Reply #12: Not surprising. Companies are conservative in bad times. [View All]

Not conservative as in Republicans but conservative in terms of not taking risk, not pushing the envelope.

If company thinks there is trouble on the horizon they will hoard cash.

Companies have debt obligations. Getting stuck in a cashflow squeeze as poor economy due to reduced revenue is a trap that is best avoided by having a fortress of cash.

In economics this is called "failure of the individual". Each individual company is doing what is the most likely to allow them to survive meanwhile the combined effect is what causes the situation that they are fearing.

This is why companies can't push themselves out of a recession on their own. It requires govt funding to create a cycle where increased demand requires increased hiring which causes increased demand which causes increased hiring..... etc.

The so called "stimulus" bill was mostly non-stimulative. It was a lot of untargeted spending with a fancy name. True stimulus needs to put a substantial number of people to work and increase revenue at the bottom (poorest people tend to spend 100% of their income).