Quote:
Originally Posted by Cuepee
Disagree.
Increasingly companies are cash hording...
- Walmart cash on hand for 2021 was $17.741B, a 87.44% increase from 2020.
- Walmart cash on hand for 2020 was $9.465B, a 22.57% increase from 2019.
- Walmart cash on hand for 2019 was $7.722B, a 14.3% increase from 2018.
Cite
Paying out an increasing amount in Dividends
Or increasing Stock BuyBacks
... which means they do not see the benefit or a path of Superior Returns by instead investing in the Means of Production, hiring more people and expanding their operations.
Back in the early Buffet Days a company focusing on any of those 3 was considered a bad warning sign that they did not believe in the future and that growth was achievable. It would hurt the stock value as it would be seen as a short term gain at long term expense (just as gutting R&D used to be considered bad) and since stocks were not actively traded you wanted the long term strategy in place.
But as the market became more short term focused and people became more active traders of their accounts the view switched to more short term gains, because if the long term view of a company was hurt, who cares as I will be on to the next stock.
So the result is, that when you funnel more money to the uber rich or corporations they horde it or have to redeploy it outside the country. It causes contraction in society.
If that wealth is given directly to the Walmart employees instead (they get a tax break instead of the Waltons and Walmart getting a tax break) it immediately goes back in to the economy and spurs actual growth and expansion.
Fwiw , what it means to and throw a big wrench in John theory is ,
Corporations and the top 1% will invest primary in the stock market ( buyback shares for example ) because it has become more profitable than to invest in the real economy .
Those people are not dumb enough to invest in a lesser investments returns with higher risk (recession risk ,etc) !
They are not socialist lol …
Even more so when they know they will get bail out of the stock market crash , it’s been like that for 20 years ….(FED put) .
Why ?
Yeah they got Too much cash at hands and regular people have not enough to increase their spending -> ending increasing profits for corporations from the real economy
The concept of too much money in the hands of a few :
do not means waste capital ,
Do not destroy the economy ( or at the very least , making it subpar of what it could be ) ,
Thinking paper money is as good as the real economy ,
Is absolutely ludicrous …
You got huge wealth gap
Gigantic bubbles ready to explodes
Interest rates at the bottom creating all sorts of economic problems .
Abysmal debts in the governments and private sectors ( 20% zombies companies )
Etc …
But hey the economy runs bad because tax today are still too high ?
Lol …..
It’s very simple , it’s a major shift of profits of the real economy from the workers towards corporations and the top 1% ( the owners of those corps ) in the stock market with around the next top 15% smart enough and rich enough ti get the 85% pie of the stock markets for the past 40 years and incredibly more faster in the last 15-20 years .
But hey , UBI is bad because I will bankrupt the country ……shrug .
Last edited by Montrealcorp; 10-21-2021 at 05:14 PM.