A rare moment of truth in the corporate world

An awkward — but extremely telling — moment arose yesterday at a Wall Street Journal “CEO Council” event that featured the Trump administration’s top economic policy hand, Gary Cohn, as a key speaker.

John Bussey, an associate editor with the Journal, asks the CEOs in the room, “If the tax reform bill goes through, do you plan to increase investment — your companies’ investment — capital investment,” and requests a show of hands. Only a few hands go up, leaving Cohn to ask sheepishly, “Why aren’t the other hands up?

  Vox

Now ask them specifically if they'll pass their savings on to labor.

Last month, the White House released a paper arguing slashing the corporate tax rate would increase average household income.

Kevin Hassett, chairman of the Council of Economic Advisers, said on a call last month the main reason why cutting the corporate tax rate would boost wages is because doing so would make it less expensive for companies to invest in capital assets such as machines.

“More assets like machines let workers produce more, and when workers can produce more, businesses can afford to pay their workers more,” he said last month.

  The Hill

We've seen this before. They can, but they don't.

Credit Suisse showed that the only buyer of stock since the financial crisis has been the corporate sector', i.e. companies repurchasing their own shares.

[...]

[C]orporate incentives have been perverted in the past decade, and instead of allocating capital to ensure long-term business growth, companies have rushed to cash out, with shareholders benefiting the most, while management teams got record bonuses as a result of their stock price-linked compensation bogeys.

[...]

Which is why we were amused to observe the [...] brief interchange yesterday between Gary Cohn and an audience made up of executives, where in the span of a few seconds Gary Cohn realized that his entire economic policy had been a disaster.

[...]

And while the former Goldman president tried to cover up his disappointment with laughter, the cognitive dissonance between the stated intention behind tax reform, and what it would ultimately achieve, or rather not achieve, was painfully obvious to everyone.

  Zero Hedge

...but hey, do what you want...you will anyway.