On Nov 18, 2013, at 11:23 AM, michael yates <mikedjyates at msn.com> wrote:
> The January 2014 Notes From the Editors in Monthly Review takes up the Krugman/Summers acceptance of the notion of secular stagnation. But it notes that the two economists ignore the problem of insufficient capital spending and its connection to the growth of oligopolistic markets, something that Hansen, Kalecki, Steindl, Baran, and Sweezy made more central to their analyses.
Capital spending was high in the mid-1970s, mid-1980s, and late 1990s. If you graph it, a clear uptrend is visible from the early 1950s through the mid-80s. But the shareholder revolution, theorized by Michael Jensen, thought it was too high and demanded more cash be turned over to the owners. It then fell into the early 1990s, only to rise again during the dot.com mania. The low level of capital spending in recent years, when combined with high profitability, is anomalous, and can't be explained by a near-timeless theory that's not validated by empirical data.
Doug