Here is information that I think will attract more attention as the presidential election draws nearer: Big corporations are very profitable now, and are hoarding a lot of cash; they are hiring, not in the United States but abroad.
That means the so-called trickle-down theory has become the trickle-overseas theory.
The Wall Street Journal reports that most of the job growth in companies in the Standard & Poors 500 Index occurred in countries that had one thing in common: They weren’t the United States.
The hoards of U.S. corporate cash are held outside the United States as well. For example, two-thirds of Apple Inc.’s $82 billion in cash and marketable securities as of Sept. 30, the Journal says, was held by foreign subsidiaries. Apple is certainly not alone in that.
Now, you might ask why this will attract attention as the election nears. The answer is that present government policies aren’t fostering domestic job growth, at least not in large corporations.
The recovery is definitely favoring large firms with operations overseas. Small- to medium-sized firms haven’t been as prosperous.
“Many smaller companies are struggling to stay competitive or obtain financing,” the Journal says, reminding us that banks continue to be reluctant to provide financing to smaller business customers. Yet, bank profits have risen 22.7 percent since 2007, the Journal says. Not being in the lending business has done the banks some good, apparently.
Small to medium businesses are the ones that create the most jobs when they grow, simply because large businesses usually already have enough people to support growth, at least in the beginning of an expansion. And if those large businesses can do their new hiring overseas, at lower wage and tax rates, all the better for them.
The voters may not understand the intricacies of all this, but the millions who are out of work will know something stinks, and they’ll vote their noses, along with their pocketbooks.