Sunday, March 19, 2017

Lazy American corporations

A guest on Larry Kudlow was talking about lazy American corporations. Kudlow is conservative, mind you. Conservative or not, there's still worry that excess money, in corporations, might not go to investment in new "plant and equipment." It often, instead, goes into companies buying back their stock, buying each other out and paying bonuses to their executives. A "jobs recovery" will need companies to be willing to take risk, invest in new products, technologies and so forth.

The guest also mentioned that technology is often a "deflation factor." Yes, I keep saying this. Technology can bring down prices and wages due to things like automation. That's an issue the Trump people aren't dealing with very well. Deflation can be a good thing as it means more goods and services for less, but it's hard on businesses and workers when other things, such as housing and healthcare costs, keep going up.

One problem discussed is low interest rates and easy money. I think in many cases, there's an illusion of prosperity created by low interest rates driving things like the housing bubble while actual growth of things like manufacturing is lagging. Then one can also ask, do we need more manufacturing? Think about the environment and how many products we need. Also, technology is improving things; smarter instead of bigger, but technology has its deflationary effects.

As for companies being "risk adverse," that's a big problem. The companies will blame regulation for their risk adverse behavior. They have a point, but I think there's a lot more to it than that. Also, of course, we do want safety and a clean environment.

In my opinion, it seems like corporations run on fear, to a large extent. Fear that they will loose wealth. That's no way to kindle an exciting recovery. We need something better. I think business has it's place, but it's kind of a tired paradigm. There's a lot of things, besides just business, that can bring vitality to our communities. Volunteerism, quality of life issues, change toward healthier and more environmentally friendly things. New beginnings.

Also things like Co-ops and non profits, of which I recently attended the Bellingham Food Co-op annual meeting and party. See photos here and scroll around here.

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