We've been discussing this for months but the end-game is approaching so let's reiterate again: CEOs and corporations aren't even pretending that the GOP's tax cuts will trickle down to their workforce.
Bloomberg has a fresh round out of quotes from CEOs of major corporations reminding us that congressional Republicans are making promises that CEOs are not making.
Robert Bradway, chief executive of Amgen Inc., said in an Oct. 25 earnings call that the company has been “actively returning capital in the form of growing dividend and buyback and I’d expect us to continue that.” Executives including Coca-Cola CEO James Quincey, Pfizer Chief Financial Officer Frank D’Amelio and Cisco CFO Kelly Kramer have recently made similar statements.
“We’ll be able to get much more aggressive on the share buyback” after a tax cut, Kramer said in a Nov. 16 interview. [...]
One leading proponent of Trump’s tax plan, JPMorgan Chase & Co. CEO Jamie Dimon, has lamented that corporate taxes weren’t cut under former President Barack Obama and says companies would both return money to shareholders and invest in their businesses.
“Had we had the right system seven years ago, trillions of dollars would have been retained. Some would have been paid out in dividends and stock buybacks, but so be it, that’s your money,” Dimon said last week at the Economic Club of Chicago.
So, what's going on here? Why have they stopped pretending that tax cuts will help average people?
I'm sure there are many correct answers to that question, but I'll say it's because we all know the truth. They're better off being honest about it now than being held responsible later. No one can look back and say corporations promised to hire more people or raise wages, because they aren't doing that.
There will almost certainly come a day when Trump points fingers, probably via Twitter, that these corporations will respond to by pointing out that they never made the promises that Trump or Republicans in Congress did. And they'll be right. They're telling us right now what they're going to do.
This is related, and may be a larger topic for another day, but with each passing year we inch closer to a post-employment economy in which labor is largely automated and the largest corporations no longer depend on a stable human workforce. As we've covered recently, some corporations have said they plan to use the GOP's tax cuts to automate a larger share of their workforce and investors have been betting big on automation.
Inequality is bad now, but it can get much worse. Some company executives make 300 times more money than their average employee, but what if they no longer need employees?
That reality is still many years away, but I do believe what we're seeing today is a symptom.