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Why Are Corporations Hoarding Trillions?

nytimes.com

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Re: Why Are Corporations Hoarding Trillions?

#151

Post by dxhdr »

onion2k wrote: post #142
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?

No more than I do now. I want the wage increase to come from lowering the company's profitability. And it is... In 2016 Walmart is spending $1.2bn more on wages, and in 2017 it'll spend $1.5bn more. That's without putting prices up. The 2014 wage hike hit the share price quite hard, but Walmart has the cash to do it and I imagine the shares will bounce back. I hope other businesses follow their lead. http://www.thegu…

They aren't raising prices, however they are firing 16,000 employees:

http://www.zerohedge.com/news/2016-01-15/walmart-fire-16000-...

Re: Why Are Corporations Hoarding Trillions?

#152

Post by jmorrow977 »

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…

Instead of injecting money top-down through the Federal Reserve and large banks, they could inject it bottom-up in selected industries. Invest $1 trillion in biotech. Some will succeed and produce amazing advances. Most will fail, but they'll still drive employment, education, services, etc. targeting that industry, driving down the cost of inputs to the biotech sector for decades.

Of course, this can be done not completely blindly, by investing 10 to 1 with existing investors, or providing a guarantee to return 50% of lost capital, or having milestones companies need to hit, or have experts in the field provide "votes" toward getting higher levels of funding after examining their progress so far.

Re: Why Are Corporations Hoarding Trillions?

#153

Post by jmorrow977 »

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…

And a major reason workers are spent out is because of high rents. If the US would build enough housing in the major employment centers that the highly skilled workers wouldn't spend 90% of their after-tax income on fixed expenses, they'd have more money to spend to drive other businesses.

All the disposable income is being sucked into rents, and eventually that will make the economy run slower and slower, fewer sales to be made, businesses to close, more people to be unemployed, in a feedback loop until all the capital is held on one side of the table and there are a bunch of unemployed people on the other side who are willing to work, able to work, and want to buy things, but have no capital.

Re: Why Are Corporations Hoarding Trillions?

#154

Post by ryanlol »

bsder wrote: post #137
ryanlol wrote: post #118

Earlier quoted context omitted.

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.

But the US can't just block offshore companies from its market without absolutely destroying its economy.

What do you think would happen if the US suddenly decided that no company can do business in the US without paying taxes to the US for their offshore profits?

Re: Why Are Corporations Hoarding Trillions?

#155

Post by ChuckMcM »

Very much reads like the paradox of saving, where saving for a downturn, actually causes the downturn.

It would be an interesting experiment to pay out a chunk of it as a bonus to their employees. Basically dump it into the economy that way.

Re: Why Are Corporations Hoarding Trillions?

#156

Post by jayess »

jameshart wrote: post #37
bobby_9x wrote: post #2

It's the same reason I save my money: for opportunities when prices are low. This is especially relevant now that the stock market is tanking. Most people with any kind of money think this way.

When everybody is thinking that way about capital purchases, you get a deflationary spiral...

Which is only a bad thing when everyone is up to their eyeballs in debt.

Re: Why Are Corporations Hoarding Trillions?

#157

Post by mc32 »

This is the NYT, and, I was hopeful they'd also include information about the state of company hoarding abroad as well as hoarding by foreign companies in their home nations, bjt they dont, so I don't know if this is uniquely American, or maybe its global, regional, etc.

That said I'd like to see a look into an international tax collection agreement among nations,like they have IP rights agreements, human rights agreements, etc. in order to render foreign holdings loopholes useless.

Re: Why Are Corporations Hoarding Trillions?

#158

Post by jayess »

BIackSwan wrote: post #44

I don't get it. The article does not point out even an attempt to ask the leaders of the said corporations - "Why?". Its better to ask to get some semblance of their thinking instead of pure speculation.

It's easier to speculate than do actual journalism. Particularly ideological journalism, a la the New York Times.

Re: Why Are Corporations Hoarding Trillions?

#159

Post by ryanlol »

crdoconnor wrote: post #140
ryanlol wrote: post #118

Earlier quoted context omitted.

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

Nope. Lobbying dollars.

Not really, creating a hostile environment for businesses will obviously drive them away.

Lobbying has nothing to do with preventing a completely unrealistic scenario from happening.

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