Are We Blind?

This morning I heard the news that Coca Cola Enterprises has announced plans to buy back $1Billion of its own stock.  Apparently this announcement is part of a larger pattern of corporations engaged in similar buy backs.  At least in part, the strategy reputedly is driven by an intent to help shareholders defer taxes.  But the practice also solves a 'problem' for the corporations, many of which are awash in cash reserves for which they have no immediate investment plans.  It is no secret that much of the world-wide corporate sector is sitting on such huge cash reserves.

The irony is, of course, that during this same period, unemployment rates across the globe, and particularly in some parts of Europe and the United States, are at or near record levels, with little prospect of a positive change any time soon.  And as importantly, many countries across the globe are in fiscal difficulty due to rising expenses and declining or stagnant tax revenue -- leading to large accumulated deficits.  Indeed, many governments are being told to institute deficit cutting programs, mostly focused on reducing spending on 'costly' programs such as health care, and apparently 'expensive', but unfunded, pension commitments.

The United States is caught in governance gridlock over an unwillingness on the part of a significant segment of policy makers to consider tax increases for the wealthy and for the corporations.  The outdated, trickle-down notion being that such increases will act as a disincentive for job creation.  Canada is in the process of reducing its corporate tax rates yet again.

In the meantime, the cash-rich corporations, apparently bereft of any further entrepreneurial imagination -- which might indeed create employment -- are using their 'surplus' cash to buy back their own shares.

Does anyone else have the sense that the Matrix is in the process of being torn wide open?