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Why Are Corporations Hoarding Trillions?

nytimes.com

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Re: Why Are Corporations Hoarding Trillions?

#331

Post by [deleted] »

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…

[deleted]

Re: Why Are Corporations Hoarding Trillions?

#332

Post by JamesBarney »

reddytowns wrote: post #263
asift wrote: post #207

Earlier quoted context omitted.

That often cited minimum wage statistic also just so hapens to start at a time when minimum wage was near it's all time high on an inflation adjusted basis. Why do you suppose that is? A basic income is a far better solution than our current mess of bureaucratic welfare programs that are both inefficient and rife with harmful unintended consequences for those they intend to support. Milton Friedman's "negative income…

One thing I don't understand about basic income is how to deal with children. If the parents get the basic income of a child, then that will incentivize some people to have more kids simply to get more money. If you don't give basic income for kids, then people with a lot of kids won't be able to live. Of course, you can adjust the amount between the too extremes of full basic income and no basic income for kids, but…

All I came up was pay for services instead of income for children.

Imagine the minimum income for children was diverted into services. So the government buys free clothes, school breakfasts+lunches, and medical insurance. This decreases the cost for a poor family to raise a child which allows you to give less money per child, and reduces the incentives for child farming.

Re: Why Are Corporations Hoarding Trillions?

#333

Post by snowwrestler »

jandrese wrote: post #70
chatmasta wrote: post #69

I'm surprised nobody has mentioned the geopolitical advantages of hoarding cash. A big pile of untaxed, uninvested cash represents a significant political bargaining chip for the corporation in control of it. Apple can extract more from negotiations with the US government, for example, when it's holding $100b USD offshore. Quite simply, that money is leverage. Over the next several decades we will see the decline of…

Sigh, I was really hoping Cyberpunk stories from the 80s wouldn't turn out to be prophetic.

In reality they have turned out to be the opposite of prophetic. National governments are more powerful today, relative to corporations, than they were in 1992, when Snow Crash was published.

In the 90s, a lot of people thought that businesses would leverage networked computer technologies to disrupt governments. People thought the Internet would be a new medium of exchanging information and wealth, impossible for governments to monitor and regulate.

Does anyone think that anymore? What we see today--thanks to Edward Snowden and others--is that the Internet is thoroughly dominated by national governments. They have the best hackers and invest in the strongest technologies. For example it's hard to think of a smarter tech company than Google, and the GCHQ picked their pocket easily with MUSCULAR. Rather that disrupting the government, core technology companies like AT&T enthusiastically work with the government.

Re: Why Are Corporations Hoarding Trillions?

#334

Post by roymurdock »

jganetsk wrote: post #204
secstate wrote: post #168

Earlier quoted context omitted.

Not claiming I have a panacea here, but wouldn't either a more aggressive minimum wage or a basic minimum income raise the ability for more people to act on the desire to buy? I assure you the demand for tons of stuff exists, but the means to buy it does not. Back in 2013, HuffPost ran an article pointing out that had minimum wage kept up with inflation, it would be $10.50/hr and actually more like $21 if it had kept…

A basic minimum income is the right answer, but not for the purpose of increasing demand. People demanding to increase demand is utterly silly. We have succeeded as a civilization: we are providing far more than we could ask for. In the big picture, what does increasing demand really do for us? But there's definitely a need to reduce poverty. And there's a need to allow ourselves to stop working as hard as we do. A b…

The economics of this inertia is easy to understand, and there are readily available remedies. The world faces a deficiency of aggregate demand, brought on by a combination of growing inequality and a mindless wave of fiscal austerity...The only cure for the world's malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system -- not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs.

Simplified primer by Joseph stiglitz.

http://huffpost.com/us/entry/world-economy-2016_b_8908560.ht...

Re: Why Are Corporations Hoarding Trillions?

#335

Post by dasil003 »

Terr_ wrote: post #315
ryanmarsh wrote: post #228

Earlier quoted context omitted.

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.

> This is like a litmus test for the right answer. We immediately jump to feasibility. Uh, I don't see how that follows. Sometimes "it is not feasible" is first objection simply because it's the easiest to articulate and support. I mean, not everything is equivalent to a proposal to, say, kill all the poor: https://www.youtube.com/watch?v=owI7DOeO_yg

There was something subtly hilarious about seeing a Vanguard investment ad before that clip.

