THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 30, 1995 TAG: 9510280211
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Editorial
SOURCE: Ted Evanoff
LENGTH: Medium: 84 lines
Up in Washington the talk last week was of balanced budgets and tax cuts. Doing both seems like a magic trick. No matter. Not only Washington seems lost in the magic land.
If you look around the world today, and look at America, we seem distracted.
HIGHLAND PARK, Mich., Oct. 25 (Bloomberg Business News) - It's not hard to guess one agenda item for today's planned meeting of representatives of Chrysler Corp. and Tracinda Corp., Chrysler's largest shareholder: Chrysler is sitting on $6.4 billion in cash, and Kirk Kerkorian, Tracinda's owner, wants some of that booty for shareholders.
It's true the shareholders own public companies. It's also true we've reached the point where what's good for the shareholders isn't necessarily good for the community. Car plants eat money in good times and bad. Chrysler needs the cash more than its shareholders need the dividends.
Of course, companies today, especially large public companies, are enthralled by the casino on Wall Street.
CINCINNATI, Oct. 25 (Bloomberg Business News) - Procter & Gamble Co. said fiscal first-quarter earnings rose 13 percent on higher international sales and the benefits of continued cost-cutting.
Places like Cincinnati, Milwaukee, Pittsburgh, they were the '80s Rust Belt. Today they shine. Of course, they shine without several million factory hands shed a decade back.
No wonder the average American worker earns $7.43 an hour today, down from $8.26 in '75. The '81 recession devestated the industrial Midwest. Washington created the recession to stall the inflation that originated partly from waging war in Vietnam without raising taxes.
The recession, coming on the heels of the farm crisis, scoured away jobs. Remember the farm crisis? Washington stopped grain exports to the Soviet Union. The move raked the Midwest, drove farmers off the land, contributed to billions of dollars in programs to prop up the Farm Belt.
Today, companies that fired factory hands in the '80s have shed millions of office hands. But you have to wonder, lean and mean or not, how focused are American companies?
Wall Street buzzed last week. Talk was of combining NationsBank and BankAmerica into the largest U.S. bank. Fascinated with enhancing shareholder value, we neglect our real economic interests.
PARIS, Oct. 25 (Bloomberg Business News) - Banque Nationale de Paris has signed a credit facility for almost $2.25 billion to finance the construction of Lingao nuclear power station in China.
What's happened abroad, of course, is hardly news. Other nations emerged from World War II in ruins. What helped them was a simple idea. We opened our markets to their exports.
SINGAPORE, Oct. 25 (Bloomberg Business News) - Singapore's non-oil exports grew 18.6 percent in September, after expanding 19.2 percent in August, driven by microcomputers, disk drives, integrated circuits, printers, capacitors, radio-telegraphic receivers, videocassette recorders and their parts.
Investing in industries that sell abroad creates good jobs, whether in Singapore or the United States.
We have one significant problem, though. The U.S. fails to stimulate exports, says the Competitiveness Policy Council, a bipartisan federal advisory panel. We invest a pittance on R&D, even less on export development. We prefer other uses for our idle cash.
ROCKVILLE, Md., Oct. 25 (Bloomberg Business News) - Mid Atlantic Medical Services Inc. said it has approved the repurchase of as much as $40 million of its common stock.
Medicare and Social Security, urban renewal and Aid to Families with Dependent Children - America has heard lots of promises from Washington, but now a new mood is afoot. Convinced the citizenry feel impoverished, Washington intends to roll up its sleeves, put the poor to work, cut aid for the elderly, balance the checkbook. Lots of people favor a balanced budget for a single reason. Budget deficit is another way of saying borrowed money.
Government borrowing diverts cash that could be used for investment in projects that build wages, such as new factories. Of course, this is the magic land. The House last week promised $245 billion in tax cuts and a balanced budget. The bill was called historic.
Nothing was said about Washington and Wall Street and American corporations steering the freed-up cash into useful functions, like restoring high-wage jobs.
That would be historic. by CNB