Is Big Business Hoarding Capital, Jobs To Help Romney?
The latest jobs report showed the national unemployment rate fell to 7.8 percent, from 8.1 percent. It was the first time in nearly four years that the rate was below 8 percent. Even more encouraging, the percentage of people looking for work went up, NPR reported. It’s becoming clear that we are better off today than we were four years ago.
So much for the good news.
No relief at the pump. On Friday the average price of a gallon of regular gasoline ticked up to $3.79. In California, the price of regular shot up 8 cents a gallon overnight. The highest average price ever was $4.61 in 2008.
Could we break the record? It’s up to Big Oil. There are plenty of reasons why major oil corporations want President Obama to lose. It’s not because there’s less drilling; domestic production is up under Obama. Oil profits are higher than they were under President W. Bush. No, to oil giants, Mitt Romney stands for more taxpayer subsidies, less government regulation and lower corporate taxes.
Give until it hurts. Another way corporations are working in concert (but not necessarily in a conspiracy) to beat Obama is by using the Citizens United decision to pour hundreds of millions of dollars into super PACs and “charitable” organizations. Nearly all of that money goes for TV ads that attack the president or Democrats in Congress, and the ads don’t have to be about the economy. Because many of these groups can give anonymously, we’ll never know if we’re buying products and services from companies that in turn supported attack ads to hurt Obama.
Go slow on hiring. If the jobs picture had been brighter, it would send a powerful signal to the country that the recovery is under way. But that would help the president. For business, it’s better to let things stay where they are to help Romney — he’s promised to repeal or defund the financial regulations in Dodd-Frank that Wall Street and big banks hate. As a bonus, Romney’s tax plan for the wealthy is kind to the captains of industry. He’s one of them.
The circle of uncertainty. Some business leaders say they won’t hire because of economic uncertainty; and the more they refuse to hire, the more uncertainty there is. For the final four weeks, the only uncertainty that matters to corporate leaders is the uncertainty over who will next occupy the White House. Remember Romney’s “Corporations are people, my friend!”?
We’re not buying. Whatever the cause, consumer spending accounts for two-thirds of the economy and consumers aren’t buying. Because we’re not buying, investors are reluctant to back new companies or help existing ones grow.
According to Hedrick Smith in his new book, low demand keeps investors sitting on the sidelines. The highest estimate of hoarding, by The Atlantic, puts the idle cash at $5 trillion, which is bigger than the economy (GDP) of Germany.
The benefits of unleashing capital. Robert Pollin, of the Political Economy Research Institute at UMass Amherst, did a study that found:
If America’s largest banks and non-financial companies moved just some of that cash into productive investments instead, that would give the economy a huge boost, creating about 19 million jobs in the next three years and lowering the unemployment rate to less than 5 percent.
Austerity is bad for America. Pollin said: “The job market is stagnant and the GOP has the federal government tied up in knots, so the country’s short-term economic future is in the hands of America’s titans of industry and finance.”
Hoarding capital doesn’t have to be a well-crafted, secret conspiracy. There is a natural confluence of behaviors based on common self-interest. In the final month the smart play for large employers is to wait until the day after Nov. 6, in hopes that Romney will be president.