US Politics Mega-thread - Page 949

On March 21 2014 23:25 Nyxisto wrote:

But if no one has the money to buy the produced stuff companies are not going to invest into production and instead will chose to make more money from the financial markets instead.(which often again put the money into other financial products and so on and so forth)

There's really not that much to theorize. If too much capital is in the hand of only a few people they'll do stupid stuff with it because demand of real goods is too low. If companies don't have enough money they can't invest and make new cool stuff.
It's basically just an empirical question to find the distribution that guarantees that both is happening. But the financial crisis and the fact that the financial markets today are tens of times bigger than the real economy strongly indicate that we're well past this point.

On March 21 2014 23:25 Nyxisto wrote:

But if no one has the money to buy the produced stuff companies are not going to invest into production and instead will chose to make more money from the financial markets instead.(which often again put the money into other financial products and so on and so forth)

There's really not that much to theorize. If too much capital is in the hand of only a few people they'll do stupid stuff with it because demand of real goods is too low. If companies don't have enough money they can't invest and make new cool stuff.
It's basically just an empirical question to find the distribution that guarantees that both is happening. But the financial crisis and the fact that the financial markets today are tens of times bigger than the real economy strongly indicate that we're well past this point.

On March 21 2014 23:25 Nyxisto wrote:

But if no one has the money to buy the produced stuff companies are not going to invest into production and instead will chose to make more money from the financial markets instead.(which often again put the money into other financial products and so on and so forth)

There's really not that much to theorize. If too much capital is in the hand of only a few people they'll do stupid stuff with it because demand of real goods is too low. If companies don't have enough money they can't invest and make new cool stuff.
It's basically just an empirical question to find the distribution that guarantees that both is happening. But the financial crisis and the fact that the financial markets today are tens of times bigger than the real economy strongly indicate that we're well past this point.

On March 22 2014 01:02 JonnyBNoHo wrote:

Like I already told IgnE, focusing on global over accumulation makes even less sense. Billions have far less capital stock to work with than the developed world and they're poorer for it. Capital flowing to the US to fund consumption is more of a mis allocation of capital rather than an over accumulation of capital. Developing countries need more factories and more power plants, which requires investment.

If you want to run with the global savings glut story you can, but it's different from the Marxist over accumulation story. That situation was driven by a lot of low income savers having their savings channeled into their economy's export sector and holding of foreign reserves via government policy. It wasn't a situation of capitalists saving too much and desperately trying to find a home for their capital. Their capital could have been used to finance domestic activity, but they chose to finance exports instead.

On March 22 2014 03:56 JonnyBNoHo wrote:
It could be that. Depends on the robots...

Anyways, if we're talking stock you don't get the army unless you issue shares. That's part of the funding to get the robots. So it's similar to today - if you want to raise capital you need to reach out to a lot of places, many of which have strong ties to the common rabble (banks, insurance co.'s, pension funds, public trusts, endowments, etc.).

On March 22 2014 01:34 WhiteDog wrote:

When you say it is a misallocation of capital, you are right, but you are also going against everything you said previously (the hypothesis of the efficiency of financial market, that I critized and that you tried to defend some month ago).

Of course there is a misallocation (as in financial market are not working efficiently), but even if the capital was rightly allocated, it would not lead to an economic growth that is comparable to the rate of return on capital, for obvious reasons. When we say overaccumulation, nobody is saying there is too much capital - something that you don't seems to understand - but we imply that capital in relation to income has become too important and that there are no forces that would change this trend.

To evaluate that, you don't need to evaluate the capital in a society by itself, you need to evaluate the capital, in relation to the income, and thus the rate of return in relation to both GDP growth AND potential growth. In a world where GDP growth will never be high enough for the current rate of return on capital to be sustainable, you are in a situation of overaccumulation. I'm not talking about the global saving glut, by the way, because I'm not saying the demand is low for some theorical reasons and that we can fix the whole problem through policy that sustain demand, I'm saying the dynamics of capitalism push us towards a capital overaccumulation where demand is being restricted for profit - what needs to be fixed is capital and not demand.

