U.S. corporations are still making a killing, recession be damned. And – shockingly – they’re not spreading the wealth. In his recent article “Obama’s CEO Problem,” Fareed Zakaria of Newsweek points out that “the Federal Reserve recently reported that America’s 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets.” This figure, he notes, “is higher than it has been in almost half a century.” But here’s the kicker: “And yet, most corporations are not spending this money on new plants, equipment, or workers.”
Could this be another reminder – as if we needed it – that the long-discredited theory of trickle-down economics doesn’t work? That rather than re-invest their riches to create working-class prosperity, Big Business tends to pocket the money, cut workers and costs, and jack their profit margins even higher, as happened during the Reagan years? Only to Establishment darling and self-proclaimed “centrist” Zakaria would this come as a shock.
But don’t take my word for it. Zakaria, in his infinite wisdom, has already foreseen this reaction and sagely warns that “the populist left will surely scream that the last thing we need to do is pander to business.” No, the real problem here, Zakaria writes, is that the private sector views President Obama as fundamentally “anti-business.” Why the distrust? Zakaria goes on to quote a handful of unnamed “business leaders,” who recite a litany of tragic wrongs done them by the Obama Administration. Among them are these grave injustices: “Obama had no businessmen or women in his cabinet” and “he rarely consulted with CEOs.”
Not to sound like a member of the screaming populist left, but does anyone apart from Zakaria’s nameless “business leaders” – and the most dedicated of Obama’s Kool-Aid drinkers – really believe that Big Business no longer has a voice in D.C.? The notion that Obama has miraculously banished lobbyists from the Beltway is ludicrous. Corporate influence is so strong that the line dividing the private and public sectors has all but disappeared (to the extent that there’s ever been a line, that is). And given the revelations that have surfaced since the Deepwater Horizon spill – which found that, in one case, an industry employee was sleeping with a federal regulator – is even more entanglement between business and government really the solution to our continuing economic woes?
But that’s not all. Of particular concern to Zakaria’s captains of industry is the “uncertainty surrounding regulations and taxes,” especially the havoc that “the myriad new laws and regulations being cooked up in Washington” will wreak upon corporate profits. One poor CEO lamented that “his company had lawyers working day and night trying to figure out the implications of all these new regulations.” The average American is expected to sympathize.
Zakaria attempts to temper these criticisms, stating that “most of the business leaders I spoke to had voted for Barack Obama.” While Zakaria clearly mentions this to prove his corporate contacts aren’t raving Tea Party fanatics, the line says more about Obama than it does any of Zakaria’s unattributed sources. Despite his “anti-business” label, Obama was during the election and remains today a creature of the Establishment. If there are any remaining doubts on that front – and by this point in the game, there should not be – that ringing endorsement by the American business community should put them to rest.
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