Whatâs Wrong Today:
Everyone is concerned about the economy and how to add new jobs. If you follow the current state of play between the parties, you know that:
- President Obama is casting about for a plan that a) will pass both houses of Congress and b) can add some jobs.
- An article of faith for most business executives and most Republicans is that the only solution is tax breaks for businesses and their executives (the âjob creatorsâ).
- The Keynesians argue for substantial and immediate stimulus (âgovernment spendingâ) to create jobs as a bridge until our economyâs momentum takes over and drives us out of the doldrums.
Should it be the government or the private sector that drives? We all want the answer to be the private sector, since down deep, we are all capitalists. We like the job creator image. We hear that Americaâs corporations are sitting on piles of cash that they are dying to unleash to create new jobs if only the government would get out of the way, and maybe provide a few tax breaks, too.
The statistics are compelling: The Wall Street Journal said recently that the S&P 500 corporations âcollectively have $963 billion in cash, a sum equal to twice the annual output of the state of Ohioâ. The New York Times reported that â519 American multinational corporations had $1.375 trillion outside of the United Statesâ. The idea was that it would be repatriated if the Obama administration changed our tax policy to lower the tax rate on foreign dividends.
Consider these awesome numbers:
- Apple has $41 billion offshore
- Microsoft has $42 billion
- Cisco has $39 billion of which 90% is offshore
- Google has $40 billion in cash of which 43% is offshore
Itâs childâs play right? Lighten up on the taxes these guys pay, and the jobs will roll on home too. Deregulate âem, and here come the jobs.
So Whatâs Wrong?
Donât count on significant domestic job creation from multinationals. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009. Remember, we currently have 13.9 million unemployed. Despite that, President Obama, lawmakers and business lobbyists have all touted the countryâs biggest companies as critical to creating jobs.
But we donât know which of these guys can create domestic employment, since most do not voluntarily break down their offshore vs. onshore jobs. Without details on which companies are contributing to job growth and which are not, Congress is flying blind as they try to pick a plan to jump-start the hiring of American workers.
You know we should be speaking to firms that actually do create jobs in the US and not to those who are simply lobbying for a better deal.
Firms that do not put their number of U.S. workers in their annual reports include:
- IBM
- P & G
- Hewlett Packard
- Apple
- Pfizer
The latter two are part of a coalition of companies pushing for Congress to give them a tax break on money they have parked overseas, saying that any money brought back to this country would spur hiring.
No law requires companies to reveal publicly where their employees are based. Some companies choose to include the breakdown of jobs here and abroad in their SEC filings for the benefit of shareholders. But they are required by law to report the numbers to the Commerce Department which compiles a yearly report on total employment by U.S. multinationals.
Politicians have always been willing allies of the Multinationals. The companies have long realized political donations and financial support brings loyalty. Politicians are not fighting over which policy will bring jobs to your home town, but over how best to keep their own jobs in Washington. We as citizens must pay close attention to what our elected representative are doing; where their money is coming from; and what effect it has upon their voting.
To do anything else is simply Wrong.
