Doug Henwood wrote:
> * The pressure not to invest but to ship surplus cash out to
> stockholders isn't the spontaneous desire of corporate managers -
> it's been shaped by the increased shareholder assertiveness of the
> last 25 years. If a firm invests too much for Wall Street's liking,
> its stock price will sag, and attract takeover targets. In other
> words, industry does not "dominate the banks."
If investment is so profitable, why wouldn't rational shareholders
support investment? Could it be the expectation that speculation will
have higher payoffs? Or is it just shorter time horizons? Below, you
suggest that marginal returns on new investment might be high.
> * Kuhn via Grossman attacks Lenin's metaphoric use of "overripeness"
> without adding any detail of his own. (Maybe Grossman offered it; I
> blush to admit I haven't read Grossman.) Why, if profitability is so
> high at the average, aggregate level, are we to assume that marginal
> returns on new investment are prohibitively low?
>
In the two-way traffic that you mention below, is it possible that the
US is a net exporter of capital? Does anybody really have a handle on
exports and imports of capital, especially when investments can be
parked in tax havens?
> * Few economies are capital exporters in any simple sense; for almost
> all, the traffic goes both ways - they both import and export capital.
>
> * Why is the U.S. a net capital importer on such a huge scale? Isn't
> ours the ripest capitalist economy of all? Why are we importing
> capital from China, the new kid on the block?
>
Does anybody have a measure of how much capital is moving back to China
in the form of real investments? I doubt that it equals $1 trillion,
but I assume that it is substantial.
I would very much like an answer to the next question that you raise below. It's a very interesting point.
> * What, if any, are the theoretical distinctions between capital
> import/export via government bonds, private securities, and direct
> investment?
>
p.s. Doug, did you get the manuscript that I sent?
--
Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 www.michaelperelman.wordpress.com