Looking Beyond Infotainment

The need to be smarter

a blog post by Cornell Cox, July 20th, 2012. All articles posted may be read at the blog site by clicking Critical Actions or reached by search engine, type in: Critical Actions: What's Your Opinion? Anyone desiring not to be on this mail list may reply to CornellCox@msn.com.

Salient to our latest debate on "profits" and "misinformation/being incorrectly informed" are two current columns:  One highlighting the success of large corporations by David Cay Johnston, Idle corporate cash piles up; the other by Kathleen Parker, How to get smart: News literacy programs train readers to look beyond infotainment.

Parker, the conservative columnist from Camden, SC, writes about the retiring 30-year-veteran-congressman: "Ackerman was asked to comment on the relative lack of comity on Capitol Hill. Did it ever exist?


Not really, he said, but at least Democrats and Republicans used to be friends. Today, crossing the aisle is tantamount to treason. The problem isn’t only Washington but society as a whole.


“I think the people have gotten dumber.”


Johnston, who I've quoted from "Perfectly Legal" and "Free Lunch," writes Idle corporate cash piles up (He concisely covers the topic in this three-minute video): "The Fed’s latest Flow of Funds report showed that U.S. nonfinancial companies held $1.7 trillion in liquid assets at the end of March. But newly released IRS figures show that in 2009 these companies held $4.8 trillion in liquid assets, which equals $5.1 trillion in today’s dollars, triple the Fed figure.

Why the huge gap?

The Fed gets its data from the IRS, but only measures the flow of funds in the domestic economy. The IRS reports the worldwide holdings of U.S. companies, which I think is the more revealing measure."

Johnston further reports, "Bigger profits are good news, but it would have been better news had those increased profits been put to work, not laid off in accounts paying modest interest. Hoarding corporate cash in bank accounts, Treasuries and tax-exempt bonds poses a serious threat to the economy, as Congress recognized when it enacted the corporate income tax in 1909." Adding that,  "Since the income tax system began, Congress has authorized a tax on excessive accumulated earnings to limit damage to the Treasury — and the economy — when companies hold far more cash than their operations require. Without the accumulated earnings tax, corporations can become bloated tax shelters instead of engines of growth."

David Cay Johnston

David Cay Boyle Johnston is an investigative journalist and author, a specialist in economics and tax issues, and winner of the 2001 Pulitzer Prize for Beat Reporting. 

Born: December 24, 1948 San Francisco Education: Michigan State University, San Francisco State University, University of Chicago