Uncertainty Trope

Uncertainty Trope

by digby

Corporate America is sitting on massive amounts of cash. But companies are not investing that capital back into their businesses in search of growth. Instead, yields on stocks continue to climb at a time when America needs jobs not dividends[...]

So why aren’t companies investing for growth? One answer ringing from the C-Suites of corporate America (and their Washington megaphone, the Business Roundtable) is uncertainty. Specifically, uncertainty brought on by government actions (regulation) and inaction (debt ceiling and tax expiration procrastination)[...]

The problem with the idea that uncertainty is killing the economy is that it’s false. Bloomberg’s editors do an admirable job dismantling the argument...The question remains what kind of certainty these CEOs are really after.

If you can’t remove uncertainty that isn’t there, lower rates any more, or reduce non-existent inflation, there’s a strong case for fiscal stimulus. But since these CEOs have Peterson Institute-ingrained aversion to deficits and debt, they aren’t advocating for that. Rather, this crowd seems to be holding out for corporate welfare: changes to rules and regulations that would help specific companies outperform the market.
[...]
Companies are sitting on their hands and not investing in their businesses while the economy wilts, waiting for the kind of low-risk, above-market-return investment scenario that rentiers love. After four years of dealing with the after effects of a crisis brought on in part by providing an the securities business with precisely those type of opportunities, that should be off the table.

It should be. But it isn't. These corporate elites are either stupid or venal or both. They can argue for government stimulus to create demand for their products or they can argue for corporate welfare. They prefer corporate welfare. I'm voting for venal. They don't want win-win. They just want win.

Read the whole column to find out which CEOs are complaining the loudest ...