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Why Are Corporations Hoarding Trillions?

nytimes.com

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Re: Why Are Corporations Hoarding Trillions?

#221

Post by 13thLetter »

drzaiusapelord wrote: post #162
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…

Is this so bad? Falling into something of a European-type rut with permanent 8-12% unemployment and modest GDP gains? I remember the 90s. Everyone was buying shit non-stop. What kind of life is that? Sure it created jobs and growth but to the ludicrous end where we refused to accept the gravy train was ending. I remember Bush 43 pleading for Americans to "go back shopping" the black friday after 9/11 when the writing…

"Is this so bad? Falling into something of a European-type rut with permanent 8% unemployment and modest GDP gains? I remember the 90s. Everyone was buying shit non-stop. What kind of life is that?"

It was a pretty fabulous kind of life. People felt rich, there were shiny new buildings going up everywhere, the government's budget was running at a surplus, there was a general feeling of optimism and hope for the future. Given the choice, I'll pick that over trying to come up with reasons why our current situation of general political and economic misery is somehow morally better.

Re: Why Are Corporations Hoarding Trillions?

#222

Post by eric_h »

anshukla wrote: post #148
JustSomeNobody wrote: post #108

Earlier quoted context omitted.

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

"One leading hypothesis is that firms employing low-wage workers—such as fast-food chains—have significant monopsony power in the labor market; that is, they are the principal purchasers of low-wage labor in a particular job market. And a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more." - Krugman, http://www.ny…

Thanks for teaching me a new word (monopsony)! It's been a long while since my vocabulary has been increased with something that's not a millennial invention.

Re: Why Are Corporations Hoarding Trillions?

#223

Post by crdoconnor »

drzaiusapelord wrote: post #169
crdoconnor wrote: post #138

Earlier quoted context omitted.

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...

Counterpoint: Chicago pension crisis for retiring boomers. https://www.illinoispolicy.org/chicagos-63-billion-debt-burd... "When you include the city’s share of Cook County’s debt, Chicago’s total pension debt increases to $32 billion." Rahm's Record $589M Property Tax Hike OK'd https://www.dnainfo.com/chicago/20151028/downtown/record-pro... Note, this tax increase just gets Chicago above water for 48 months. It does…

An opinion piece that shrieks about raising property taxes on land owners and demands that it's only fair that retirees have their incomes slashed instead? A counterpoint?

Re: Why Are Corporations Hoarding Trillions?

#224

Post by hfourm »

seivan wrote: post #178
jandrese wrote: post #94

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.…

Capital seems to drive a lot of jobs to create startups that hire people. They might make it or they might not but at least they produced something that might eventually grow. Without capital dev jobs. No dev job, no sale job, no marketing jobs and etc. What we both want is basic income. But I'm not sure about taxing "rich" who could easily leave. Then you're not taxing the "rich" any more.

I hate the argument of the rich "leaving"

Where are they going to go? And once you come to the logical conclusion that only a few outliers will actually "leave", they will leave a void that someone will fill, and be taxed.

Re: Why Are Corporations Hoarding Trillions?

#225

Post by hueving »

Retric wrote: post #170
grahamburger wrote: post #135

Earlier quoted context omitted.

> 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.…

Government spending often involves a huge number of well paid workers. The phrase "Good enough for Government work." started because governments often have very high standards. ex: Compare accessibility on the web between government websites and startups. It's been diluted for various reasons that basically boil down to indirect corruption. PS: One of the odd things is just how poor people used to be. Work minimum wa…

That's not what that phrase means at all. "good enough for government work" is akin to "close enough", a reference to the half-assed nature of most government work.

Re: Why Are Corporations Hoarding Trillions?

#226

Post by specialist »

jmorrow977 wrote: post #183
jandrese wrote: post #94

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.…

I'm coming around to the opinion that taxes on income are a bad idea. Income flows to people as they're trying to accumulate wealth, trying to climb from lower to middle to upper class. Higher taxes on income, especially highly progressive taxes, make it harder for people to move between social classes. The focus on income tax creates a situation where the person who makes $200k/yr but has a net worth of $0 gets taxe…

opinion that taxes on income are a bad idea

Do you mean earned income, aka labor? vs unearned income, aka capital?

