The Federal Reserve, which controls America’s monetary policy, says it is trying to invigorate job creation in our country by slashing interest rates to the bone. This move allows big corporations to borrow money for next to nothing, so they can expand and start hiring again.
Great goal! How’s it working out?
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Well, the first step has gone splendidly, with such giants as DuPont, Hertz, IBM, Microsoft, and PepsiCo rushing to grab the windfall. They’ve borrowed hundreds of billions of dollars at interest rates of less than one percent. However, there’s been quite a stumble on step two of the Fed’s plan. Rather than putting this enormous stash of cash to work for America, the corporations are simply squirreling it away for their own enrichment, refusing to spend it on the job expansion that our economy desperately needs.
For example, Microsoft – one of the richest corporations on Earth – amassed nearly $5 billion under this “opportunistic borrowing” scheme, yet has put none of the cheap money into job creation. Instead, it is using a big chunk of it to buy back stock from its own shareholders – a move that merely profits the handful of rich elites who control Microsoft.
Worse, such corporate powers as Hertz and PepsiCo are using the funds to take over competitors. These consolidations will actually cut jobs, while reducing consumer choices and raising our prices. Indeed, there’s no provision in the Fed’s program to keep the giants from investing the money in foreign expansion, thus offshoring more American Jobs.
And there’s the rub in nearly all of Washington’s indirect job creation efforts – officials blithely dole out billions and even trillions to corporations and banks, with no strings attached. So the big shots and bastards gleefully grab the money and run.
“Easy Borrowing By Corporations Spurs Few Jobs,” The New York Times, October 4, 2010.
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