Monday, October 04, 2010

National News Updates

Corporate America is taking advantage of low interest loans, and sitting on the money till the economy improves. From the NY Times:

Companies like Microsoft are raising billions of dollars by issuing bonds at ultra-low interest rates, but few of them are actually spending the money on new factories, equipment or jobs. Instead, they are stockpiling the cash until the economy improves.

The development presents something of a chicken-and-egg situation: Corporations keep saving, waiting for the economy to perk up — but the economy is unlikely to perk up if corporations keep saving.


American corporations have been saving more money since the financial collapse of 2008. But a recent rush of blue-chip bond offerings — including a $4.75 billion deal last month by Microsoft, one of the richest companies in the world — has put even more money in their coffers.

Corporations now sit atop a combined $1.6 trillion of cash, a figure equal to slightly more than 6 percent of their total assets. In the first quarter of this year it was 6.2 percent of assets, the highest level since 1964, when it was 6.4 percent.

They aren't hiring, though. As I wrote about back in July, some of these corporations are using this opportunity to cut jobs, force unions to make concessions, and still make a tidy profit for the shareholders.

Still we keep hearing that the private sector is our best hope for job creation.

US transportation system failing, warns a story in today's WaPo:

The United States is saddled with a rapidly decaying and woefully underfunded transportation system that will undermine its status in the global economy unless Congress and the public embrace innovative reforms, a bipartisan panel of experts concludes in a report released Monday.

U.S. investment in preservation and development of transportation infrastructure lags so far behind that of China, Russia and European nations that it will lead to "a steady erosion of the social and economic foundations for American prosperity in the long run."

Which reminded me of Laura's post last month, where she mentioned President Obama's proposal to invest $50 million in updating road, rail, and air systems.

Think of the jobs that would be created! Instead, we're being held hostage by myopic people who are more interested in scoring political points than actually solving the very real problems that face this country.

cross posted at MainSt/

1 comment:

DissedBelief said...

I am convinced that Republicans as a group have to be highly disturbed individuals with huge chips on their shoulders, anti-social and a hatred for all others. I'm still haunted by the comments made by (R) Alan Simpson who is co-chair of the Presidents established commission on SS. Mr. Simpson said to a woman's advocate, "Social Security is like a welfare milk cow with 310 million tits". Please excuse me Susan if you already posted this and I'm just repeating. I'm busy on a Squidoo lens about Republicans and added this comment. Absolutely outrageous and sadly,a very predictable comment for a Republican. They stonewall all progress which they love to mumble repeatedly but but appears their only understanding of progress is warmongering. Progress is excellent education, health care for all citizenry and and altruistic social system. We really are in trouble. As for our county's infrastructure, each drive in the car is a test for safety. We are crumbling from the top down, where do we go from here?