A Story for May Day: The Fed, Apple, and Trickle-Down Economics
Robert Reich
Wednesday, May 1, 2013
It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.
The reason big companies aren’t creating more jobs is consumers aren’t buying enough to justify the expansion. And government is cutting back on spending.
Big corporations are borrowing simply in order to push stock prices up and reward their investors.
It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns.
Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse.
Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we’ve learned before, trickle-down is a fraud. Nothing ever trickles down.
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