Remember a few years ago when Democrats and the mainstream media were moaning about how businesses were hoarding cash and buying back stock instead of investing? The economy had recovered and business was starting to boom, we were told. Yet, corporations weren’t expanding and/or investing, and this was preventing the Obama recovery from being glorious.
Why were corporations being so churlish? For most on the left and in the mainstream media, it was down to greed. There was also the suggestion that corporations wanted to deny Obama his recovery.
In reality, the explanation, was caution coupled with, and fueled in part by, concern about excessive government regulation and taxation. Yet, these considerations formed little or no part of the left’s narrative.
Now, corporations seem poised to expand and invest with a vengeance. Steve noted yesterday that, with the passage of the tax reform bill, Comcast NBC Universal, Boeing, Wells Fargo, and Fifth Third Bancorp have announced major spending and investment plans on account of the bill.
Moreover, there is good reason to believe that business expansion and investment had already increased due, in part, to the realization that the Trump administration is serious about getting rid of many burdensome regulations and passing tax reform. The spike in overall economic growth and the stock market boom likely are, in part, reflections of this phenomenon.
Leftists are probably gnashing their teeth at the disparity between how corporations behaved under Obama and under Trump. What could possibly explain this obvious unfairness?
It’s called incentives or, more broadly, economic reality.