Mike Cassidy writes the “Silicon Valley Dispatches” column for the San Jose Mercury News. He is feeling a wee bit cynical these days. With unemployment still high, Cassidy is wondering how the recent federal deficit reduction actions by Congress are going to promote job creation by American corporations:
It’s not a lack of money that is holding companies back from hiring. Collectively, corporations for months have been sitting on record levels of cash, reaching about $1.9 trillion today. Remember the recent headlines about Apple (AAPL) having more cash than the U.S. government?
And profits are up widely. The Wall Street Journal’s David Wessel was on the radio recently citing an analyst’s report that found that the first 100 of the S&P 500 to report quarterly earnings saw profit increases averaging 12 percent. Meantime, Wessel’s own paper was reporting on a new wave of layoffs at American companies.
So if you think further fattening corporate coffers with tax breaks will spur hiring, think again. — “Politicians and corporations are playing us for fools”
As someone who’s working in Silicon Valley, and as someone who knows a lot of people who are out of work or in danger of losing their jobs, I’m with Cassidy on this one. We have some of the richest companies in the world here in the Valley, and we saw 10.5% unemployment in June in the San Jose-Sunnyvale-Santa Clara metropolitan statistical area, which means some 94,300 people classified as unemployed (that doesn’t count the underemployed, or the people who have given up looking for work).
Speaking as a minister, I wish Congress and the president and CEOs would realize this isn’t about getting political points or pleasing shareholders.