[lbo-talk] US: A Giant Vacuum Cleaner That Sucks Up "All the World’s Spare Investible Cash"

[Yoshie Furuhashi]

> On 8/1/05, Doug Henwood <dhenwood at panix.com> wrote:
> > >See also Harry Shutt, The Trouble with Capitalism, chapter on  
> Coping
> > >with the Capital Glut:  "the inevitable consequence of  
> maintaining a
> > >high return on the capital stock as a whole is that yet more
> > >investible funds will be generated for which outlets must be
> > >found...Hence the effort now needed to sustain the market value of
> > >capital resembles the futile labor of Sisyphus..."
>
> Doug:
> > Hmm, capitalism has travelled a lot more ground over the centuries
> > than Sisyphus ever did.
>
> I haven't read Shutt, but the metaphor looks like it applies only to
> the era of neo-liberalism. The effort to raise profit rates suppresses
> consumer demand, which causes a surplus of capital. (cf.
> http://www.lines-magazine.org/articles/chris.htm)
>
> -- 
> Jim Devine
> "I am not a Keynesian." -- John Maynard Keynes

John Miller, who is really cute (see his photo at <http:// 
mrzine.monthlyreview.org/miller160705.html>), writes:

<blockquote>The U.S. economy has not just become a giant vacuum  
cleaner that sucks up "all the world’s spare investible cash," in the  
words of University of California, Berkeley economist Brad DeLong,  
but about one-third of that money comes from the developing world. To  
put this contribution in perspective: DeLong calculates that $90  
billion a year, or one-third of the average U.S. current account  
deficit over the last two decades, is equal to the income of the  
poorest 500 million people in India.

(John Miller, "Dollar Anxiety," Dollars & Sense 257, January/February  
2005, <http://www.dollarsandsense.org/archives/2005/0105miller.html>) 
</blockquote>

The question is why so much capital flows into the US.  Are returns  
(whether on US Treasury bonds or corporate stocks and bonds) here so  
hot, compared to the rest of the world???

Yoshie Furuhashi
<http://montages.blogspot.com>
<http://monthlyreview.org>
<http://mrzine.org>
* Mahmoud Ahmadinejad: <http://montages.blogspot.com/2005/07/mahmoud- 
ahmadinejads-face.html>;  <http://montages.blogspot.com/2005/07/chvez- 
congratulates-ahmadinejad.html>; <http://montages.blogspot.com/ 
2005/06/iranian-working-class-rejects.html>