I work in IT and subscribe to a number of email IT newsletters. One of my favorites is Keep the Joint Running written by Bob Lewis, President of IT Catalysts of Eden Prairie MN. Obviously his topics deal with managing IT operations but he often pulls in real world information to support his points. They are always well thought out, well researched and accurate. The following paragraph is from his newsletter from July 19th. I won’t add any other comment at this point, just present the info as it stands:
Here’s a widely reported fact: American business is sitting on $1.8 trillion of cash. If they invested just half of it in employment, America’s execs could fund three million jobs, each lasting three years and paying $100 grand a year including benefits.
Think that might get the economy moving again? It’s their fault unemployment is still high.
Ask the execs who are sitting on top of the money and what do you get? “The regulatory environment is uncertain.” It is, of course, a nonsensical argument. The future is always uncertain in some way, shape or form.
We’re blaming the execs; they’re blame-shifting to the politicians; but the problem is structural — it’s nobody’s fault.
Businesses don’t hire employees because they can afford them. They hire employees so they have enough capacity to satisfy demand (the reason business tax cuts wouldn’t create jobs, by the way). No demand, no hiring. The way to generate demand? Other companies have to hire people.
If everyone hired at the same time they’d all be fine. But nobody is going to be first, and so everyone sits on their cash.
We want it to be somebody’s fault, but it isn’t. It’s how we’ve structured our whole economy.