Documents leaked to the Associated Press suggest that the woeful Pittsburgh Pirates might have pursued a strategy of losing in order to maximize the team's profitability in the last three seasons.
By slashing its payroll to the bone, the league-worst Pirates have both controlled costs and qualified for maximum money under baseball's revenue sharing agreement, which taxes the highest-spending teams and distributes the money to the basement dwellers. Teams are supposed to use the revenue on new players, but the documents suggest Pirates' owners have either pocketed the money or used it to pay down debt on their new stadium.
If the Pirates' strategy sounds familiar, it's because it typifies the response of U.S. companies since the economic downturn. Corporate profits are soaring nationwide, but companies are sitting on their cash -- $1.8 trillion of it -- rather than hiring because demand is weak and debt overhang is scaring firms away from investments. Just like baseball's worst team, companies are keeping payrolls trim to boost earnings reports, and they're using their revenue to pay back the debt they acquired in the upswing rather than hire new talent. Sorry to say it, America, but these days we are all the Pittsburgh Pirates.