A fair amount has been written, some of it by me, about the extraordinarily large volumes of cash that U.S. corporations have amassed due to a combination of weak investment and tax avoidance strategies. But as Richard Waters points out, this is hardly an across-the-board phenomenon. Instead, a handful of firms account for a huge share of the money:
By the middle of last year, the concentration of wealth in the hands of a few tech winners had left just six companies – Apple, Microsoft, Google, Cisco, Oracle and Qualcomm – with more than a quarter of the $1.5tn held by US non-financial corporations, according to rating agency Moody’s.
With nearly $150bn in its coffers, Apple alone was sitting on close to 10 per cent of corporate America’s cash.
This is so much money that individual firms’ decisions arguably become macroeconomically relevant. That Apple cash is about 1 percent of U.S. gross domestic product. Of course with many earnings coming from abroad these days you expect to see some detachment between firm decision-making and the state of the American domestic economy. But as a practical matter were this money to be spent a large share of it would likely be spent in North America.