Re: Why Are Corporations Hoarding Trillions?

#336

Post by bsder »

ryanlol wrote: post #280
bsder wrote: post #264

Earlier quoted context omitted.

You only have to injunct one. After a couple million in losses, they'll pay up. At that point, the threat of injunction would simply get the other ones to pay. Or, you start seizing domestic property to pay taxes on the foreign assets. Do NOT assume the government is ever powerless. It is always bigger than you.

The government might not be powerless, but exercising such power would be disastrous. Also, >After a couple million in losses Leads me to believe you don't really understand the numbers we're talking about here. That's missing at least a couple of zeros.

Not at all. Shareholders would begin screaming at the management to pay the taxes almost immediately.

Losses wouldn't even make it to $100 million before management was replaced.

Re: Why Are Corporations Hoarding Trillions?

#337

Post by niels_olson »

reddytowns wrote: post #263
asift wrote: post #207

Earlier quoted context omitted.

That often cited minimum wage statistic also just so hapens to start at a time when minimum wage was near it's all time high on an inflation adjusted basis. Why do you suppose that is? A basic income is a far better solution than our current mess of bureaucratic welfare programs that are both inefficient and rife with harmful unintended consequences for those they intend to support. Milton Friedman's "negative income…

One thing I don't understand about basic income is how to deal with children. If the parents get the basic income of a child, then that will incentivize some people to have more kids simply to get more money. If you don't give basic income for kids, then people with a lot of kids won't be able to live. Of course, you can adjust the amount between the too extremes of full basic income and no basic income for kids, but…

> that will incentivize some people to have more kids simply to get more money.

This sounds like the edge case a non-parent would bring up. People who make poor life choices make them for far less insightful reasons that time-value calculus.

It would take an unbelievable amount of money for me to have another kid. It would be cheaper to buy my retirement.

Re: Why Are Corporations Hoarding Trillions?

#339

Post by nandemo »

BrianEatWorld wrote: post #201
lkrubner wrote: post #175

Earlier quoted context omitted.

You are assuming the answer. (The old phrase for this was "begging the question"). Someone could easily ask "Why don't the landlords, who get all that money from rent, spend it on something, and thus drive growth?" And you can easily answer that: the wealthy spend less of their income, they save more, therefore the high profits from rent increase the savings glut, etc, etc, etc. But you should state the answer direct…

In your example, aren't you implying that landlords and other wealthy individuals aren't simply not spending, but actually hoarding cash? Most wealthy individuals aren't holding cash, they put the money in a savings account or investment that has a return. This money appears to be held to most people, but even money in a savings account makes its way back into the economy by affecting the reserve requirements of bank…

While you're right the wealthy people don't usually hold all most of their cash in their mattresses or checking accounts, that's not the definition of "hoarding cash" in the context of the story posted here.

In corporate finance and equities analysis, the term "cash equivalents" includes very liquid short-term investments like US treasuries, CDs and money-market accounts.

> If they actually are hoarding, the question is why and in the past that is usually because savings returns and investment returns are expected to be negative. In which case, thats the problem to solve.

Er, no. The question is why companies -- which traditionally need to borrow money to operate -- are keeping large amounts of savings (earning positive but still very small returns) instead of increasing their capital expenditures by building factories, or writing more software, etc.

Re: Why Are Corporations Hoarding Trillions?

#340

Post by rchaud »

mc32 wrote: post #233
rchaud wrote: post #219

Earlier quoted context omitted.

>part of the force resulting in net negative low skills worker immigration. That assumes that these workers are coming from countries where opportunities for paid work are equal to or better than those available in the US, and are equally lucrative. Many workers come from communities destroyed by the drug wars, or from economies ruined by corrupt governance. If those structural factors don't see improvement, the impa…

Understood, but if there is no market for their labor due to structural changes in the economy (automated taxis, automated check out, mechanized fruit picking) as well as a better educated domestic workforce (high school grads) now willing t work at $15/hr what jobs exactly would they be coming for?

People in desperate situations aren't going to be stopped from coming to the US because the Fed/WSJ/BLS says there is no market for their labor. Migrant communities are extremely resourceful because they likely have experience in finding opportunities that others would pass on.

For a lot of people, decision making is based on which option allows them to just live another day; relative to their circumstances, we are exceptionally privileged to be able to make decisions based on the extent to which macroeconomic indicators impact our standard of living.

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