David Kirkpatrick

August 21, 2009

US companies are cash-rich

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 3:01 pm

And all this mattress stuffing isn’t doing much for the economy. The free market needs liquidity or things tend to stagnate.

From the link:

American companies are now sitting on record mountains of cash in an indication of deep worries about the economy’s future.Even though analysts forecast a return to U.S. economic growth by the third quarter, companies have yet to show any major signs of rehiring or spending.

And with consumers also hoarding cash at near record levels, a cautious stance by companies could add to worries about the sustainability of an economic recovery.

March 26, 2009

A.I.G. backlash, the other side of the coin

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:45 pm

An op-ed from the New York Times subtitled, “The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.”

deSantis’ resignation letter offers a little perspective on some misplaced outrage (I’m just as guilty as the next blogger, journalist, concerned citizen) going on and how badly the public relations aspect of the ongoing bailouts is being handled by both the government and the firms receiving taxpayer money.

Of course if no taxpayer money was involved in any of this, there’d be no need for “good” PR or concern about who gets hurt and who doesn’t. We have a free market capitalist system until things go south, which makes it not quite a free market capitalist system. Hmm.

From the link:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

February 26, 2009

Free markets=crazy?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 4:03 pm

I’m thinking Harvard Law is the one full of the crazy here.

From the  link:

I don’t know whether this belongs in the comic-relief category or the future-threats category, but the Harvard Law School is having a conference to analyze the “free market mindset.” The basic premise of the conference seems to be that people who believe in limited government are psychologically troubled.

The conference schedule features presentations such as “How Thinking Like an Economist Undermines Community” and “Addicted to Incentives: How the Ideology of Self Interest Can Be Self-Fulfilling.” The most absurd presentation, though, may be the one entitled, “Colossal Failure: The Output Bias of Market Economies.” According to the description, the author argues that the market “delivers excessive levels of consumption.” Damn those entrepreneurs for creating so much wealth!