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Why Are Corporations Hoarding Trillions?

nytimes.com

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Re: Why Are Corporations Hoarding Trillions?

#321

Post by jordanthoms »

cobaltblue wrote: post #292
reddytowns wrote: post #263

Earlier quoted context omitted.

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…

There already are tax and welfare benefits to having children, and indeed it does incentivize having them when you really can't afford them. It doesn't seem sustainable long term, but we'll see. I don't think it's a problem with basic income any more than the current system. The bigger issue I find with basic income is that proposals typically don't include any mention of price control on the seller side and purchase…

A landlord may try to increase rent knowing that the tenants now have a basic income, however that creates an opportunity for someone else to provide housing at a cheaper price - it's no different from any other market, as long as you don't have massive supply-side restrictions like in some major cities.

Re: Why Are Corporations Hoarding Trillions?

#322

Post by AngrySkillzz »

dnautics wrote: post #259
evanpw wrote: post #134

Earlier quoted context omitted.

The increase in excess reserves is not mysterious. The Fed starting paying 0.25% on them in 2008 (now 0.50%) while other interest rates were near zero.

Eventually some minor crisis will trigger spending, all this excess cash will hit the system like a floodgate, and we will have an inflation spiral (because suddenly hoarding will be a bad idea). And the irony is that the ethical justification for the fed is that it is supposed to be countercyclical, and thus 'good for society'.

https://www.kreditopferhilfe.net/docs/S_and_P__Repeat_After_...

Re: Why Are Corporations Hoarding Trillions?

#323

Post by dredmorbius »

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…

See also Say's Law. Early 19th c.

Re: Why Are Corporations Hoarding Trillions?

#324

Post by splintercell »

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…

> Where do we get the money from? It doesn't really matter, there's plenty of it sloshing around.That's like saying "Restaurants have food, and there are homeless people in the city, so why can't we distribute the food from the restaurant to hungry homeless people in the city?".

If you were to distribute foods from the restaurant to the hungry people in the city, then these restaurants won't produce that food, because they are not a charity, they are in the business.

Similarly, if you don't figure out where this money would come from, you will soon stop seeing all this money you want to give away.

Re: Why Are Corporations Hoarding Trillions?

#325

Post by dredmorbius »

jordanthoms wrote: post #321
cobaltblue wrote: post #292

Earlier quoted context omitted.

There already are tax and welfare benefits to having children, and indeed it does incentivize having them when you really can't afford them. It doesn't seem sustainable long term, but we'll see. I don't think it's a problem with basic income any more than the current system. The bigger issue I find with basic income is that proposals typically don't include any mention of price control on the seller side and purchase…

A landlord may try to increase rent knowing that the tenants now have a basic income, however that creates an opportunity for someone else to provide housing at a cheaper price - it's no different from any other market, as long as you don't have massive supply-side restrictions like in some major cities.

Housing has significant switching costs. It's not as if you can simply switch to buying a different brand of bread.

You've got to search for an alternate location, consider schools, work, commutes. Neighbors. Etc.

I can see major arguments for managing rent as a social function.

Though that depends heavily on supply and demand factors as well.

Re: Why Are Corporations Hoarding Trillions?

#326

Post by dredmorbius »

asift wrote: post #207
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…

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…

True, though there are studies from elsewhere, which provide also a sampling of methodologies for determining a minimum living wage, dating to the early 19th century.

A living wage means just that: what is required to support a worker, their family, including children, and educate them, to provide the next generation of workers. Adam Smith discusses this at length in Wealth of Nations (Book 1, Chapter 8: https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...)

You'll find other examples in Richard Meier, Science and Economic Development, 1966, dating to California during the Great Depression.

Re: Why Are Corporations Hoarding Trillions?

#327

Post by evbots »

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.…

The money gets distributed somewhat equally? I beg to differ...

I live in DC and if there's one thing government spending does, it increases the number of Lamborghinis on the road. A lot of the new money around here comes directly from government defense spending going to consulting firms which has a strong tendency to make the rich even richer.

Re: Why Are Corporations Hoarding Trillions?

#328

Post by snowwrestler »

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…

No one has mentioned it because, for the U.S. at least, it's not an actual advantage.

U.S. treasuries transact at a global volume of about $1 trillion per day. $100 billion is a lot of money, but not enough to create any significant leverage in negotiations with the U.S. federal government.

U.S. jobs and U.S. customers are far better leverage, because they vote. Cash doesn't vote, and the Federal Reserve can create as much of it as the U.S. needs at any time.

Re: Why Are Corporations Hoarding Trillions?

#329

Post by daurnimator »

aetherson wrote: post #316
jmorrow977 wrote: post #291

Earlier quoted context omitted.

Feasibility is a valid concern. Here's what I think. Stocks are traded on public exchanges. Land and buildings stay in one place. Private jets need to land at airports and they each have a tail number. Most things to be sold efficiently are sold in public marketplaces. There are probably some assets that are hard to track, just like there is currently income that is hard to track. Some people are paid in cash and don…

A huge amount of wealth is tied up in land, which is ultra difficult to assess the value of without actually selling it.

land is already valued for "tax" purposes as council rates.

Re: Why Are Corporations Hoarding Trillions?

#330

Post by daurnimator »

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…

Wow, that's actually a really good idea.

I think I have a new thing to wishfully ramble about at the pub.

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