According to an article on CNN.com, with consumer spending slowing down to housing appreciation decreases, energy increases and interest rate increases, the economy will not only sing along just fine but grow. The reason is because businesses, now flush with cash after five years of Bush tax cuts, will start investing in their own business. Great news. Only took about five years for them to do this. The idea is neat, and honestly I hope the business writer is correct on her assumptions but for me it just rings false.
The reason is simple: why would a company spend a healhly amount of money on itself when the very people it depends on, the consumers, are indicating they may not be buying their stuff for a while? That is like building a new wing on a house while a forest fire rages a few miles away. In theory, if the business invest on themselves, that means more stuff being made, which means more workers, etc etc, but in this new global age, I don't see most of the money making it into American hands but foreign hands. As our trade deficit shows, once american money goes overseas, only a very small percentage makes it back.
Most distrubing in the article was no mention of the workforce. For all the investing companies may (and its a big may) make, none of the talk seems to be about their own workers. Raises and bonuses for the average worker will probably continue to decline as will pensions and other benefits. All this indicates to me, that for a country where businesses has become king, if they do gain the reigns on the economy, they might not never let it go and the only ones that will be hurt is the average worker and the consumer. Hopefully time will prove me wrong.
No comments:
Post a Comment