Live data from Hacker News

Why Are Corporations Hoarding Trillions?

nytimes.com

121–130 of 412 posts

Re: Why Are Corporations Hoarding Trillions?

#121
post #18

Earlier quoted context omitted.

Yeah, I'm not sure what the author was trying to say there, because that's not even close to true. The US wasn't getting anywhere near to paying off the national debt in the 1990s. https://en.wikipedia.org/wiki/National_debt_of_the_United_St...

At the dawn of the 2nd Bush administration, the US was projected to pay off its debt within ~10 years. The tax breaks and wars following 9/11 wrecked that projection, obviously.

This chart illustrates the cost of those policies: https://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/2...

Re: Why Are Corporations Hoarding Trillions?

#122
post #57
post #14

This article does a good job of explaining: http://www.dailyfinance.com/on/corporations-cash-hoard-trill... Some interesting excerpts: "Four of the top five holders of cash are tech companies ...who together possess...about 23 percent of all cash owned by corporate America today. Overall, the tech sector controls more than half of such cash" "about 60 percent of [non-financial corporate] cash piles are offshore and s…

The simple answer is that these companies have leveraged the immense economies of scale in their info-tech niches, and are soaking up billions of consumers' money but there's nothing else for them to buy. This is the sort of purchasing power imbalance that caused the Great Depression. The good news is that even if Depression hits, we still have access to web apps.

We may not have farms, but at least we'll still have farmville.

Re: Why Are Corporations Hoarding Trillions?

#123

Earlier quoted context omitted.

This is the ultimate problem with "trickle down" economics. Capital doesn't drive growth. Lack of capital limits growth, but excess capital doesn't generate additional growth. Demand drives growth and 35 years of stagnant wages (wages are basically where they were in 1981) have put a chokehold on growth. This is why you have the seemingly incongruous effect of high taxes encouraging growth and low taxes stifling it.…

That's not "trickle down" economics, which is not actually a real thing at all. That's a nonsensical political term that the Democrats seized upon during Reagan's "supply side" economic policy; which has beginnings much earlier than Reagan, and likely older than Jean-Baptiste Say's formulation. There isn't an idea that alone "capital drives growth," that's an idea that Keynes came up with by misreading Jean-Baptiste…

It doesn't really matter who said or misunderstood what, does it? I don't mean this as a personal attack but your comment is devoid of content.

Re: Why Are Corporations Hoarding Trillions?

#124
post #107
post #96

Earlier quoted context omitted.

a simple response would be progressive taxation. Tax assets, ideally non productive ones, and redistribute to the poor for use in non discretionary spending - like dinner. A modern "new deal" for elder care would also do the trick..

> A modern "new deal" for elder care would also do the trick.. Oh please no! Boomers have already pillaged and mortgaged the futures of the youth enough already. The last thing we need is for them to stick it one more time with a new set of unpaid indefinite obligations. For a simpler approach, just give everybody $X (00 or 000?) either one off or repeatedly. It's as progressive as it gets and at least some youth wil…

unpaid indefinite obligations

I'm pretty sure elder care isn't indefinite. Maybe we end it after this current generation of old people (our parents/grandparents) are no longer around.

One of the biggest social problems we'll face in the next 10 years is millions of people with dementia who can't take care of themselves just... existing. What do we do?

One fun story I've heard is a doctor gave an old woman with full blown dementia an operation to keep her alive, then she lived another 15 years just completely out of touch with the world. The family had to sell all her belongings (eating through their inheritance too), then pay even more to keep her in full time care. It makes no sense, but that's the standard set of rules. Little known fact: before medicare will pay out for extend services, they force your relatives to sell all your belongings (property, land, investments, etc) to pay for medical services before any other payments kick in.

Re: Why Are Corporations Hoarding Trillions?

#125
The liabilities side of US corporations balance sheet makes the cash holdings far less significant than they appear. When one imagines a "hoard", we don't assume the fire breathing dragon also has bills that match the equivalent of that hoard or beyond.

