4 ms·

A corporation holding cash means they're not investing as much as they could according to supply-side economic thinking. This should make people reflect on the

A corporation holding cash means they're not investing as much as they could according to supply-side economic thinking. This should make people reflect on the state of the economy. While it's true that some companies just like to hoard cash (e.g. Microsoft), this may just be the symptom of a bigger problem. With consumers low on cash due to the recession, it simply makes no sense to invest any more. This in turn guarantees that consumers will stay low on cash because a lot of slack remains in the job market.

funthree 15y ago
Apple forbid they'd bring those manufacturing jobs to the US and actually pay some Californians a decent wage and help their own country. http://harryjerry.com/tech/how-apple-products-are-made-in-foxconn/ http://harryjerry.com/tech/how-apple-products-are-made-in-fo... http://www.google.com/publicdata/explore?ds=usunemployment&ctype=l&strail=false&nselm=h&met_y=unemployment_rate&scale_y=lin&ind_y=false&rdim=state&idim=state:ST060000&ifdim=state&tdim=true&tstart=633592800000&tend=1309323600000&icfg&uniSize=0.035&iconSize=0.5 http://www.google.com/publicdata/explore?ds=usunemployment&#...
- jodrellblank 15y ago
  Aren't companies legally required to act in the vest interests of shareholders? Overpaying for production out of patriotic racism doesn't seem to fit that mould.
  - wisty 15y ago
    No. Some free-market fundamentalists say that companies should have an ethical obligation to maximize profit for their shareholders. I think the law says that companies are required to follow their constitution. Generally, the board of directors interprets that constitution, and then tells the CEO what to do. Shareholders may be able to vote to change the constitution, but this would be covered by the company's constitution. I think non-profits can be companies. That would be a very clear example of companies that are not legally required to act in the interests of shareholders.
nkassis 15y ago
Here's why I believe the economy in the shitters : http://en.wikipedia.org/wiki/Velocity_of_money http://en.wikipedia.org/wiki/Velocity_of_money Money needs to move and it's not right now.
- nhaehnle 15y ago
  I agree. The question is: how do you fix it? In the case of the big corporations, for example, I see no direct, freedom-compatible way of getting them to spend that money. The only way I see that might work (though here Apple might still be a special case) is to create an environment where businesses see an increase in demand as an incentive for increased investment. Then the question becomes where that demand should come from, and the most feasible short-term answer (the government) is almost universally ideologically opposed (yes, even Democrats these days seem to shy away from direct spending to stimulate the economy).
  - funthree 15y ago
    I could think of a number of ideas that would be severely unpopular. One idea: Start taxing people based on their net worth. It'd be for the greater good after all, right?
tomjen3 15y ago
Consumers can't spend money unless they are also producing (where else would they get their money?). People generally like to consume, so the question is not how do we get them to consume more -- they want to do that already -- but how do we make it possible for them to produce more. And while credit can be used to start producing (like you use a battery to start a car), it is not, and should not be, used in perpetuity to fund operations -- doing so isn't sustainable. At the same time we wilify the rich, and those who are the most productive (see examples of how people treat Steve elsewhere in this thread). While there are certainly criminals among the rich (maybe even more than among the general population) this doesn't mean that we should blame all of them (you don't blame all African-Americans, even though they also have a higher crime rate). As for paying their fair share -- they already do, they pay more tax than most people do and get a lot less from it (how much does Steve get in food stamps?).

funthree 15y ago

Apple forbid they'd bring those manufacturing jobs to the US and actually pay some Californians a decent wage and help their own country. http://harryjerry.com/tech/how-apple-products-are-made-in-foxconn/ http://harryjerry.com/tech/how-apple-products-are-made-in-fo... http://www.google.com/publicdata/explore?ds=usunemployment&ctype=l&strail=false&nselm=h&met_y=unemployment_rate&scale_y=lin&ind_y=false&rdim=state&idim=state:ST060000&ifdim=state&tdim=true&tstart=633592800000&tend=1309323600000&icfg&uniSize=0.035&iconSize=0.5 http://www.google.com/publicdata/explore?ds=usunemployment&#...

jodrellblank 15y ago
Aren't companies legally required to act in the vest interests of shareholders? Overpaying for production out of patriotic racism doesn't seem to fit that mould.
- wisty 15y ago
  No. Some free-market fundamentalists say that companies should have an ethical obligation to maximize profit for their shareholders. I think the law says that companies are required to follow their constitution. Generally, the board of directors interprets that constitution, and then tells the CEO what to do. Shareholders may be able to vote to change the constitution, but this would be covered by the company's constitution. I think non-profits can be companies. That would be a very clear example of companies that are not legally required to act in the interests of shareholders.

nkassis 15y ago

Here's why I believe the economy in the shitters : http://en.wikipedia.org/wiki/Velocity_of_money http://en.wikipedia.org/wiki/Velocity_of_money Money needs to move and it's not right now.

nhaehnle 15y ago
I agree. The question is: how do you fix it? In the case of the big corporations, for example, I see no direct, freedom-compatible way of getting them to spend that money. The only way I see that might work (though here Apple might still be a special case) is to create an environment where businesses see an increase in demand as an incentive for increased investment. Then the question becomes where that demand should come from, and the most feasible short-term answer (the government) is almost universally ideologically opposed (yes, even Democrats these days seem to shy away from direct spending to stimulate the economy).
- funthree 15y ago
  I could think of a number of ideas that would be severely unpopular. One idea: Start taxing people based on their net worth. It'd be for the greater good after all, right?

tomjen3 15y ago

Consumers can't spend money unless they are also producing (where else would they get their money?). People generally like to consume, so the question is not how do we get them to consume more -- they want to do that already -- but how do we make it possible for them to produce more. And while credit can be used to start producing (like you use a battery to start a car), it is not, and should not be, used in perpetuity to fund operations -- doing so isn't sustainable. At the same time we wilify the rich, and those who are the most productive (see examples of how people treat Steve elsewhere in this thread). While there are certainly criminals among the rich (maybe even more than among the general population) this doesn't mean that we should blame all of them (you don't blame all African-Americans, even though they also have a higher crime rate). As for paying their fair share -- they already do, they pay more tax than most people do and get a lot less from it (how much does Steve get in food stamps?).