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Thread: So What Should The Government Be Doing Then

  1. #31
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    Quote Originally Posted by GGT View Post
    Yes. Some short term credit for business isn't the same as long-term debt, in the flow of money (commercial paper). I'm just tired of the private sector whining about moving forward, blaming the government for their tepid response and near-paralysis.
    I can understand that, but on the other hand, you really want your country to turn into some mega-Ireland?
    Greece shows us that there is a kind of politician worse than the ones that break their election promises; the ones that keep their election promises.

  2. #32
    Quote Originally Posted by Lewkowski View Post
    Protectionism helps nobody. Do you like a lower quality of life? Do you like things costing more? Do you like violating our international agreements?
    Semantics. Political talking heads have hijacked the word. A higher quality of life means some degree of Protection from unethical actors. And yeah, I'd rather protect the American consumer from lead, melamine, rat poison or DDT in our food and toy imports, or cars with exploding gas tanks, than protect cheap Chinese labor / imports.

  3. #33
    Quote Originally Posted by Hazir View Post
    I can understand that, but on the other hand, you really want your country to turn into some mega-Ireland?
    We are beyond being a mega-Ireland. The big difference is that we hold the world's currency hostage. We're looking a lot more like 16th century Spain...

    History repeating?
    Last edited by Being; 12-10-2010 at 10:40 PM.
    .

  4. #34
    Quote Originally Posted by Lewkowski View Post
    Your preferred role is for government to be the guide. You believe this is necessary, your own words show that you want the government to guide people. Maybe you feel this should be more limited then a command and control run economy but you still believe the government's role is to guide people. Call it "leveraging the collective resources" or guiding its the same thing.
    It is and always has been the role of government, it's part of the very basic function of government, and it is necessary. To pretennd it isn't is an idealistic fantasy - a conservative utopia. Like I said, I don't believe in Utopias.
    The Rules
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  5. #35
    Did Lewk claim the FDA kills thousands of people because of cancer and standing in the way of drug companies from influencing ignorant citizens from attempting drugs and treatments they know nothing about?

    Three cheers for failing to read between the lines of a biased article!

  6. #36
    Big Pharma is just trying to help, crafting magic potions, pills and special branches for proton disposal in case of nuclear war, the Evil Gummit tries to stop them. Nothing un-Lewkish about that train of thought.
    In the future, the Berlin wall will be a mile high, and made of steel. You too will be made to crawl, to lick children's blood from jackboots. There will be no creativity, only productivity. Instead of love there will be fear and distrust, instead of surrender there will be submission. Contact will be replaced with isolation, and joy with shame. Hope will cease to exist as a concept. The Earth will be covered with steel and concrete. There will be an electronic policeman in every head. Your children will be born in chains, live only to serve, and die in anguish and ignorance.
    The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil, no good, nothing but blind, pitiless indifference.

  7. #37
    The government should be using last year's revenue to set this year's budget. It's simple, really.
    .

  8. #38
    Quote Originally Posted by Hazir View Post
    I can understand that, but on the other hand, you really want your country to turn into some mega-Ireland?
    We already have mini-Irelands in some states (Nevada, Florida) where the housing and financial services boom went BOOM! States like NY, PA and CA are more broke than others, unable to pay creditors or service our debts. On the other hand, we have plenty of cash-soaked private corporations hoarding their capital. Instead of M & A or investing in China, they could/should put their money to work in the US in ways that make jobs. Maybe even scale back those multi-million dollar CEO salaries to hire a few hundred people instead.

  9. #39

    Default So What Should Private Corporations Be Doing Then?

    Companies Cling to Cash

    Coffers Swell to 51-year high as Cautious Firms Put Off Investing in Growth

    By JUSTIN LAHART

    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.

    In one bright sign, the Fed's data, known as the "flow of funds" report, show that the net worth of U.S. households increased to $54.9 trillion in the third quarter, up from $53.7 trillion in the second quarter, as rising stock-market wealth more than offset declining home values. That was still well below the second-quarter 2007 peak of $65.7 trillion. After-tax household income rose to an annualized $11.42 trillion from $11.37 trillion in the second quarter.

    The cash pooling up at companies has the potential to help the economy grow more vigorously and bring unemployment lower—if they start spending it on new plants, equipment and employees.

    But in the wake of the worst economic downturn since the 1930s, companies are hesitating to make that shift, said Brian Bethune, economist at IHS Global Insight.

    In the aftermath of the 2000 dot-com bust, many nonfinancial companies adopted a more conservative stance, holding more cash, and less debt. When the recession hit in late 2007, and the financial crisis erupted in 2008, their stronger balance sheets helped them weather the storm.

