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Corporate Responsibility and Economy:

If a human being, as a citizen, does not obey the laws of the country, he ends up in prison. What
happens when a corporation does the same thing? It is mostly a monetary punishment coming out
of the pockets of the shareholders. Where is the responsibility of senior management or Board of
directors? Exxon-Valdez, BP-Gulf, Union Carbide-Bhopal, Enron are not the only examples but there
are too many to mention. My point is what is the exact responsibility of the corporate citizenship?
Corporations are vested with the full rights of the constitution. Do the corporations have any social
responsibility beyond donating a few million dollars? In these days of economic crisis, Corporations are
sitting on huge piles of unused cash. That is 1.8 trillion dollars. Granted these corporations may have
wanted to save for a rainy day. The question is whether you need one umbrella or dozens of them! The
sound economic practice is to have cash or the equivalent reserves of 1.5 or 2 times of your liabilities.
Beyond that, Corporate assets are considered unused i.e. unproductive. Excessive cash holdings are
considered damaging to the national economy. My radical solution is to force the corporations to use
these excessive reserves.

Any corporation holding excessive cash reserves must find one of following solutions. (1)
Declare dividends of excessive reserves, this can release almost a trillion dollars or (2) pay 25% tax. This
can release $ 450 billion in to economy or (3) invest same amount in innovations, research or finance
start ups, small and medium size businesses related to their activities. Since money circulates nine times
the effect would be pumping several trillion dollars into the economy. The rising economy will reduce
deficits and perhaps help to reduce the debt burden. Republican will love this solution as the
corporations have an option to pay tax or pay dividends or invest in a productive economy.

All we are asking corporations to do is to take their citizenship seriously and be socially
responsible. Put your food where your mouth is. Your existence depends on the society- nay… say on
the well being of the society. The trillion dollars corporations put into society will return to them many
times in the form of more revenue and profit. Cash reserves of $ 1.8 trillion are derived from the
consumers who spent on their products. By restricting the flow of money, corporations have stymied
the recovery of the economy- ultimately to their detriment for loss of job markets. It is a very short

sighted approach. Let me end this with what Thomas Jefferson had to say in 1802. “I believe that
banking institutions are more dangerous to our liberties than standing armies. If the American people
ever allow private banks to control the issue of their currency…….., the banks and corporations that will
grow up around the banks will deprive the people of all property- until their children wake- up
homeless on the continent their fathers conquered.”