A thread for Democrats Only
POSTED BY: THGRRI
UPDATED: Sunday, September 6, 2026 15:36
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Why isn't pay rising faster?
www.forbes.com/sites/stevedenning/2014/10/29/the-surprising-truth-abou
t-where-new-jobs-come-from/#768d7a0a3382
What do established firms use their money for? We know that the big firms don’t use it for investment as much as one might expect. In a Financial Times article entitled “Corporate investment: A mysterious divergence” Robin Harding helped resolve a conundrum that had puzzled the world’s top economists: why is net investment at a measly 4 percent of output when pre-tax corporate profits are now at record highs – more than 12 percent of GDP?
In standard economic theory, this makes no sense. When profits go up, companies should be seizing investment opportunities to lay the groundwork for even more profits in future. In turn, that investment should create jobs and lead to higher wages. That’s how capitalism is meant to work.
As it happens, we have the kind of thing that you rarely see in economics—a study that enables us to pinpoint the problem by offering “with” and “without” data.
It’s brilliant work by economists from the Stern School of Business and Harvard Business School, Alexander Ljungqvist, Joan Farre-Mensa, and John Asker, in an article entitled “Corporate Investment and Stock Market Listing: A Puzzle?” which compares the investment patterns of public companies and privately held firms. It turns out that the lag in investment is a phenomenon of the public companies more than the privately held firms.
“They find that, keeping company size and industry constant, private US companies invest nearly twice as much as those listed on the stock market: 6.8 per cent of total assets versus just 3.7 per cent.” Large publicly-owned firms are simply not investing enough to grow the economy.
Guess where all that money goes?
So if the money doesn’t go into job creation or investment, where does it all go? One part of the answer is that the firms are just sitting on the money, not seeing opportunities for investment. Another part of the answer is given by William Lazonick in HBR and the New York Times: an astonishing amount goes to share buybacks.
“From 2004 to 2013, 454 companies in the S&P 500 Index expended 51 percent of their profits, or $3.4 trillion, on repurchases, on top of 35 percent of profits on dividends… More than three-quarters of compensation for the 500 highest-paid executives came from stock options and stock awards.”
“So who gains from open-market repurchases? Their sole purpose is to give a company’s stock price a manipulative boost, and prime beneficiaries are the corporate executives who decide to do them... For corporate executives, stock-based pay is a ticket to membership in the 0.1 percent top-income club. So why do we let executives manipulate the stock market?"
As The Economist has written, the Blue Chips' use of share buybacks is the equivalent of becoming addicted to snorting "corporate cocaine."
“We are reaping the bitter fruits of the ‘shareholder value’ revolution," as Matthew Yglesias at Slate writes. "Executives at publicly traded companies are paid to generate higher share prices, which is done by hitting quarterly earnings targets. This leads to underinvestment relative to the behavior of managers of privately held firms.”
As Harding concludes, it is “time to stop thinking about corporate governance and executive pay as matters of equity and to regard them instead as a macroeconomic problem of the first rank.”
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US trade gap with China swells to record US$375 Billion
Business | 7 Feb 2018 11:48 am
www.thestandard.com.hk/breaking-news.php?id=102660&sid=2
US President Donald Trump campaigned on a promise to overturn trade policy and bring down the country’s massive, persistent trade deficits.
After a year in the White House, he still has a lot of work to do.
The Commerce Department reported Tuesday that the U.S. trade deficit in goods and services grew by 12 percent to US$566 billion last year, biggest since 2008. A record US$2.9 trillion in imports swamped US$2.3 trillion in exports last year.
The deficit in the goods trade with China — frequently accused of unfair trading practices by the White House — hit a record US$375.2 billion in 2017. The goods gap with Mexico climbed to US$71.1 billion.
"Trump’s trade team has not been able to stem the flood of imports into the country yet,” said Chris Rupkey, chief financial economist at MUFG Union Bank.
The trade gap grew even though the U.S. dollar dropped nearly 7 percent last year against the currencies of its major trading partners, a move that gives U.S. companies a price edge in foreign markets and makes imports pricier in America.
Dean Baker, senior economist at the left-leaning Center for Economic and Policy Research, says it takes time for a weaker dollar to have an impact on the trade balance.
Commerce Secretary Wilbur Ross said the trade deficit "ultimately will be reduced” by a combination of new or renegotiated trade pacts and a crackdown on abusive foreign trade practices. He cited the administration’s decision last month to impose tariffs on cheap Chinese solar panels and South Korean washing machines. But Ross said "it is not practical to set an exact deadline” for narrowing the trade gap.
Countries run trade deficits when they buy more products from other countries than they sell and run surpluses when they export more than they import. The United States has not turned a trade surplus since 1975, when Gerald Ford sat in the White House and "Jaws” ruled the box office.
