The current economic conditions in the United States has disappointed many in the government and business sectors.
Our current conditions have been decades in the making and business needs to shoulder most of the blame. In the 1980s, business started out-sourcing and off-shoring, that reduced employment in manufacturing and information technology industries. This gutted the middle class that had been the economic engine in the U.S. since World War II.
After that blow to the economy, the housing crisis hit reducing the largest asset of the middle class. Meanwhile the top 1% gave themselves raises for “managing” their business so well.
In the meantime, corporate America’s cash hoard has grown to record levels. Moody’s Investors Service reported in 2013:
The US non-financial companies that Moody’s rates held $1.45 trillion in cash at the end of 2012, up 10% from the record level of $1.32 trillion at the end of 2011…. Currently leading the pack with the most cash are Apple, Microsoft, Google, Pfizer, and Cisco. These five companies have $347 billion or 24% of the total non-financial corporate cash balances. This amount is up from $278 billion or 21% for the top five in 2011.
While they sit on piles of cash, they are waiting to hire, invest, and expand; for the consumer to spend. The same consumer that they fired, hired at reduced wages or part-time; and whose income has not been growing with the economy.
This chart shows how U.S. economic growth is not translating to higher family incomes. The term “real” means the figures are adjusted for inflation. U.S. real GDP per capita, a measure of average total income per person, has increased since 1999 while the real median income per household has been flat, indicating a trend of greater income inequality.
It is up to the large American corporations and the wealthier 1% to start spending and keep spending until America booms again!