If you are advocating the shift of tax burden from labor back unto capital, reversing policy of the last 35 years (Reaganomics), then I agree with you.

Re: Why Are Corporations Hoarding Trillions?

#227

Post by rchaud »

perlpimp wrote: post #77
ryandrake wrote: post #19

Looks like the TL;DR of this article is: "Corporate leadership, being so much smarter than the rest of us dummies, sees something big on the horizon coming. They're saving all their cash so they can later invest because "the next transformative innovation could be just around the corner". Apparently they're smart enough to hoard all this cash, but not smart enough to know exactly what that transformative innovation i…

If to follow buffet's cues, it would be smart to save when valuations are huge so you can make acquisitions on the cheap side when correction moves through.

In Buffett's day, value investing made a lot of sense and allowed Buffett to put out wise-sounding soundbites like "I don't invest in what I don't understand" and helped shore up the folksy image of Berkshire Hathaway, who owned ostensibly uncomplicated companies like Heinz.

But today we live in a world where the way to make money is through regulatory arbitrage (Uber) or startups chasing risky business models. Additionally, accounting trickery is orders of magnitude more elaborate today, and high frequency trading may have permanently impacted traditional models of volatility.

Of course, this applies only to publicly traded companies. My overall point is that determining value from fundamentals alone is nowhere near as straightforward as it used to be.

Re: Why Are Corporations Hoarding Trillions?

#228

Post by ryanmarsh »

Terr_ wrote: post #217
jmorrow977 wrote: post #183

Earlier quoted context omitted.

I'm coming around to the opinion that taxes on income are a bad idea. Income flows to people as they're trying to accumulate wealth, trying to climb from lower to middle to upper class. Higher taxes on income, especially highly progressive taxes, make it harder for people to move between social classes. The focus on income tax creates a situation where the person who makes $200k/yr but has a net worth of $0 gets taxe…

One big issue is feasibility: It's much easier to track, meter, and tax income as it changes hands than it is to track/meter/tax accumulated wealth.

This is like a litmus test for the right answer. We immediately jump to feasibility. We know it'll work, it'll just be hard.

Re: Why Are Corporations Hoarding Trillions?

#229

Post by ArkyBeagle »

Animats wrote: post #128
partiallypro wrote: post #115

Earlier quoted context omitted.

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 condi…

I think the "you can't tun out of demand" idea is more universal than just Freshwater economics. Even Keynes resorted to "animal spirits" to explain things. Once velocity picked up, you had the Postwar Boom.

The connective tissue is that in order to think that, it helps if you think there's untapped demand constrained by monetary policy.

At the margins, the cost of additional production is so low that there are multiple deflationary pressures even if everything looks normal.

The basic Market Monetarist ( the intellectual sons & daughters of Friedman ) stuff these days is quite interesting. It's very little fun because there's nothing to it to where you can have a "program" - either spending or austerity - to fit the ( lack of ) ideology[1]. So policy makers aren't interested. My favorite Monetarist - Scott Sumner - gets dismissed by such as Paul Krugman, saying that the stories are too hard; that's the politics are wrong[2]. It's not an assault on it even; just a dismissal. Very enlightening.

[1] which is in itself an ideology with certain blinders on - one I ascribe to, unfortunately.

[2] which I think means it has no politics and resembles control theory too much. If everybody can buy the Monetary Policy expansion pack for MATLAB and check the economists' work, there won't be any economists beyond a level....

Re: Why Are Corporations Hoarding Trillions?

#230

Post by kobayashi »

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.…

Just for clarification, and I know you did not mentioned the GOP, but Republicans did not champion the idea of "trickle down economics".

http://rare.us/story/memo-to-liberals-theres-no-such-thing-a...

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