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Posts published in “Day: December 26, 2017”

Distraction

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In Idaho, there was the Melaleuca response: Bonuses for employees, starting at $500 and rising based on longevity, on occasion of the congressional passage of the Republican tax bill.

Nationally, there were others. Per USA Today: "AT&T and Comcast said they would award one-time $1,000 bonuses to a total of more than 300,000 non-management employees. Wells Fargo and Fifth Third Bancorp said they’ll raise their base pay to $15 an hour. Wells Fargo also is setting aside $400 million for charitable donations next year and 2% of its after-tax profit for philanthropy in 2019, while Fifth Third is tossing in a $1,000 bonus for workers. Boeing is moving ahead with $300 million in investments, including $100 million in corporate giving."

It's nice to see a little spreading-the-wealth, on the part of large corporations that can easily afford it. But this is a shiny object only - a gimmick to celebrate the passage of a bill lining their pockets. These bonuses and talk - just talk, for now - of other spending has nothing to do with the substance of the tax bill. It is intended to make people feel good about the bill, hoping there's no real practical connection between the two.

The bill, to begin with, won't take effect for quite some time.

Bill Kristol, a veteran conservative spokesman, on Twitter: "Don’t the $1000 bonuses suggest the big corporations didn’t really need a tax cut for capital investment? If they’re so flush with cash perhaps they didn’t need a tax cut at all? And if we just want to borrow from the future to give out money today, why the corporate middle man?"

He's right that they are flush already. Samuel Bernstein responded, "Corporate profits and liquid assets have never been higher in the United States. And interest rates are near record lows. No shortage of capital. Full stop."

George Ledyard added in the same thread, "We live in a consumer driven economy. Our economic strength was never greater than when the middle class was thriving. That coincided with high Union membership and good wages. ... The middle class has not regained the buying power they had back in 2008 when the crash happened. In fact that the have experienced a several decades long decline. Corporation haven't invested because there isn't enough demand."