The markets 1-15-2020

[oeb11]

What lizzie says - is always subject to change without notice.
Ie - no increased taxes for the middle class for Medicare for All.

If it were not for lies - she would be silent totally.

Trust her to sell you a Bridge in Brooklyn ????

[kehaar]

Originally Posted by SpeedRacerXXX

First, I challenge you to cite a single non-biased article that states Biden, Warren, or Sanders propose open borders. Do I agree with Warren and Sanders on all their proposals? No.

I had a political discussion with my fascist friends(university professors) who claimed that they weren't for open borders. I succinctly pointed out that if you position is that "an illegal alien can't be sent home, unless they are convicted of certain crimes", then you are for open borders.

They tried 15 ways to Sunday to counter that observation. They failed. Moreover, I pointed out that that policy is inherently disgusting, as it creates an enslaved underclass, subject to extortion. They replied that illegal immigration was "necessary for us to be rich"(that is an actual quote)". I piped up and said that was a historically utilized argument. The wife of the supreme fascist that said that quickly piped up and said he didn't mean that we need slaves.

Then the conversation went silent.

Fascist are what fascist do.

[Tiny]

Originally Posted by SpeedRacerXXX

Corporations for the most part took their new-found money and bought back stock rather than re-investing it. I too think we should cut spending, and I agree that the defense budget is a good place to start. If the Pentagon can shift billions of dollars in 2019 and 2020 from funded projects to fund Trump's wall, I question whether they needed the money in the first place. And you are 100% correct in that the party in power rarely cares about running up the deficit and the party out of power complains about it.

As I said, wage growth is a tricky subject to nail down:

It is true that inflation-adjusted wages (average weekly for production and nonsupervisory workers) peaked in February 1973 at $345.95, and then fluctuated but generally declined, hitting a low point of $263.73 in January 1996. They have again fluctuated since, but they’ve been on a general upward trend.

They have increased 2.4% since Trump took office, from an average $308.21 per week to $315.74 per week in May, the most recent figures available from the Bureau of Labor Statistics. Technical note: All wage figures cited in this story from BLS are calculated in 1982-84 dollars – not current 2019 dollars.

During Obama’s last four years in office the average weekly earnings for production and nonsupervisory workers went up 4.9%. Over Obama’s entire two-term tenure, wages were up 4.2%.

https://tradingeconomics.com/united-states/wage-growth

Wage growth is okay but I don't think it hit the levels forecast with the tax reform package.

I too admire Lustylad's knowledge of economics.

We agree on more than we disagree. I'd have two bones to pick. First, I don't believe corporations spent most of their tax savings on buybacks. And if they did, I'm not sure how much it would matter. When companies buy the stock back from mutual funds, pension funds, individuals or whoever, the sellers for the most part will reinvest the money back into the private sector. And with respect to wage growth, please click on the 10 year chart in your link. Looking at that and taking into account inflation, it looks to me like real wage growth has been higher under Trump. The 2.4% figure would be a "real", inflation adjusted number, since it's calculated using 1982-1984 dollars. The 4.2% or 4.9% under Obama would be before adjusting for inflation -- I can guarantee that. If real wage growth had been that high under Obama and if he were the one responsible I'd be praising him from the mountaintop.

It's possible both of us may have made a mistake in how we're looking at the data. I'm not sure whether what we're looking at is total wages or wages per person. We want to look at wages per person, adjusted for inflation.

[SpeedRacerXXX]

Originally Posted by Tiny

We agree on more than we disagree. I'd have two bones to pick. First, I don't believe corporations spent most of their tax savings on buybacks. And if they did, I'm not sure how much it would matter. When companies buy the stock back from mutual funds, pension funds, individuals or whoever, the sellers for the most part will reinvest the money back into the private sector. And with respect to wage growth, please click on the 10 year chart in your link. Looking at that and taking into account inflation, it looks to me like real wage growth has been higher under Trump. The 2.4% figure would be a "real", inflation adjusted number, since it's calculated using 1982-1984 dollars. The 4.2% or 4.9% under Obama would be before adjusting for inflation -- I can guarantee that. If real wage growth had been that high under Obama and if he were the one responsible I'd be praising him from the mountaintop.

It's possible both of us may have made a mistake in how we're looking at the data. I'm not sure whether what we're looking at is total wages or wages per person. We want to look at wages per person, adjusted for inflation.

