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Conservatives routinely declare that businesses can't hire anyone because tax burdens are too high (or "uncertain"--the bete noir of the day) and the way to create jobs is to give business more money.
Conservatives routinely declare that businesses can't hire anyone because tax burdens are too high (or "uncertain"--the bete noir of the day) and the way to create jobs is to give business more money. Among other things, corporations have launched a new campaign in Washington for a tax repatriation holiday that would allow businesses to bring home as much as $1 trillion in offshore profits at a very low-tax rate, cash they say could be used to create jobs and boost the economy.
But business already has plenty of cash, and if you look at what corporate America is actually doing with this money, it's not pretty.
In 2010, businesses in the U.S. were sitting on $2 trillion in cash (a record high percentage of assets) and when we look at the global picture we see that the top 1,000 non-financial companies in the world are still sitting on more than $3.4 trillion in cash. In case you were wondering what happens with that cash, cash does not create jobs--investments do and investments don't happen without consumer demand. Thus, giving business more money leads to bigger numbers in checking accounts, not jobs.
Maybe things have changed in 2011? As the economy inches back to health, how are these companies deciding to spend all this pent up cash? The Federal Flow of Funds reports that the ratio of nonfinancial corporate cash assets to total assets has actually continued to grow through the second quarter of 2011. The biggest growth is in checkable deposits and currency which has risen 51 percent since the second quarter of 2010. So not only are businesses refusing to hire workers, they're buying currency in a bet against America in the hope that the dollar will fall.
But aren't businesses doing something productive with that cash? Well, yes. Not only is corporate America using cash to fill space in bank boxes and stuff speculative mattresses overseas, they have decided to use some of it to pad the salaries of their CEOs. In 2010, the S&P 500 companies paid their CEOs an average of $11.4 million--an increase in CEO total compensation by 23 percent! This collective raise could have hired nearly 32,000 median earning workers instead (or 63 workers per company).
Using the public purse to give even more tax break cash to businesses is exactly the wrong move. This country needs investments such as that called for in Conyers' jobs bill, not cash hoarding, asset speculation, and CEO raises. The best investment the public purse can make right now is jobs.
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Conservatives routinely declare that businesses can't hire anyone because tax burdens are too high (or "uncertain"--the bete noir of the day) and the way to create jobs is to give business more money. Among other things, corporations have launched a new campaign in Washington for a tax repatriation holiday that would allow businesses to bring home as much as $1 trillion in offshore profits at a very low-tax rate, cash they say could be used to create jobs and boost the economy.
But business already has plenty of cash, and if you look at what corporate America is actually doing with this money, it's not pretty.
In 2010, businesses in the U.S. were sitting on $2 trillion in cash (a record high percentage of assets) and when we look at the global picture we see that the top 1,000 non-financial companies in the world are still sitting on more than $3.4 trillion in cash. In case you were wondering what happens with that cash, cash does not create jobs--investments do and investments don't happen without consumer demand. Thus, giving business more money leads to bigger numbers in checking accounts, not jobs.
Maybe things have changed in 2011? As the economy inches back to health, how are these companies deciding to spend all this pent up cash? The Federal Flow of Funds reports that the ratio of nonfinancial corporate cash assets to total assets has actually continued to grow through the second quarter of 2011. The biggest growth is in checkable deposits and currency which has risen 51 percent since the second quarter of 2010. So not only are businesses refusing to hire workers, they're buying currency in a bet against America in the hope that the dollar will fall.
But aren't businesses doing something productive with that cash? Well, yes. Not only is corporate America using cash to fill space in bank boxes and stuff speculative mattresses overseas, they have decided to use some of it to pad the salaries of their CEOs. In 2010, the S&P 500 companies paid their CEOs an average of $11.4 million--an increase in CEO total compensation by 23 percent! This collective raise could have hired nearly 32,000 median earning workers instead (or 63 workers per company).
Using the public purse to give even more tax break cash to businesses is exactly the wrong move. This country needs investments such as that called for in Conyers' jobs bill, not cash hoarding, asset speculation, and CEO raises. The best investment the public purse can make right now is jobs.
Conservatives routinely declare that businesses can't hire anyone because tax burdens are too high (or "uncertain"--the bete noir of the day) and the way to create jobs is to give business more money. Among other things, corporations have launched a new campaign in Washington for a tax repatriation holiday that would allow businesses to bring home as much as $1 trillion in offshore profits at a very low-tax rate, cash they say could be used to create jobs and boost the economy.
But business already has plenty of cash, and if you look at what corporate America is actually doing with this money, it's not pretty.
In 2010, businesses in the U.S. were sitting on $2 trillion in cash (a record high percentage of assets) and when we look at the global picture we see that the top 1,000 non-financial companies in the world are still sitting on more than $3.4 trillion in cash. In case you were wondering what happens with that cash, cash does not create jobs--investments do and investments don't happen without consumer demand. Thus, giving business more money leads to bigger numbers in checking accounts, not jobs.
Maybe things have changed in 2011? As the economy inches back to health, how are these companies deciding to spend all this pent up cash? The Federal Flow of Funds reports that the ratio of nonfinancial corporate cash assets to total assets has actually continued to grow through the second quarter of 2011. The biggest growth is in checkable deposits and currency which has risen 51 percent since the second quarter of 2010. So not only are businesses refusing to hire workers, they're buying currency in a bet against America in the hope that the dollar will fall.
But aren't businesses doing something productive with that cash? Well, yes. Not only is corporate America using cash to fill space in bank boxes and stuff speculative mattresses overseas, they have decided to use some of it to pad the salaries of their CEOs. In 2010, the S&P 500 companies paid their CEOs an average of $11.4 million--an increase in CEO total compensation by 23 percent! This collective raise could have hired nearly 32,000 median earning workers instead (or 63 workers per company).
Using the public purse to give even more tax break cash to businesses is exactly the wrong move. This country needs investments such as that called for in Conyers' jobs bill, not cash hoarding, asset speculation, and CEO raises. The best investment the public purse can make right now is jobs.