The expected EU tax payments for companies like Apple take another large bite out of how much of that cash is really their own.

The word "hoard" is correct ("a supply or accumulation that is hidden or carefully guarded for preservation, future use, etc.") but suggesting that this money can just be unleashed upon investors or the general population in the form of capex or wage increases is silly.

Re: Why Are Corporations Hoarding Trillions?

#126
post #104
post #88

The US is out of demand. Workers are spent out. Thus, there's no need to increase output, because nobody has the money to buy it. The US has huge excess manufacturing capacity, thousands of malls which could handle more traffic ("there's always parking at Sears", a rather pathetic ad), and services which could handle more business. There's a glut of capital, plenty of available unemployed or underemployed workers, no…

> The US is out of demand How is the US out of demand? Peak consumption years of population are between twenties and fifties and the biggest cohort of US demographics - the millennials - is just getting started. They crossed over the Boomers last year and now are the largest group. Behind them the younger (Gen Z) equally large in size is ready to backfill in another 15 years. It is true that demand from Boomers is do…

>the biggest cohort of US demographics - the millennials - is just getting started

As a millennial, this is hilarious to me. I hope your startup doesn't depend on millennials consuming ANYTHING. The best you can MAYBE achieve is having people disable their adblocker.

Re: Why Are Corporations Hoarding Trillions?

#128

Earlier quoted context omitted.

This is the ultimate problem with "trickle down" economics. Capital doesn't drive growth. Lack of capital limits growth, but excess capital doesn't generate additional growth. Demand drives growth and 35 years of stagnant wages (wages are basically where they were in 1981) have put a chokehold on growth. This is why you have the seemingly incongruous effect of high taxes encouraging growth and low taxes stifling it.…

That's not "trickle down" economics, which is not actually a real thing at all. That's a nonsensical political term that the Democrats seized upon during Reagan's "supply side" economic policy; which has beginnings much earlier than Reagan, and likely older than Jean-Baptiste Say's formulation. There isn't an idea that alone "capital drives growth," that's an idea that Keynes came up with by misreading Jean-Baptiste…

There is a school of economics, sometimes called the "freshwater school" (from the Chicago School and Milton Friedman) which claims you can't run out of demand. This is a classic position. But productivity is now so good that we can run out of demand. Classically, countries ran out of land, labor, capital, or management before they ran out of demand. There were occasional recessions, but that wasn't a permanent condition. That's over in the US. Plenty of land outside NY and SF, lots of workers (some might need retraining, but it's not like the real labor shortage of WWII), oceans of capital, and lots of experienced managers. But nothing to do with it, because the demand isn't there.

This is an alien concept to many people and economic policy makers. See the parent article. They report on a capital glut, but are puzzled that it exists. The Fed keeps pumping capital into the economy in hopes it will fuel growth. But pumping capital into a capital glut doesn't do much.

Look at Japan since 1989. Japan hit this about two decades before the US did. They never really figured out what to do about it. That's discouraging, because if Japan had a solution, we'd have a success to look at.

So nobody really knows what to do about a capital glut and a demand shortage.

Re: Why Are Corporations Hoarding Trillions?

#129

Earlier quoted context omitted.

> The CEO of WarMart has mentioned this So a business model of screwing every penny out of your staff and suppliers can result in customers too poor to buy your merchandise? Who could have forseen this?

How much do you want to pay for goods in order for that cashier to make 40K?

The money for a cashier to make a livable wage doesn't have to come from increasing the costs of all goods. The point of the article was essentially that companies have more money than they know what do with. If they paid their employees more, not only would it be better for the employees, it would be better for the company as more money in the hands of the poor will drive up demand for goods.

Re: Why Are Corporations Hoarding Trillions?

#130

Earlier quoted context omitted.

> The CEO of WarMart has mentioned this So a business model of screwing every penny out of your staff and suppliers can result in customers too poor to buy your merchandise? Who could have forseen this?

How much do you want to pay for goods in order for that cashier to make 40K?

That doesn't hold. Look at the prices at Costco, and go read up on how well they pay.
Post reply on HN