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Why Are Corporations Hoarding Trillions?

nytimes.com

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Re: Why Are Corporations Hoarding Trillions?

#131

Post by ssmoot »

JustSomeNobody wrote: post #108
rodgerd wrote: post #106

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?

I feel like before people should be allowed to put this forward as a serious argument, they should also put forward the numbers behind it.

How much of your current Walmart receipt goes to the non-executive-management in-store staff?

The implication of course is that it would be significant.

It's echoes of the uninformed arguments around the UAW though. Back in 2008 the $70 was all anyone could talk about. That despite the fact that included funding for benefits the Japanese automakers didn't provide because they were socialized. Also completely ignoring that total labor cost was around 10%. Just how much did people think it could be cut?

Cut compensation and benefits in half and you save a whopping $1,500 on that $30,000 car. You know, the domestic one that's already cheaper that you weren't considering in the first place.

So would I tolerate my grocery bill being 2% higher to give cashiers/stockers/etc a living wage? Absolutely. I pay a lot more than that just to avoid shopping at Walmart in the first place (the parking lot is always packed, the lines are long, the aisles a mess and it's further away than Fiesta, the asian market, Albertson's, Kroger's or Target).

What if the receipt was 10% higher? If it provided a living wage, decent benefits, and improved their stores generally then yeah, I probably would. The spread between the asian market and Target is already much much higher than that.

More than that? Not unless they excelled in some area. For packaged meats Target does a real decent job. For produce the asian market is where it's at. For bulk items at low prices Fiesta rules. The others are sort of middle-of-the-road in offerings, at decent, if not amazing prices.

But I seriously doubt anything like or above 10% would be close to necessary to achieve what was proposed.

Re: Why Are Corporations Hoarding Trillions?

#132

Post by Skunkleton »

sgt101 wrote: post #96
Animats wrote: 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…

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..

Taxes might be a good short term band-aid, but I suspect that there will need to be reform in labor laws for lasting effect.

Re: Why Are Corporations Hoarding Trillions?

#133

Post by zardo »

throwaway_1010 wrote: post #95
forgetsusername wrote: post #20

Earlier quoted context omitted.

> It's the same reason I save my money: for opportunities when prices are low. So then you buy low, and no longer have money saved for even lower opportunities. The logic of this plan doesn't make sense. You can't both be saving for and spending on opportunities, and you have no way of knowing when or what opportunities might arise. > Most people with any kind of money think this way. According to...?

The logic of this plan is basic and has stood the test of time in any multi-party market. You can save and spend at the same time, I do it all of the time, it's called budgeting. You are mired in theoretical perfection, absolutism, and a misunderstanding of how to profit from investing or trading. On the Street this "plan" is referred to as "Keeping the Powder dry". You don't [rationally] blow the whole keg of powder…

>What is your investment strategy? Invest at the market/stock highs?

I try to keep in mind that markets are unpredictable, and missing out on growth while you wait for the next crash can cost you money too, even if it doesn't feel as bad as a position you hold losing value. I invest about the same amount every paycheck whether people are crying bear, bull, bubble, or apocalypse.

Re: Why Are Corporations Hoarding Trillions?

#134

Post by evanpw »

frogpelt wrote: post #117

My theory is that when the QE rounds started and trillions of dollars were pumped into the economy (major inflationary red flag), the velocity of money dropped like a rock (major deflationary red flag) as a natural reaction. EDIT: The reason is likely tied to the fact that interest rates sat on the bottom for the last 5-8 years and holding money was just as valuable as investing it. See the article[1] on the St. Loui…

The increase in excess reserves is not mysterious. The Fed starting paying 0.25% on them in 2008 (now 0.50%) while other interest rates were near zero.

Re: Why Are Corporations Hoarding Trillions?

#135

Post by grahamburger »

jandrese wrote: post #94
Animats wrote: 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…

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.…

> money ends up being redistributed somewhat equally, spurring demand as the poor can suddenly afford a lot more good and services.

Does it? Maybe I'm just cynical but the idea of raising taxes on the wealthy sounds to me like just moving money from one set of rich white guys to another set of rich white guys. I vote one of them in to power at the local elementary school and the other every time I pull out my wallet. I'm not really convinced that either group as a whole spends their money more responsibly.

If we already had a social safety net reform in place, knew how much it was going to cost, and then pushed for higher taxes in order to directly fund the new safety net, that would be different. I think that's what PG meant recently when he said something along the lines of 'focus on poverty, not on income inequality'.

Re: Why Are Corporations Hoarding Trillions?

#136

Post by Skunkleton »

wutbrodo wrote: post #102
fennecfoxen wrote: post #29

Earlier quoted context omitted.

As a corporation, the traditional thing to do with cash you don't need is to return it to your owners, either through dividends or through share repurchases: If the owners wanted to own money sitting in a bank account, they could put the money in a bank account themselves. If they wanted to own a company, they'd be better off owning just the business part without a chunk of low-return cash attached. Beyond basic liqu…

> If the owners wanted to own money sitting in a bank account, they could put the money in a bank account themselves. This logic is completely absurd. The assumption of a shareholder trusting a company to hold cash "in a bank account" is that there's value in the ability for the company to deploy it rapidly in the event that they need it. If the shareholders held it in their collective bank accounts, then in the even…

I dont think that is what he meant. I think he meant that investing in a company who's value is 30% stock is like investing 70% into an company, and 30% into a low interest savings account.

That said, I don't agree. A company having cash reserves has value beyond money sitting in a personal savings account.

Re: Why Are Corporations Hoarding Trillions?

#137

Post by bsder »

ryanlol wrote: post #118
ju-st wrote: post #109

Earlier quoted context omitted.

As far as I know the US taxes the income of its citizens even when they live outside the US. So why can't the US just tax the offshore income of the companies?

Because the US needs the businesses, not the other way around.

That's quite funny.

If the US blocked a company from it's market, that company would collapse practically overnight.

The US is the most profitable market in the world with the EU running not too far behind.

Think about Alibaba--it's profit is about connecting Chinese sellers to the profitable markets in the US and EU--not about connecting to other Chinese suppliers.

Re: Why Are Corporations Hoarding Trillions?

#138

Post by crdoconnor »

koolba wrote: post #107
sgt101 wrote: 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…

If there's one thing that keeps surprising me about Americans, it's the ability to recite, with a straight face, the most blatant, self serving propaganda:

https://fair.org/home/convincing-the-young-to-blame-the-old-...

http://www.nakedcapitalism.com/2014/01/three-card-monte-gene...

Re: Why Are Corporations Hoarding Trillions?

#139

Post by kyledj »

JustSomeNobody wrote: post #108
rodgerd wrote: post #106

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?

Isn't the point of that statement in the context of this article that maybe we don't need to pay more for goods? If companies have so much extra capital, some of that could be turned into higher wages for employees, since we already are paying higher prices.

I don't actually have an opinion, but your statement is missing the point.

Re: Why Are Corporations Hoarding Trillions?

#140

Post by crdoconnor »

ryanlol wrote: post #118
ju-st wrote: post #109

Earlier quoted context omitted.

As far as I know the US taxes the income of its citizens even when they live outside the US. So why can't the US just tax the offshore income of the companies?

Because the US needs the businesses, not the other way around.

Nope. Lobbying dollars.
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