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Don’t kid yourself. The future is bleak.
by Matt O'Brien
www.washingtonpost.com/news/wonk/wp/2018/02/06/dont-kid-yourself-the-f
uture-is-bleak/?utm_term=.25a16da0b697
Democracy is really a prisoner's dilemma, and we're losing at ours.
That, at least, is the message of the depressingly timely new book “How Democracies Die” by Harvard University professors Steven Levitsky and Daniel Ziblatt. It turns out, you see, that whether government of the people, by the people and for the people will in fact perish doesn't just depend on how good a job we did at setting up our political system. If it did, all the Latin American ones that copied our Constitution wouldn't have seen theirs fall apart. No, the survival of our democracy is also a matter of how good a job we do at fighting fair even when we don't have to.
In other words, whether we follow both the written and unwritten rules of politics.
The problem, of course, is that we haven't done that for a while now, and it doesn't look as though that's about to change. That's made our democracy devolve into trench warfare even in the best of times, and maybe a democracy in name only if the worst were ever to come to pass. That might sound alarmist, but just because you're paranoid doesn't mean President Trump isn't trying to undermine the rule of law.
Most of what we're talking about, though, doesn't have anything to do with the White House's current occupant. It's more the fact that everything gets filibustered nowadays. Or that opposition parties semi-regularly shut down the government to try to get their way. Or even say that they'll force the government to default on the debt if their demands aren't met. This is not normal. Or at least it didn't used to be. While there aren't any formal rules against these things, they're the type of hardball tactics that parties rarely, if ever, used before. That's because they knew the other side would respond in kind until our consensus-driven institutions, in particular, the Senate, stopped working altogether.
What changed? Well, the Republican Party did. They're the ones who shut the government down in the 1990s, the ones who threatened to breach the debt ceiling in 2011, the ones who shut the government down again in 2013 and the ones who blocked a sitting president from filling an empty Supreme Court seat simply because they could. A big part of this is that the party was taken over by the conservative movement, which is more hostile to compromise than everybody else. The rest, though, is that it stayed white and Christian at the same time that the Democratic Party and the country at large were becoming much more diverse and secular. They didn't just see their opponents as people with different ideas, but as different people, period.
The result has been what political scientists Thomas Mann and Norm Ornstein call “asymmetric polarization”: Republicans have moved much further to the right than Democrats have to the left. Not only that, but they've been much more willing to use extreme measures to get what they want. They think that everything is their final chance to stop the country from changing forever — “the 2012 election may be the last opportunity for Republicans,” wrote former South Carolina senator and Heritage Foundation president Jim DeMint, because “Republican supporters will continue to decrease every year as Americans become more dependent on the government" — and that their opponents aren't “real Americans” like they are. Who cares, then, if what they're doing isn't considered proper? There are bigger issues at stake.
But in politics, as in physics, every action has a (mostly) equal and opposite reaction. Sure, Democrats haven't held the full faith and credit of the United States hostage as Republicans have, but they did just shut down the government and have embraced the filibuster with equal vigor. What else are they supposed to do? Both parties would be better off cooperating
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Today’s budget deal is the proof: Republicans never cared about the deficit
Republicans used to profess to be extremely worried about the budget deficit. Many of us suspected at the time that they were full of it. And one big thing we’ve learned this week is that they were, indeed, full of it.
Back in 2012, Senate Majority Leader Mitch McConnell called the budget deficit “the nation’s most serious long-term problem.” That same year, House Speaker Paul Ryan called it a “serious threat” to the economy. They were full of it.
Today’s budget deal — a big, multi-billion dollar increase in military spending “offset” by a nearly-as-large increase in non-military spending — gives up the game entirely. They don’t care, on any level, about the size of the federal budget deficit.
www.bbc.com/news/world-us-canada-42981072
With Bushonomics completely discredited by 2009, the GOP was clearly in need of a brand refresh.
What they came up with was the “Tea Party” and the insistence that the big lesson of the Bush years was that Republicans had moved away from conservative economic orthodoxy. That — at least in theory — is why Republicans opposed Obama’s stimulus bill in 2009. Then Trump won and the Tea Party rebrand became obsolete in 2016.
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Quote:So Obama Averaged $1.25 Trillion Deficit per year.
Originally posted by second:
Today’s budget deal is the proof: Republicans never cared about the deficit
Republicans used to profess to be extremely worried about the budget deficit. Many of us suspected at the time that they were full of it. And one big thing we’ve learned this week is that they were, indeed, full of it.
Back in 2012, Senate Majority Leader Mitch McConnell called the budget deficit “the nation’s most serious long-term problem.” That same year, House Speaker Paul Ryan called it a “serious threat” to the economy. They were full of it.
