@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus Hope you have gone through this part of the article as well - Here’s an example. As many economists have lately been pointing out, these days the old story about rising inequality, in which it was driven by a growing premium on skill, has lost whatever relevance it may have had.
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus Since around 2000, the big story has, instead, been one of a sharp shift in the distribution of income away from wages in general, and toward profits. But here’s the puzzle: Since profits are high while borrowing costs are low, why aren’t we seeing a boom in business investment?
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus And, no, investment isn’t depressed because President Obama has hurt the feelings of business leaders or because they’re terrified by the prospect of universal health insurance.
Well, there’s no puzzle here if rising profits reflect rents, not returns on investment.
Well, there’s no puzzle here if rising profits reflect rents, not returns on investment.
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus A monopolist can, after all, be highly profitable yet see no good reason to expand its productive capacity. And Apple again provides a case in point: It is hugely profitable, yet it’s sitting on a giant pile of cash, which it evidently sees no need to reinvest in its business.
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus Or to put it differently, rising monopoly rents can and arguably have had the effect of simultaneously depressing both wages and the perceived return on investment.
You might suspect that this can’t be good for the broader economy, and you’d be right. If household income and
You might suspect that this can’t be good for the broader economy, and you’d be right. If household income and
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus hence household spending is held down because labor gets an ever-smaller share of national income, while corporations, despite soaring profits, have little incentive to invest, you have a recipe for persistently depressed demand. I don’t think this is the only reason our
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus recovery has been so weak — weak recoveries are normal after financial crises — but it’s probably a contributory factor.
Just to be clear, nothing I’ve said here makes the lessons of history irrelevant. In particular, the widening disconnect between profits and production does
Just to be clear, nothing I’ve said here makes the lessons of history irrelevant. In particular, the widening disconnect between profits and production does
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus nothing to weaken the case for expansionary monetary and fiscal policy as long as the economy stays depressed. But the economy is changing, and in future columns I’ll try to say something about what that means for policy.
@arthur_eckart @jlounsbury59 @AuburnParks @stf18 @mcgilcoli @FadhelKaboub @GaneshHegde7 @tonywestonuk @sashi31363 @StephanieKelton @tymoignee @pdacosta @GaelicTorus Bridgewater's Ray Dalio: U.S. economy must be fixed cnb.cx/2YtMTsY #inequality
