Rana Foroohar: Makera and Takers

[Winehole23]

One of the most telling statistics that I came across in researching the book was a difference in how much investment a company made in CapEx, R&D, factories, and in worker training when you compared private companies with similar public ones. The private companies made twice the investments into the real economy as public companies did.


To me, that blows out of the water all of these arguments that large corporations and business lobbyists make about taxation and regulation. “Oh, if only the tax rates were so much lower, we would invest,” or, “Oh, if only this or that red tape was different.”


Private companies are out there investing under the same tax and regulatory frameworks. They see plenty of opportunities. But the public markets make it impossible for CEOs to take these long-term decisions. It’s interesting to track the public companies who buck this trend. Like Howard Schultz at Starbucks, who says “I’m going to offer health care for every employee,” or “I’m going to pay for every employee to get a college degree.” He’s only able to do that because he’s got a cult of personality — coupled with being an owner/founder who still has a big stake in the company. Jack Ma from Alibaba has explicitly said his corporate mandate is “to serve our company and our workers first, our customers second, and shareholders third.”

http://evonomics.com/makers-and-takers-adam-smith/

[Winehole23]

It’s a growth issue. I get calls from hedge funds saying, “This is really interesting. You’re making a really compelling case that financialization is actually going to cause long term slower growth.”


That hurts their business models, because ultimately, at the end of the day, everything does eventually come back to what happens on Main Street. In an advanced economy that is 70 percent consumer spending, you cannot have growth when the average American hasn’t gotten a raise in real terms since the early ‘90s.


The blue collar workers that are causing this crazy political cycle right now haven’t gotten them since 1968. No wonder they’re in favor of Donald Trump.

[Winehole23]

financial services a drag on global GDP?

"Global Financial Integrity recently found that developing economies lost $7.8 trillion in cash from 2004 to 2013 because of maneuvers like those allegedly perfected by Mossack. Illicit outflows are increasing at a rate of 6.5% a year, twice the rate of global GDP growth," says Time Magazine journalist Rana Foroohar, adding that this drain might prove a contributing factor to the slowing economies of many developing countries, which could set off a global recession.

http://davidbrin.blogspot.com/2016/0...ma-papers.html

[boutons_deux]

iow, America is getting ing and is un able, because the ers have compromised, totally own govt, the only power capable countervailing the ers.

[RandomGuy]

Hmmm. Looks like a pertinent read, as always.

... and as always.... no actual discussion.

[boutons_deux]

Hmmm. Looks like a pertinent read, as always.

... and as always.... no actual discussion.

well, then discuss.

My point is that what's described above is now irreversible, and will continue to worsen.

Muslim terrorists? chicken feed.

The problem is that the wealth, power, sophistication of multi-national/trans-national BigCorp, capitalism, the super-wealthy, and their ability to move, hide capital while buying govts to leave them alone.