Archive for the 'Private-Sector Boondoggles' Category
Friday, July 9th, 2010
A Headline Worth 1,000 Words
“U.S. Firms Build Up Record Cash Piles“
Under that headline, The Wall Street Journal reports this:
U.S. companies are holding more cash in the bank than at any point on record, underscoring persistent worries about financial markets and about the sustainability of the economic recovery.
The Federal Reserve reported Thursday that nonfinancial companies had socked away $1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier and the largest-ever increase in records going back to 1952. Cash made up about 7% of all company assets, including factories and financial investments, the highest level since 1963.
And, of course, this:
The comfort of having cash on hand, though, comes at a high price companies may not be willing to pay for much longer. They are earning almost no interest on their holdings of cash, making it more difficult for them to achieve the returns shareholders typically expect from them. That will put pressure on companies to pare down the cash holdings eventually.
“Stockholders don’t want them to keep sitting on cash at a zero return,” said Paul Kasriel, an economist at Northern Trust. “They’re going to use it,” either to increase hiring and investment or to make payouts to shareholders in the form of dividends or share buybacks, he said.
Wanna bet which one it’ll be? Didn’t think so:
Earlier this week, retailer Target Corp. raised its quarterly dividend to 25 cents a share from 17 cents, saying that the company’s cash holdings were “well above the amount needed for optimal reinvestment in our core business.”
How fortunate for everybody that we love free markets and don’t begrudge people getting rich! And that we have a president who knows how things work, and that “Ultimately, true economic recovery is only going to come from the private sector.”
Saturday, May 29th, 2010
Private Enterprise and Its “Regulation”
The New York Times is having one of its better days. Two separate stories expose the same simple but unmentionable truth: capitalists, with the quiet cooperation of the nominally public political structures they dominate, kill and despoil for money.
Story One: “Obviously, we’re all oil industry.”
Monday, May 24th, 2010
Even Carville Sees It
Black Reagan prefers the preservation of market fundamentalist tenets to execution of the laws and the most elementary kind of ecological concern, as David Pettit very usefully explains.
In fact, as Pettit notes, Zerobama’s now gotten so obvious and odious that it’s started to bother even the professional trickster James Carville, who correctly observes that Obummer is “risking everything” to keep the capitalists happy:
I think they actually believe that BP has some kind of a good motivation here.’ They’re naive! BP is trying to save money, save everything they can… They won’t tell us anything, and oddly enough, the government seems to be going along with it!
The 2008 Marketer of the Year would have to get massively better just to rise up to Epic Fail status. As it stands, he’s every bit as destructive as was his immediate predecessor.
Sunday, May 16th, 2010
Tort Abortion
Guess what, kids? That’s right: Our laws were written to relieve corporate capitalists from paying for the true damages they cause.
Section 1004 of the Oil Pollution Act, passed by our lovely Congresspeople in 1990 as a strengthening of then-existing rules reads as follows:
That means that, by law, British Petroleum is not only able to enjoy all the rights of the “fictitious individual” while not risking actual individuals’ bodily punishment exposures, but the maximum it can be required to pay for the ongoing Deepwater Horizon eco-tastrophe is $75 million — less than 5% of its 2009 reported net income; 0.3% of its total assets. As a financial punishment, this is a traffic ticket, literally.
And the official response of the liberal stylists among our allegedly concerned corporate politicians? To eliminate the cap on such damages and force giant for-profit operators to face the risk of being liable, like you and me and everybody else who can’t afford a legal dream team, for what they actually do?
Nope. Of course not. Not on the table.
Friday, April 30th, 2010
Sisyphus Had it Easy
Except in boom phases, the economic terms of capitalism always get worse for commoners. (We won’t think about ecology for now.)
This is most true in recessions, when capitalists redouble their efforts to expand their gross profit margins.
And, voilá — today’s New York Times reports as follows:
The broadest measure of the overall economy grew at a seasonally adjusted annual rate of 3.2 percent in the first quarter of 2010, after gains of 5.6 percent in the fourth quarter of 2009 and 2.2 percent in the third quarter.
While the expansion in output was welcome, it still has not brought the level of hiring growth needed to recover ground lost during the recession.
But as the unemployment rate has hovered around 10 percent for the last eight months — most recently it was 9.7 percent in March — concern about the job situation has persisted.
Even though any pickup in business is welcome, modest improvement may not be enough to ease the lasting pain caused by the so-called Great Recession, many economists say.
Consumer spending grew at an annual rate of 3.6 percent in the first part of the year.
Hiring only recently began to materialize, with the economy adding 162,000 jobs on net in March, of which 48,000 were temporary Census-related positions. The economy had destroyed about eight million jobs since the recession began in December 2007.
In standard NYT procedure, the overall tone of the story is one of mystified concern, with lead and conclusion both conveying muddled non-interpretations. As usual, the actual explanation is there, but buried in a single, hurried mid-story paragraph:
Businesses have found ways to make more with fewer resources, meaning that they have been able so far to meet additional demand for their products without bringing on many new workers. Companies are also sitting on a tremendous amount of cash, economists say, and appear unwilling to spend it.
In economic terms, what’s happened is that, in these lean times, our “entrepreneurial” overclass has indeed “found ways” to boost productivity, which is the amount of GDP produced per hour by the U.S. workforce.
In fact, according a recent estimate published by The Conference Board, in 2009, U.S. productivity grew by 2.5 percent in 2009, while overall GDP fell by 2.5 percent. Hence, the overclass was able to produce 2.5 percent less wealth while paying for 5.1 percent fewer hours of labor.
What this means is that there is not going to be any serious job growth unless the economy grows faster than 5 percent (the point these days at which labor demand would start overtaking capitalists’ ability to produce more with fewer employees) for a sustained period.
From a working class perspective, this means that, every year, as capital become more labor-efficient, the size of the boom it would take to bring back decent times for workers gets bigger, and hence, less likely.
(What all that means for the planet’s ecospheres is an equally important and damning topic.)
That’s the facts, Jack.
Thursday, March 25th, 2010
F-R-A-U-D
Mandated offers of coverage, but no cap on the price of the policies offered, in other words. So, actually, in practice, no insurance for sick or previously sick children until at least 2014. “Good news! We hereby offer you a policy for Tiny Tim! Your monthly premium will be $2,789 a month, with 20% co-pays for in-network services,up to a maximum of $25,000 a year.”
Meanwhile, can you recognize the pattern here?:
NAFTA
WTO/Conclusion of Uruguay Round
AFDC —> TANF
Glass-Steagall repeal
Expiration of Independent Counsel statute
Romney-Ca…oops, Obama-Care
P.S. In case you’ve forgotten, during his award winning, massively fraudulent electoral campaign, Barack Obama promised his version of “health care” (largely an oxymoron in a capitalist medical system) reform would not include a personal mandate requiring all U.S. residents to purchase private medical insurance. As CBS News reported, this promise was presented by Obama as “the biggest difference between” himself and Hillary Clinton on the topic.
We now know that the only difference between Clinton and Obama is that the former was substantially more honest with the public about her actual plans for governance. Now, there’s a depressing thought…
