e $1.2 trillion. That’s a lot of money – and a lot of people are saying that they should be using it to put people to work, creating the jobs our economy needs.
The trouble is, there’s no reason for them to do so. They could hire people to make more products, but people aren’t buying the products they are making now; so if they did that, they would be throwing their money away.
Of course, the reason we consumers aren’t buying stuff is that we don’t have the money ourselves. Either we’re laid off, or our pay is frozen, or we’re afraid of being laid off in the future; and if we’re lucky enough to have a pension fund, it’s lost value. So if the corporations did spend the money to hire people, maybe the people they hired would spend more, and the economy would start to go up.
That’s an iffy process, and a long one. We need a federal jobs program: put people to work fixing bridges, building wind and solar power plants with federal subsidies to help reduce greenhouse gas emissions – and rehire the teachers, health-care workers, police officers, and firefighters that local governments are laying off. That will create demand more quickly and definitely.
What we do not need is tax cuts on business. That will give the corporations even more cash to hoard.
I’m leaving tomorrow for 10 days of vacation, so I may not post for awhile. I’ll be back at it August 23.