FacebookTwitterGoogle+RedditEmail

Cooing With Cash

by CARL GINSBURG

Tis the season to be jolly, especially if you are a US corporation full up with cash. And many are. Cash reserves at US companies are at a 40-year high, with companies averaging 10 percent of market value in cash deposits or T-bills. In the health care and tech sectors, that cash reserve number is a whopping 20 percent. (All in all, a good season for the health care industry, where stocks are expected to take off as impediments to profiteering disappear—there is nothing in any of the pending health proposals to slow galloping costs.) Google CEO Eric Schmidt was effusive about his company coffers on an analyst call this week: “We love cash.”

Unlike government, there is no fiscal crisis in corporate America. Still, prudence is the order of the day. CEOs hit their mark by cutting jobs, strict inventory control– a recalibration of P&Ls. And there is no relief in sight. If there were a “CEO confidence” survey, as exists for consumers, it would read very, very low. CEOs are well aware that the same low wage policies that brought historic profits, and bonanza bonuses, have had a double edge effect.

A scrooge is a scrooge. “Over the last several years, companies have become stingy on what they’re spending, but what we’ve seen in the last six to seven months is companies really holding onto their money,” said S&P’s Howard Silverblatt on Public Radio four days before Christmas. “We go back with the S&P indexes for decades and there’s been nothing like this….”

The latest round of pocket stuffing is at.. ho, ho, ho, the banks, as the financial sector just keeps humming along. Turns out that 2008 was just a glitch in America’s main act: making money on money In excess of $50 billion of new capital was raised to replace TARP money repaid by the banks to Treasury– still trying to share in the glory of the Fed and its leader, Time Person of the Year, Chairman Ben. He saved the world economy, in case it missed you. And don’t the banks know it: December was the biggest month for the sale of bank stock in history.

What’s sweet about the deal is that the banks reap hundreds of millions in fees selling their own shares. Matthew Toole of Thomson Reuters told the New York Times: “Ironically, the mechanics of exiting TARP turned out to be lucrative business for equity underwriters this year.” Now there’s a recovery.

If you want to know what you are buying in those bank stocks, see yet the latest (December 22) full-page newspaper ad of JPMorgan Chase: “[W]e believe families who work hard to meet their mortgage payment obligations deserve to be treated with respect and given the opportunity to stay in their homes.” What about people who work hard and don’t meet their mortgage payment obligations? The most obvious thing in America today is that you can work hard and stay poor.

Not far from JPMorgan Chase HQ in Manhattan are middle-class neighborhoods experiencing the worst joblessness in generations. In the northern Bronx, a middle-class area, unemployment has doubled in two years and is now 12.2 percent. Same 12.2 percent for middle class sections of Queens. Foreclosures there are rising rapidly. “Respect”? “Opportunity”?

CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at carlginsburg@gmail.com

CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at carlginsburg@gmail.com

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 16, 2017
Paul Street
How Pure is Your Hate?
Jeffrey St. Clair - Alexander Cockburn
Did the Elites Have Martin Luther King Jr. Killed?
Robert Hunziker
Global Warming Clobbers Ocean Life
Patrick Cockburn
The Terrifying Parallels Between Trump and Erdogan
Kenneth Surin
The Neoliberal Stranglehold on the American Public University
Lawrence Davidson
Is There a Future for the Democratic Party?
Douglas Valentine
Who Killed MLK Jr?
Robert Fisk
The Foreign Correspondent in the Age of Twitter and Trump
Dale Bryan
“Where Do We Go from Here?”
David Swanson
The Deep State Wants to Deep Six Us
Dan Bacher
Obama Administration Orders Speedy Completion of Delta Tunnels Plan
Mark Weisbrot
Obama Should Make Sure that Haitian Victims of UN-Caused Cholera are Compensated
Winslow Myers
The Light of the World
Bruce Mastron
My Latest Reason to Boycott the NFL: Guns
Weekend Edition
January 13, 2017
Friday - Sunday
Gregory Elich
Did the Russians Really Hack the DNC?
Jeffrey St. Clair
The President Who Wasn’t There: Barack Obama’s Legacy of Impotence
Anthony DiMaggio
Ethics Fiasco: Trump, Divestment and the Perversion of Executive Politics
Joshua Frank
Farewell Obummer, Hello Golden Showers
Paul Street
Hit the Road, Barack: Some Farewell Reflections
Vijay Prashad
After Aleppo: the State of Syria
John Wight
Russia Must be Destroyed: John McCain and the Case of the Dodgy Dossier
Rob Urie
Meet the Deplorables
Patrick Cockburn
The Russian Dossier Reminds Me of the Row Over Saddam’s WMDs
Eric Sommer
U.S.-China War: a Danger Hidden from the American People
Andrew Levine
Are Democrats Still the Lesser Evil?
Linda Pentz Gunter
What’s Really Behind the Indian Point Nuclear Deal?
Robert Fantina
Trucks, ‘Terror’ and Israel
Richard Moser
Universal Values are Revolutionary Values
Russell Mokhiber
Build the Bagdikian Wall: “Sponsored News” at the Washington Post
Yoav Litvin
Establishment Narcissism – The Democrats’ Game of Thrones
David Rosen
Return of the Repressed: Trump & the Revival of the Culture Wars
Robert Koehler
War Consciousness and the F-35
Rev. William Alberts
The New Smell of McCarthyism Demands Faith Leaders Speak Truth to Power
John Laforge
Federal Regulator Halts Move to Toughen Radiation Exposure Limits
Norman Pollack
Farewell Address: Nazification of Hope
David Swanson
Imagine the Confirmation Hearing for Secretary of Peace
CJ Hopkins
Why Ridiculous Official Propaganda Still Works
Ron Jacobs
Striking in Reagan Time
Missy Comley Beattie
The Streep
Graham Peebles
Climate Change: The Potential Impacts of Collective Inaction
Uri Avnery
Confessions of a Megalomaniac
Kenneth Worles
Black Without a Home: King’s Dream Still Deferred
Geoff Dutton
The Russian Patsy
Jill Richardson
The Coming War on Regulations
Jeremy Brecher
Resisting the Trump Agenda is Social Self-Defense
FacebookTwitterGoogle+RedditEmail