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

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

#31

Post by CryptoPunk » Fri, Jun 07, 2019, 1:12 AM UTC

jakelazaroff wrote: post #18

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.

> Companies then have to build cars to provide to your workers, So having more customers is… bad? > instead of building you a factory. Where do you think cars get built? > We have a limited amount of capital. Not really. The entire point of the article is that the available capital exceeds the available investment opportunities.

>>So having more customers is… bad?

If it's coming at the expense of higher prices for building out new capital, yes.

The market will naturally calibrate the amount of consumer spending for it to be optimal for long-term economic growth. If we artificially boost consumer spending at the expense of capital investment, we will hurt long-term economic growth.

>>Where do you think cars get built?

Resources that go to building cars at a factory are not going to building a new factory.

>>Not really. The entire point of the article is that the available capital exceeds the available investment opportunities.

The hypothesis is based on the fact that corporations are sitting on a lot of cash, which totally neglects to account for the huge growth in debt, and how cash reserves are important for absorbing economic shocks that can occur in over-leveraged financial systems.

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

#32

Post by internet_user » Fri, Jun 07, 2019, 1:12 AM UTC

astazangasta wrote: post #2

Ironically the best thing they can do to create new investment opportunities is pay their workers more, but they never will because they are too short sighted.

I feel sympathetic to this argument, but running of money just short of take off/finding market fit/etc would lower workers pay to zero.

The real issue is that we live in such uncertain times it's very difficult to plan ahead, both employees and employers have become quite risk-averse.

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

#33

Post by guelo » Fri, Jun 07, 2019, 1:12 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 article also mentions globalization and Trump's tax cuts.

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

#34

Post by AnthonyMouse » Fri, Jun 07, 2019, 1:14 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.

Wouldn't it just make the automation viable more quickly?

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

#35

Post by conanbatt » Fri, Jun 07, 2019, 1:16 AM UTC

jakelazaroff wrote: post #23

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?

Giving it away for them would be to pay out dividends. I'm guessing its too tax disadvantaged to do that.

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

#36

Post by Spooky23 » Fri, Jun 07, 2019, 1:17 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.

There was a thread earlier today where people on a site catering to tech people were commenting on how they cannot afford to have children.

When people are rejecting reproduction and family to play video games and go on vacation, that’s an impact.

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

#37

Post by jayd16 » Fri, Jun 07, 2019, 1:18 AM UTC

fastball wrote: post #3

astazangasta wrote: post #2

Ironically the best thing they can do to create new investment opportunities is pay their workers more, but they never will because they are too short sighted.

If you pay your workers more you have less money for investment opportunities...

Paying your workers is the whole trickle down part of this ridiculous system. If you skip that part, why should we tolerate an investment class?

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

#38

Post by dev_dull » Fri, Jun 07, 2019, 1:19 AM UTC

komali2 wrote: post #26

dev_dull wrote: post #19

Earlier quoted context omitted.

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

I realize that tariffs are controversial given the current political climate, but they really are one of the best ways to claw back money from large corporations and reward unskilled labor in the US. We need to bring manufacturing jobs back to the US.

The loss of those jobs disproportionately affected minorities. Increases in corporate tax is easily avoided by domicile changes. Tariffs are a simple way to restore balance. Build it here. Hire here. No tariffs.

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

#39

Post by theturtletalks » Fri, Jun 07, 2019, 1:20 AM UTC

AnthonyMouse wrote: post #34

theturtletalks wrote: post #25

Earlier quoted context omitted.

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.

Wouldn't it just make the automation viable more quickly?

I feel like companies are already racing for it. Just look at how fast outsourcing has taken place across SMBs and public companies.

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

#40

Post by toast0 » Fri, Jun 07, 2019, 1:21 AM UTC

komali2 wrote: post #28

chris5745 wrote: post #20

Earlier quoted context omitted.

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?

Labor saving devices / robots. If not to do the whole job (because robot shelf stocking is too much right now), then to reduce the amount of people time needed. Better ways to get the goods close to where they need to go and let the workers move it onto the actual shelf.

Or outsource to the shoppers: just drop the palette of stuff where it should be and let the customers find what they want.