Today’s budget deal — a big, multi-billion dollar increase in military spending “offset” by a nearly-as-large increase in non-military spending — gives up the game entirely. They don’t care, on any level, about the size of the federal budget deficit.
www.bbc.com/news/world-us-canada-42981072
With Bushonomics completely discredited by 2009, the GOP was clearly in need of a brand refresh.
What they came up with was the “Tea Party” and the insistence that the big lesson of the Bush years was that Republicans had moved away from conservative economic orthodoxy. That — at least in theory — is why Republicans opposed Obama’s stimulus bill in 2009. Then Trump won and the Tea Party rebrand became obsolete in 2016.
The Trump Tax Reform reportedly over a 10 year span reduces Revenue by $150 Billion per year.
The link you gave indicates almost $300 Billion more outlays over 2 years, or $150 Billion per year.
So Trump's first FY adds $300 Billion for the year, compared to Obama's record of $1,250 Billion per year. Not horrific progress made by Trump in his first attempt.
Obama's FY2017 claimed a $503 Billion Deficit with $3,644 Billion Revenues and $4,147 Billion Outlays.
Obama saddled FY2018 with claimed $454 Billion deficit, $3,899 Revenues, and $4,352 Billion Outlays using static projections.
If Trumponomics generates a 4% increase in Revenue the "Tax Reform Revenue Reduction" will be eliminated, wiped out, erased. If an 8% increase is realized, this new spending increase will also be balanced, wiped out. Much better hope for that than Obamanomics ever pretended.
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Democrats' strategic strike against gerrymandering
www.csmonitor.com/USA/Politics/monitor_breakfast/2018/0207/In-Democrat
s-strategic-strike-against-gerrymandering-Holder-leads-the-charge
Political gerrymandering 'a fundamental affront to our system of democracy.'
Two cases before Supreme Court
Partisan gerrymandering lies at the heart of two cases before the US Supreme Court – one brought by Democrats in Wisconsin, the other by Republicans in Maryland. The cases show that partisan gerrymandering is an equal-opportunity practice. How the justices rule could reshape the conduct of US elections.
A lawsuit over North Carolina’s congressional map is working its way through the courts. And last month, the Supreme Court agreed to hear a Texas case on racial gerrymandering.
Another challenge for Democrats is that their voters are clustered in cities and towns and on the coasts, which hurts their chances of winning power, Mr. Wasserman notes. The trend toward partisan “sorting” – people choosing to live near like-minded people – means there’s only so much Democrats can do in redrawing district lines.
“The truth is, gerrymandering compounds sorting,” says Wasserman. “When we’ve had a balkanization or a polarization of voters on the map to the degree we’ve seen in the last 20 years, it becomes easier for partisans drawing the maps to create safely Democratic or safely Republican seats.”
Safe seats often lead to the election of members who don’t feel the need to work across the aisle, contributing to polarization. Elections in such districts are often decided in the primaries, which are dominated by the most hard-line partisan voters.
So the creation of more competitive congressional districts could ease polarization, at least somewhat.
Citizen-led efforts to reform redistricting are under way in seven states, according to the Brennan Center for Justice at New York University. Some involve ballot initiatives, others are trying to pass legislation. But taking redistricting out of the hands of partisans is difficult.
Only four states – Arizona, California, Idaho, and Washington – use an independent commission to draw congressional districts. In 37 states, the state legislature draws the boundaries, and in most, the governor must approve the map. Two states, Hawaii and New Jersey, use politician commissions. Seven states have just one member of the House, and thus there’s no congressional redistricting and gerrymandering is impossible.
“I actually think that a movement toward nonpartisan commissions is in some ways the purest way to do this [redistricting],” says Holder. “But I deal with reality, and between now and 2021, we're not going to get commissions in all of these states.”
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What Happened to All the Jobs Trump Promised?
President Trump has made many claims promising that individual companies such as Amazon, Alibaba and Boeing will hire large – and specific – numbers of American workers, a total of 2.4 million in all. Only about 206,000 of those jobs have been created so far. Roughly 136,000 of those were genuinely new positions, as opposed to slots that were planned before the presidential election. Some 63,000 of them are potentially attributable to Trump, according to the companies that did the hiring.
Just before Trump took office, Alibaba chief Jack Ma stood with the president-elect and promised 1 million U.S. jobs. But there’s no sign any Americans were actually hired. The Chinese e-commerce giant wasn’t planning to build facilities or hire coders in the U.S; it’s trying to recruit American merchants to use its platform with the expectation that those companies would then hire more people. Alibaba wouldn’t comment on its progress.
Trump claimed his trip to Saudi Arabia in May would create “millions” of American jobs. But no jobs were actually created. Lockheed Martin told ProPublica that 18,000 may eventually materialize if preliminary agreements proceed. Other companies that signed deals on the trip, such as Boeing and GE, couldn’t provide even estimates of potential hires.
