Piggy Bank
Mar 4th, 2008 at 7:52 am by Susie
And yet, I guarantee this still won’t prevent massive layoffs:
Unlike most American consumers, whose failure to save has exasperated economists for years, the typical American corporation has increased its savings so sharply that it probably has enough cash on hand to completely pay off its debts.
That should be good news in an economy unsettled by rising energy prices, tightening credit, gyrating stock prices and declining values for the dollar and the family homestead. Indeed, the Federal Reserve chairman, Ben S. Bernanke, cited strong corporate balance sheets as a bright spot in the darkening forecast he presented to Congress last week.
Some analysts also speculate that these cash-rich companies may start sharing their wealth with investors through special dividends, providing welcome stimulus for the economy.
Fancy that. Institutions are only as good as the people in them. What would have happened if, collectively, these institutions had used capital generated by their workers’ productivity increases to nurture their employees, give their employees better salaries/raises, and had attracted more and better employees?
Far more likely they will “share their wealth” with the various executives in the company and chortle into the night.