Too much money and too few places to invest it • Hacker News Board

Re: Too much money and too few places to invest it

#21

Post by CryptoPunk » Fri, Jun 07, 2019, 1:04 AM UTC

maxxxxx wrote: post #15

CryptoPunk wrote: post #12

Earlier quoted context omitted.

Companies then have to build cars to provide to your workers, instead of building you a factory. We have a limited amount of capital. There's an economic opportunity cost from higher wages and more consumer spending.

What kind of messed up thinking is this? More consumer spending has an opportunity cost? What’s a capitalist supposed to do if nobody can afford their stuff?

This is basic economics. Consumer spending is not the only kind of spending, and directing all economic output to meeting consumer demand would be disastrous for the economy.

>>What’s a capitalist supposed to do if nobody can afford their stuff?

Investing in new capital equipment is how you allow more people to afford your stuff.

More consumers will afford your stuff in the future when you've built your factory and you can churn out more stuff for more people.

Capital investment is why 2.5 billion people can afford smart phones today instead of 50 million people, like 12 years ago.

Re: Too much money and too few places to invest it

#22

Post by internet_user » Fri, Jun 07, 2019, 1:07 AM UTC

and literally every asset class exploded. Isn't this the very definition of inflation...?

Another view would be that money is simply losing value. a million is not what it used to be.

Re: Too much money and too few places to invest it

#23

Post by jakelazaroff » Fri, Jun 07, 2019, 1:07 AM UTC

If people and companies have so much money that they literally don't know what to do with it… is giving it away so ridiculous? There are so many worthy causes in the world. Is there really a point to acquiring more wealth if you're that rich?

Re: Too much money and too few places to invest it

#24

Post by internet_user » Fri, Jun 07, 2019, 1:08 AM UTC

rhizome wrote: post #16

chiefalchemist wrote: post #7

> "How we got here: The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue." Put another way, the Fed made the rich richer, and the lack of significant "trickle down" has created a socio-political Charlie Foxtrot; of which the Fed is not accountable for.

I thought ZIRP was the culprit, with QE being a response to the 2008 crashes that stacked up on it.

and QE is just kicking the can down the road a little further. We are the new Japan.

Re: Too much money and too few places to invest it

#25

Post by theturtletalks » Fri, Jun 07, 2019, 1:08 AM UTC

chiefalchemist wrote: post #7

> "How we got here: The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue." Put another way, the Fed made the rich richer, and the lack of significant "trickle down" has created a socio-political Charlie Foxtrot; of which the Fed is not accountable for.

The Fed is against raising the minimum wage because it will make inflation increase above the allowed 2% per year. Which kind of makes sense because paying workers more will make things more expensive especially service businesses. But, they should still raise the minimum since most service businesses are heading for automation and the bump will help workers have a better job transition.

Re: Too much money and too few places to invest it

#26

Post by komali2 » Fri, Jun 07, 2019, 1:08 AM UTC

dev_dull wrote: post #19

cstrat wrote: post #11

Earlier quoted context omitted.

I can't see how the continued erosion of the middle-class is not going to have huge impacts on the livelihood of everyone else.

Precisely why I’m a big fan of tariffs and America-first foreign policy. We need a way to restore manufacturing industry to the US, the loss of which played a large role in the erosion of the middle class. Protecting manufacturing and factory jobs used to be a selling point for Democrats but things have been a little turned upside down lately.

If only tariffs caused manufacturing facilities to return to the USA.

They don't, though. Here's a great map of the net negative effects tariffs have on the state of your choosing: https://www.uschamber.com/tariffs

Re: Too much money and too few places to invest it

#27

Post by internet_user » Fri, Jun 07, 2019, 1:10 AM UTC

cstrat wrote: post #11

chiefalchemist wrote: post #7

> "How we got here: The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue." Put another way, the Fed made the rich richer, and the lack of significant "trickle down" has created a socio-political Charlie Foxtrot; of which the Fed is not accountable for.

I can't see how the continued erosion of the middle-class is not going to have huge impacts on the livelihood of everyone else.

It already has? We are living it right now.

Re: Too much money and too few places to invest it

#28

Post by komali2 » Fri, Jun 07, 2019, 1:10 AM UTC

chris5745 wrote: post #20

skywhopper wrote: post #8

Earlier quoted context omitted.

This is a reason why increasing the minimum wage or providing health coverage for low-wage workers is a great way to improve everyone's situation. Sure, Walmart has to pay their workers more, but every low-wage worker who works for someone other than Walmart suddenly has a lot more money to spend... at Walmart. On net, companies like Walmart will benefit far more than they lose. But they aren't willing to unilaterall…

I imagine raising the cost of labor in the U.S. would only encourage more outsourcing. Maybe entrenched parties with lots of cash need special incentives to spur investment. I don’t know what those would be, but if all this cash is not being used to invest in public projects or new ventures, we may be witnessing the beginning of a huge socioeconomic shift. Remember war bonds? We need road bonds. Bridge bonds. Somethi…

How do you outsource a Walmart shelf stocker?

Re: Too much money and too few places to invest it

#29

Post by [deleted] » Fri, Jun 07, 2019, 1:10 AM UTC

theturtletalks wrote: post #25

chiefalchemist wrote: post #7

> "How we got here: The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue." Put another way, the Fed made the rich richer, and the lack of significant "trickle down" has created a socio-political Charlie Foxtrot; of which the Fed is not accountable for.

The Fed is against raising the minimum wage because it will make inflation increase above the allowed 2% per year. Which kind of makes sense because paying workers more will make things more expensive especially service businesses. But, they should still raise the minimum since most service businesses are heading for automation and the bump will help workers have a better job transition.

[deleted]

Re: Too much money and too few places to invest it

#30

Post by joshgel » Fri, Jun 07, 2019, 1:11 AM UTC

dev_dull wrote: post #19

cstrat wrote: post #11

Earlier quoted context omitted.

I can't see how the continued erosion of the middle-class is not going to have huge impacts on the livelihood of everyone else.

Precisely why I’m a big fan of tariffs and America-first foreign policy. We need a way to restore manufacturing industry to the US, the loss of which played a large role in the erosion of the middle class. Protecting manufacturing and factory jobs used to be a selling point for Democrats but things have been a little turned upside down lately.

This is just incorrect. A 25% tariff doesn't correct for the difference in labor costs between China and the USA, because the difference in labor costs is > 25%. It just makes stuff more expensive for Americans.