    "They did well by being conservative," said Mr. Bethune. "Why would they depart from that?"

    FMC Corp., a chemical company based in Philadelphia, is among those that have sharply reduced their debt loads and increased their access to cash in recent years, a shift that helped shield many businesses from the downturn.

    The company doesn't plan to expand beyond its three main areas of business—herbicides and pesticides, food additives, and lithium that goes into batteries. Nor does it plan to make any major acquisitions. It is exploring ways to reinvest its cash in the company and, if it can't, it will likely pay it out to shareholders through dividends and stock buybacks, according to Chief Financial Officer Kim Foster.

    But the company will likely maintain the conservative stance it adopted prior to the financial crisis. "That decision has been validated," Mr. Foster said. "We're not going to be financially aggressive going forward."

    Much of the cash accumulating in corporate coffers belongs to technology companies, which typically don't need to tie up nearly as much money in plants, real estate, equipment and inventory as do manufacturers and retailers.

    Tech companies in the Standard & Poor's 500-stock index now hold some $352 billion in cash and short-term investments, according to Standard & Poor's index analyst Howard Silverblatt.

    Among the top holders are Microsoft Corp., with $43.25 billion in cash and short-term investments; Cisco Systems Inc. with $38.9 billion; and Google Inc. with $33.4 billion.

    But the propensity to save rather than spend shows up across the corporate landscape.

    With sales slumping, Avery Dennison Corp., a Pasadena, Calif. maker of labels and packaging materials, laid off workers and cut its dividend last year in an effort to preserve cash.

    As sales began to come back, the company's cash hoard swelled. In the quarter ended Oct. 2, Avery Dennison held $157.8 million in cash and cash equivalents—up from $91.9 million a year earlier.

    The company will likely spend more money, said Chief Executive Dean Scarborough. But unlike in the early 2000s, when Avery Dennison made a string of acquisitions and invested heavily in emerging markets, it will take a conservative approach to expansion.

    "There will be a modest increase in capital spending and a modest increase in hiring," Mr. Scarborough said. "If we do acquisitions, they'll likely be small."

    When Fastenal Co. considered what it might do with the cash built up on its balance sheet in recent quarters, it decided that giving it back to shareholders was a better idea than investing it in growth. Fastenal said it made the decision partly because of uncertainty about tax policy on dividends next year.

    On Monday, the Winona, Minn.-based company, which sells screws, nuts, bolts and other supplies to factories and construction companies, paid out a special dividend of 42 cents a share, or roughly $62 million.

    But even after the dividend, Fastenal, which had $172 million in cash and cash equivalents in the third quarter, is holding more cash than it did prior to last year.

    "We're saving our firepower for when opportunities might come up," said chairman and founder Bob Kierlin.
    http://online.wsj.com/article/SB1000...NewsCollection

    The subtitle says it all, delaying investment in growth. Corporate American loves to claim that it's our business community that innovates, creates value, growth, jobs, progress. But to get out of the worst downturn since The Great Depression, they're shown to simply be greedy capitalists hoarding money, to hell with everyone else.

    They're waiting for the consumer to start spending, but they won't do much to bump up numbers of people with paychecks. They'll beef up dividends for stockholders (those damn capital gains taxes ) but neglect their customers and employees. They'll pay millions to lobbyists, to get more from congress, and threaten to take their toys to China if they don't get what they want. Nice business ethics.


  10. #40
    Where's the dividends? If you're not going to plow your profit back into the company, the investors need to get paid then.
    The Rules
    Copper- behave toward others to elicit treatment you would like (the manipulative rule)
    Gold- treat others how you would like them to treat you (the self regard rule)
    Platinum - treat others the way they would like to be treated (the PC rule)

  11. #41
    It's a freee market process

    They are just starting to increase the dividends. GE just did, for example.

    The only problem is that they are concerned about banks not lending for any expansion, so those who are profitable keep a mammoth amount of cash on hand anyway.

    It's all about the bankz that should not have been bailed out.

  12. #42
    Quote Originally Posted by agamemnus View Post
    It's all about the bankz that should not have been bailed out.
    Have any thoughts on what might have happened if the banks had not been bailed out? Remember, this was supposed to be a serious thread where people made serious comments.... dammit....
    The Rules
    Copper- behave toward others to elicit treatment you would like (the manipulative rule)
    Gold- treat others how you would like them to treat you (the self regard rule)
    Platinum - treat others the way they would like to be treated (the PC rule)

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