Buried treasure

The latest financial reports of major companies reveal that many have enjoyed robust
earnings and accumulated large hoards of cash. It would seem logical that they would
put that cash to work, in the classic capitalistic fashion, to expand their ventures,
increase their market share, and earn greater returns for their stockholders. Such
reinvestment would create jobs in the private sector, which in turn increase demand--
all good for business. But this has not happened. It would be useful to learn why.

We can assume there exists a substantial lack of confidence in the fiscal policy of
the government, particularly as to taxes and deficit spending. The size of our
trade and budget deficits threaten the value of the dollar as the medium of exchange in international finance.
The continuing crisis in the real estate markets has eroded the asset base which supported our consumption based economy. Our failure as a nation to address our
reliance on imported petroleum bloats our deficit, further devaluing the dollar. Add to the above a dysfunctional Congress which cannot meaningfully address any of
these problems, and they all appear to explain the corporate decisions to hoard cash
and not hire. In the immediate future this might seem logical. In the long term this
policy is a recipe for extinction. Other developed countries will not sit on their
hands, or cash. They will capture our markets, domestic and foreign, and we will stagnate.
Where are the vaunted American enterprise, ingenuity, and boldness of yore when we desperately need them? Where is the leader who can inspire and motivate our business leaders to innovate and accept risk to seek reward? Our greatest danger may come from
playing it safe.