"Instead of substantially increasing investment, the windfall businesses received largely went to paying off wealthy investors. One analysis of Fortune 500 companies found that just 20 percent of increased cashflow in 2018 was spent on increasing capital expenditures or research and development. The remaining 80 percent of cashflow went to investors through buybacks, dividends, or other asset planning adjustments. The vast majority of corporate stocks are held by the wealthy, including foreign investors, and thus they are the ultimate beneficiaries of the windfall corporate tax cuts."


https://www.americanprogress.org/iss...not-trickling/

"Corporations are spending 154 times as much on stock buybacks as they are spending on workers’ bonuses and wages. Authorizations for stock buybacks, which overwhelmingly benefit the wealthy, have increased by $1 trillion since the tax law was passed, while workers are getting $7.1 billion in one-time bonuses and wage increases.

The richest 1% own 40% of all stock; the richest 10% own 84%. [National Bureau of Economic Research/Washington Post] Stock buybacks waste money that could be used for useful investments, creating jobs and higher pay."

https://americansfortaxfairness.org/...rump-tax-cuts/

"The GOP tax cuts didn’t pay for themselves. They did, however, deliver a lot of stock buybacks.

It appears that a lot of the windfall is going to rewarding corporate shareholders by way of stock buybacks, where companies repurchase their own shares from the marketplace and leave remaining shareholders with a bigger chunk of the company and, therefore, greater earnings per share.

Stock buyback announcements surpassed $1 trillion for the first time ever this year, according to the investment research firm TrimTabs. Apple, which had about $250 billion in unrepatriated cash pre-tax bill, in May announced a $100 billion stock buyback."

https://www.vox.com/policy-and-polit...market-economy

[Tiny]

Originally Posted by SpeedRacerXXX

"Instead of substantially increasing investment, the windfall businesses received largely went to paying off wealthy investors. One analysis of Fortune 500 companies found that just 20 percent of increased cashflow in 2018 was spent on increasing capital expenditures or research and development. The remaining 80 percent of cashflow went to investors through buybacks, dividends, or other asset planning adjustments. The vast majority of corporate stocks are held by the wealthy, including foreign investors, and thus they are the ultimate beneficiaries of the windfall corporate tax cuts."


https://www.americanprogress.org/iss...not-trickling/

"Corporations are spending 154 times as much on stock buybacks as they are spending on workers’ bonuses and wages. Authorizations for stock buybacks, which overwhelmingly benefit the wealthy, have increased by $1 trillion since the tax law was passed, while workers are getting $7.1 billion in one-time bonuses and wage increases.

The richest 1% own 40% of all stock; the richest 10% own 84%. [National Bureau of Economic Research/Washington Post] Stock buybacks waste money that could be used for useful investments, creating jobs and higher pay."

https://americansfortaxfairness.org/...rump-tax-cuts/

"The GOP tax cuts didn’t pay for themselves. They did, however, deliver a lot of stock buybacks.

It appears that a lot of the windfall is going to rewarding corporate shareholders by way of stock buybacks, where companies repurchase their own shares from the marketplace and leave remaining shareholders with a bigger chunk of the company and, therefore, greater earnings per share.

Stock buyback announcements surpassed $1 trillion for the first time ever this year, according to the investment research firm TrimTabs. Apple, which had about $250 billion in unrepatriated cash pre-tax bill, in May announced a $100 billion stock buyback."

https://www.vox.com/policy-and-polit...market-economy

These are very biased sources. Part of what they wrote doesn't pass the smell test. This is ridiculous: "Corporations are spending 154 times as much on stock buybacks as they are spending on workers’ bonuses and wages." Corporations would be spending upwards of 10 trillion a year on salaries and wages. Salaries and wages dwarf corporate profits, dividends, buybacks, capital investment, whatever.

Capital spending is larger than dividends and buybacks. And why are dividends and buybacks bad? They enable corporations that don't see opportunities for profitable growth in their own businesses to return a higher share of profits to shareholders, who reinvest the proceeds presumably in enterprises that do have opportunities for profitable growth. You don't want a nation of companies that manufacture buggy whips and the like. You want corporate profits directed to businesses that produce good returns on capital. That's how you become more productive and create more prosperity.

As to America being predominantly a nation of spendthrifts, where far too many people live month to month and don't save and invest in the stock market, that's a huge problem. The solution isn't Bernie Sanders socialism. It's to get people to save and invest. If people won't do it on their own, maybe they need to be forced to. Maybe we need a system like Singapore, Australia or Chile where you take money from their employers and their paychecks and make them invest it. I say this despite my Libertarian instincts. Anyway, it makes a lot more sense to improve the lot of the middle class and the poor rather take the capital away from the capitalists.