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Politics : Mainstream Politics and Economics

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To: i-node who wrote (39022)	2/13/2013 1:16:54 PM
From: Wharf Rat	Read Replies (1) of 85487

"(unless the Waltons are keeping that 80 Billion under their mattresses)." They are; well, in accounts holding US treasury bonds. So are others. At least the Waltons are putting some money into windmills and panels. Hat tip for that. It's not structural unemployment, it's the corporate saving glut Posted byRebecca Wilder \| 3/21/2011 02:38:00 PM 3-sector financial balances, corporate saving, Rebecca Wilder 59 comments Mark Thoma rightly points out the hypocrisy of the deficit hawks' intent to cut spending while approving military spending in the same sentence. Ryan Avent furthers the dicussion by stating that Washington has used the 'dire fiscal' rhetoric to sell short-term cuts that were unwarranted, given that the fiscal problems are structural in nature. Me, I'd argue that the fiscal deficit is simply the consequence of corporate America's excess saving: the corporate saving glut - no I didn't mean the 'global saving glut'. Furthermore, the corporate saving glut is manifesting itself into the labor market, creating high and persistent unemployment. Some economists are wrongly referring to this as higher structural unemployment. angrybearblog.com = Our New York Times Op Ed on the Corporate Savings Glut Rob Parenteau and I have an op-ed at the New York Times today. Rob’s last post here argued energetically that the now-established trend of the corporate sector to save, as opposed to invest in growth, in advanced economies, and even most emerging economies, was tantamount to capitalists abandoning their traditional role. It reminded me of an article I had written in 2005, “ The Incredible Shrinking Corporation,” for the Conference Board’s magazine Across the Board, on how companies were trying to starve themselves into attractive- looking performance though the then-unprecedented act of saving in a time of economic expansion, which is tantamount to disinvestment. Rob’s post made further key points about the macroeconomic implications of corporate savings (given the norm of households savings as well) and made some policy recommendations. I wish the headline were different (“ Are Profits Hurting Capitalism?“), since the article is clearly about the corporate savings glut. Read more at http://www.nakedcapitalism.com/2010/07/our-new-york-times-op-ed-on-the-corporate-savings-glut.html#GfdcoDrpHDLwRDLg.99

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