Last week we asked why companies are sitting on their money rather than investing it. Is this irrational pessimism or sensible caution?
Most of our readers seemed to feel that the tightfistedness is warranted. Reader Greg Zerovnik cited the healthcare reform bill of 2010 as the big wild card:
The costs to businesses for future healthcare obligations can’t be figured in any accurate way. There are too many variables. . . . Uncertainty is the bane of all business planners.
Reader Carl Rodgers suggested that the fault was as much with Wall Street and shareholders as with overly cautious executives:
Companies’ CEOs are judged on not quarterly but weekly stock market value, so it is necessary to keep a tight ship if they want a good valuation.
[EXPAND More]Reader Gary Tomak, meanwhile, advised that we look less at fear than at opportunity:
The ability to have an abundance of cash available in exchange for long-term low-interest debt puts large corporations in a strong position for acquisitions should the likelihood of a significantly greater U.S. or European downturn materialize. Cash on hand is planning for the future, not fear of the present.
On another subject, reader Robert Chapman Wood had feedback on our most recent Feedback, one in which readers had weighed in on whether free trade was really creating U.S. jobs:
Free trade theory looks scientific, so it’s what we do in U.S. universities, and our politicians don’t have much alternative but to go along with it. But real markets aren’t mathematical constructions—they’re human activities.
Finally, reader josephknechtdvm was struck by our post lamenting America’s dropping SAT scores:
Nowhere more is Peter Drucker’s wisdom needed than in education from primary school to graduate and professional schools where intellectual discipline and rigor assume primacy over creating feelings of self-esteem and a correct social awareness and attitude. [/EXPAND]