On Sun, Feb 01, 2009 at 05:46:33PM -0500, Doug Henwood wrote:
>
> On Feb 1, 2009, at 4:11 PM, James Heartfield wrote:
>
>> And that was exactly what recommended the book to me. Still, without
>> making any unnecessary obeisance to 'Marxist Models' (the idea of a
>> 'model' itself being hostile to Marx's method of logical reconstruction
>> through abstraction) I thought that as good as Wall Street was as an
>> account of the process, I wanted to interpret the dynamic as being rather
>> the other way around, that the shareholders movement took off because
>> corporate accounts were bloated.
>
> Depends. When the shareholder revo got going in the late 1970s/early 1980s,
> profits were low, yet investment was too high. Michael Jensen theorized,
> and Henry Kravis put into practice, the notion that firms should instead
> distribute the cash to shareholders, who could then redeploy it to better
> (i.e., more profitable) uses through efficient financial markets. They got
> the corps to shovel out the cash, but it mostly stayed in the financial
> markets.
>
> Doug
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-- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com