Posted by
voice_of_reason on Saturday, July 31, 2010 8:08:31 AM
The Leftist view is that corporate fat cats - who are not using their hoarded cash to hire workers - are the root cause of our economic malaise. This fits nicely into Leftist narrative, but is far from true.
Corporations are profit-seeking entities, and their mission is to maximize their profits, not necessarily to maximize their headcount -- this much is true.
When corporations have cash, they usually re-invest it, except for a small percentage that is distributed to shareholders in the form of dividends. If they see profitable opportunities, they will hire people, purchase machines, etc., in search of greater profits. Corporations hoard cash only when they don't see better opportunities. They also seek to improve their balance sheets, just like individuals who save at a higher rate during a downturn.
It would require Leftists to re-think their entire world-view to realize that (greedy/evil/profit-seeking) corporations are reacting to the economic environment. And, (benevolent/altruistic/noble) politicians are creating a lousy environment with their feel-good policies.
So, most of the Leftist root-cause analysis is backwards. They reverse cause and effect, because they favor the benevolent-sounding (but stifling) policies that create a lousy environment for business (and individuals) to go about their respective 'searches for happiness'.
If you need an example of benevolent politicians passing a feel-good law with disastrous (unintended) consequences, look no further than the recent hike in the minimum wage, during a recession. Or, if your politics make you seek out something stupid that a Republican administration did, look at the Medicare-Prescription fiasco and/or the Bush era bailouts.
The Leftist narrative goes further -- corporations are 'buying' policies that help them become more profitable -- by lobbying politicians (of both sides). The questions that remain un-asked (in the Leftist narrative) are:
* why did politicians give themselves un-constitutional authority over such large portions of our economy?
* if politicians have the ability to pass laws at their whim, it makes it possible for profit-seeking corporations to improve their profits via lobbying activities. Is this the fault of the corporations (remember their mission is to maximize profits), or of the political system?
In the Leftist view, it is simple -- profits, bad; intentions, good. But, one would have to reverse cause and effect to accept the fact that it is the corporations - who are reacting to prevailing conditions - are evil.