As is well known, the American economy has been in a recession or slogging through with anemic growth over the past three years.  Some say this is the new normal or at least a long-term condition.  Meanwhile, American firms are holding record amounts of cash, for a brief period this year Apple had more cash on hand than the federal government.  The political class and business commentators have been speculating why businesses are holding so much cash.  Some on the conservative side have made the regime uncertainty argument that we do not know what is coming from the government and that has created enough extra uncertainty to make businesses wary of investing right now.  However, Paul Krugman, (yes, it pains me to agree with him but credit where it is due) points out that business activity and attitudes did not change when Congress moved significantly to the right after the 2010 elections and the reality is little legislation of any significance has moved since then.  It stands to conclude that the election added a level of certainty to the political expectations, the business class could breathe a collective sigh of relief, and move forward with these pent up plans it had.

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