Fareed Zakaria reports in "Obama's CEO Problem" that, according to the Federal Reserve, "America's 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets." Although this amount is "higher than it has been in almost half a century...most corporations are not spending this money on new plants, equipment or workers." Zakaria notes that "[t]he key to a sustainable recovery and robust economic growth is to get companies investing in America," and wonders "why are they reluctant, despite having mounds of cash?"
I put this question to a series of business leaders, all of whom were expansive on the topic yet did not want to be quoted by name, for fear of offending people in Washington. Economic uncertainty was the primary cause of their caution.
Although corporate recklessness caused the crisis, businesses are blaming government--now that the bailout checks have padded their bank accounts--for their own cash-hoarding reticence. Zakaria admits that, although "[m]ost of the business leaders I spoke to had voted for Barack Obama...all think he is, at his core, anti-business:"
The economic crisis forced the government to expand its authority in dozens of areas, from finance to automobiles. But precisely because of these circumstances, Obama needs to outline a growth and competitiveness agenda that is compelling to the business community. This might sound like psychology more than economics, and the populist left will surely scream that the last thing we need to do is pander to business. But the first thing we need is for these people to start spending their money -- soon.
Crooks and Liars bluntly states that "Corporations aren't happy:"
They're kind of angry, actually, because after all the years of freedom from regulation, they're being regulated. And they're being regulated by a Democratic administration, which means they're actually being effectively regulated.
This restatement of the CEO's "anti-business" concern gets to the root of the issue--that our previous "CEO President" was touted highly by the business community--at least until his policies wrecked our economy:
There are no CEOs in his cabinet, he has no private sector cronies, and he believes in good government. See? Those are core Democratic values. Republicans, on the other hand, worship at the Altar of the Bottom Line, think CEOs should run the country and the world, and DROVE US INTO THE DITCH WITH THEIR BUDDIES CHENEY AND BUSH.
C&L continues by observing that attacks on the unemployed "offer cover for CEOs to duck the true questions about why they'd rather simply sit on the cash and forego expansion...until they have a puppet in the oval office who will do their bidding, who will call off the regulatory dogs..." Remember that the effects of economic insecurity benefit the corporate bottom line--workers are more nervous, more desperate, less likely to complain or go on strike, or do anything to jeopardize that chance at paying their overdue bills and keeping the landlord at bay. Individually, we'll work harder for less because (without a safety net) we have no choice.
As a citizenry, though, we do have a choice--we can vote.
We don't have to hand over the hard-fought gains of the past century (8-hour days, overtime, vacation, sick leave, workplace safety) to the CEOs--we can ignore their corporate-media fearmongering and vote in favor of our fellow workers.
Not much of a choice, is it?
RJ Eskow observes that "Their problem isn't politics - it's customers. As in, they don't have any:"
Business isn't spending because consumers aren't spending. Consumer expenditures are flat and savings rates are up. Households have the same concerns about the economy that CEOs have, and they're reacting the same way: by spending less and hoarding cash. [...]
Banks aren't lending to consumers, either, or they're lending at inflated rates. And thanks in part to the "Greedy Consumer" folktale, there is no political will to pressure banks to write off some of the inflated value of the mortgages on their books. That would free up more money for other spending while potentially reducing the foreclosure rate, and it would distribute the "moral hazard" of greedy behavior a little more fairly. But we're inevitably going to be told it's "politically impossible."
Paul Krugman observes that "peddling scare stories about what Democrats are up to is a large part of what organizations like the chamber [of Commerce] do for a living:"
All the buzz lately is that the Obama administration is "antibusiness." And there are widespread claims that fears about taxes, regulation and budget deficits are holding down business spending and blocking economic recovery. How much truth is there to these claims? None. Business spending is indeed low, but no lower than one would have expected given widespread overcapacity and weak consumer spending. [...]
So where's the evidence that an antibusiness climate is depressing spending? The answer, supposedly, is that this is what you hear when you talk to entrepreneurs. But don't believe it. Yes, when you talk to business people they complain about taxes, regulations and the deficit; they always do. But the Obama's-socialist-policies-are-wrecking-the-economy chorus isn't coming from businesses; it's coming from business lobbyists, which isn't at all the same thing.
"Somehow," writes Krugman, "rather than blaming their peers for bad behavior, C.E.O.'s blame Mr. Obama for 'demonizing' business -- by which they apparently mean speaking frankly about the culpability of the guilty parties."