Friday, December 10, 2010


You know, they'd really love to spend all this cash they have lying around on hiring and expansion, but, well, they just can't, y'know?

Corporate America's cash pile has hit its highest level in half a century.

Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets -- the largest share since 1959.

The cash buildup shows the deep caution many companies feel about investing in expansion while the economic recovery remains painfully slow and high unemployment and battered household finances continue to limit consumers' ability to spend.

The buildup has a big downside for companies, which get little return on their money because interest rates are low, but it reflects the relatively few opportunities they see to deploy their cash more creatively.

"The corporate sector is looking at the household sector and saying, this is not the environment where we should expand our business," said Deutsche Bank economist Torsten Slok....

Hey, corporate sector: you want the people in the household sector -- i.e., us ordinary folks -- to have more money to spend on your goods and services? Well, then you and your bought-and-paid-for puppets in Washington should get your boots off our freaking necks.

We need some genuine stimulus, enough to actually put a dent in unemployment in a Keynesian way until you'll deign to do some private-sectoring hiring. We need mortgage relief. We need the rich to pay a share of taxes that's more along the lines of what the rich paid for most of the past seventy-five or so years. And yes, I know saying all this is preposterously naive, because you don't give a goddamn about us as people. But if you want us as consumers, we have to have a couple of nickels to rub together to consume with.

Then again, for all your whining about how little money your money is making while it's parked and idle, you're apparently not suffering all that much, because American businesses had record profits last quarter.

I suspect our corporate overlords care about our lack of ability to spend not because they're suffering in any way, but because their pent-up "animal spirits" are making them itchy to expand. Well, fine. Your precious animal spirits are going to continue to be denied as long as you keep grinding the rest of us under your heel.

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