In October, Trump hosted a signing ceremony for a big order of Boeing jets and said it would create 70,000 jobs. But the company isn’t planning such a hiring spree. A Boeing spokeswoman said the number is just an estimate – using a generic formula and the sticker price of the planes – of indirect jobs that may be supported or sustained.
In all, Trump has made 31 specific claims about companies adding or saving American jobs thanks to his intervention. We went back to see what’s become of those announcements.
https://projects.propublica.org/graphics/trump-job-promises
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Quote:I forgot to point out that Obama's pretend Revenue growth was $255 Billion in one year, despite his record of extended Recession and stagnant economic growth.
Originally posted by JEWELSTAITEFAN:Quote:So Obama Averaged $1.25 Trillion Deficit per year.
Originally posted by second:
Today’s budget deal is the proof: Republicans never cared about the deficit
Republicans used to profess to be extremely worried about the budget deficit. Many of us suspected at the time that they were full of it. And one big thing we’ve learned this week is that they were, indeed, full of it.
Back in 2012, Senate Majority Leader Mitch McConnell called the budget deficit “the nation’s most serious long-term problem.” That same year, House Speaker Paul Ryan called it a “serious threat” to the economy. They were full of it.
Today’s budget deal — a big, multi-billion dollar increase in military spending “offset” by a nearly-as-large increase in non-military spending — gives up the game entirely. They don’t care, on any level, about the size of the federal budget deficit.
www.bbc.com/news/world-us-canada-42981072
With Bushonomics completely discredited by 2009, the GOP was clearly in need of a brand refresh.
What they came up with was the “Tea Party” and the insistence that the big lesson of the Bush years was that Republicans had moved away from conservative economic orthodoxy. That — at least in theory — is why Republicans opposed Obama’s stimulus bill in 2009. Then Trump won and the Tea Party rebrand became obsolete in 2016.
The Trump Tax Reform reportedly over a 10 year span reduces Revenue by $150 Billion per year.
The link you gave indicates almost $300 Billion more outlays over 2 years, or $150 Billion per year.
So Trump's first FY adds $300 Billion for the year, compared to Obama's record of $1,250 Billion per year. Not horrific progress made by Trump in his first attempt.
Obama's FY2017 claimed a $503 Billion Deficit with $3,644 Billion Revenues and $4,147 Billion Outlays.
Obama saddled FY2018 with claimed $454 Billion deficit, $3,899 Revenues, and $4,352 Billion Outlays using static projections.
If Trumponomics generates a 4% increase in Revenue the "Tax Reform Revenue Reduction" will be eliminated, wiped out, erased. If an 8% increase is realized, this new spending increase will also be balanced, wiped out. Much better hope for that than Obamanomics ever pretended.
A minor amount of actual, Real growth would, by comparison, generate real Revenue growth, erasing projected deficits.
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Quote:I forgot to point out that no President has ever set the deficit; Congress does and always has.
Originally posted by JEWELSTAITEFAN:
I forgot to point out that Obama's pretend Revenue growth was $255 Billion in one year, despite his record of extended Recession and stagnant economic growth.
A minor amount of actual, Real growth would, by comparison, generate real Revenue growth, erasing projected deficits.
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Quote:Then Trump is going in the wrong direction. He is doing worse than Obama.
Originally posted by JEWELSTAITEFAN:
I forgot to point out that Obama's pretend Revenue growth was $255 Billion in one year, despite his record of extended Recession and stagnant economic growth.
A minor amount of actual, Real growth would, by comparison, generate real Revenue growth, erasing projected deficits.
Last May, the Trump administration released a budget projecting the United States would swing from a deficit of $440 billion in 2018 to a surplus of $16 billion in 2027. The budget called for deep cuts to domestic programs and a robust increase in military spending.
Instead, the opposite has happened.
The nonpartisan Committee for a Responsible Federal Budget projects that the United States will run $2 trillion annual budget deficits by 2027 and have a debt-to-gross domestic product ratio of 105 percent — a level not seen since the end of World War II.
“With this deal, we will experience trillion-dollar deficits permanently,” said Andy Roth, vice president of the conservative Club for Growth. “That sort of behavior, the last time I checked, is not in the Republican platform.”
The seeds of this ballooning debt load are already taking root — the Treasury Department said last month that it expects to borrow $955 billion this fiscal year (not the $440 billion previously projected) and more than $1 trillion in both 2019 and 2020. That money appears set to get only more expensive to borrow, as the Federal Reserve looks to continue raising interest rates and investors demand higher returns from an increasingly debt-laden government.
Indeed, the borrowing spree is contributing to recent volatility in financial markets, as investors fret that the additional fiscal stimulus, paired with a strengthening economy, could fuel inflation and translate into higher interest rates more quickly than anticipated.
www.msn.com/en-us/news/politics/republicans-learn-to-love-deficit-spen
ding-they-once-loathed/ar-BBITo1p
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