You think Marx don't talk about demand ? You think Keynes and Marx are that far off ? Keynes is a just light Marx.

On March 22 2014 01:34 WhiteDog wrote:

When you say it is a misallocation of capital, you are right, but you are also going against everything you said previously (the hypothesis of the efficiency of financial market, that I critized and that you tried to defend some month ago).

Of course there is a misallocation (as in financial market are not working efficiently), but even if the capital was rightly allocated, it would not lead to an economic growth that is comparable to the rate of return on capital, for obvious reasons. When we say overaccumulation, nobody is saying there is too much capital - something that you don't seems to understand - but we imply that capital in relation to income has become too important and that there are no forces that would change this trend.

To evaluate that, you don't need to evaluate the capital in a society by itself, you need to evaluate the capital, in relation to the income, and thus the rate of return in relation to both GDP growth AND potential growth. In a world where GDP growth will never be high enough for the current rate of return on capital to be sustainable, you are in a situation of overaccumulation. I'm not talking about the global saving glut, by the way, because I'm not saying the demand is low for some theorical reasons and that we can fix the whole problem through policy that sustain demand, I'm saying the dynamics of capitalism push us towards a capital overaccumulation where demand is being restricted for profit - what needs to be fixed is capital and not demand.

You think Marx don't talk about demand ? You think Keynes and Marx are that far off ? Keynes is a just light Marx.

CHARLOTTE, N.C. (AP) — North Carolina regulators say Duke Energy illegally pumped 61 million gallons of contaminated water from a coal ash pit into the Cape Fear River, marking the eighth time in less than a month the nation's largest electricity company has been cited for environmental violations.

The pumping violated the terms of Duke's wastewater permit at its Cape Fear Plant, State Department of Environment and Natural Resources spokesman Jamie Kritzer said Thursday. Kritzer said the agency has issued Duke a formal notice of violation, which could result in hefty fines.

Regulators from the agency said the illegal pumping had been going on for months. It wasn't immediately clear if Duke's efforts to empty the pond were related to a crack in the earthen dam holding back the coal ash. Duke first disclosed the existence of the crack to regulators on Thursday.

Inspectors are trying to determine the cause of the crack, but the dike does not appear to be in imminent danger of collapse, said State Dam Safety Engineer Steve McEvoy.

Duke did not respond Thursday to requests for comment from The Associated Press.

A Feb. 2 pipe collapse at a similar Duke coal ash dump in Eden coated 70 miles of the Dan River with toxic sludge. Duke has nearly three dozen other ash pits spread out at 14 coal-fired power plants across the state.

The state is now testing water samples from the Cape Fear River for signs of hazardous chemicals. Coal ash contains arsenic, lead, mercury and other heavy metals highly toxic to humans and wildlife.

Several sizable cities and towns are downstream of the Duke plant, including Sanford, Dunn, Fayetteville and Wilmington. Kritzer said municipal officials in those communities have reported no problems with drinking water.

Duke's dumping was first spotted March 10 by the environmental group Waterkeeper Alliance, which took aerial photos of two large mobile pumps at the facility. The pumps appeared to be sucking water directly from a large coal ash dump into nearby woods and into a canal leading to the river.

On March 22 2014 05:32 WhiteDog wrote:

Trends change all the time ? Do you see the graph I linked ? At which point do you see a change in this trend ?
The only moment where capital is getting lower is when it is effectively either destroyed by the second world war, or greatly reduced by taxations or crisis. It is the whole case behind the arguments : what does push our economy toward accumulation or not ? And the response is that there are no economic forces, aside from growth, that can prevent an endless accumulation of capital.

It is absolutly false, and rather short sighted, to make the comparaison between the rate of accumulation - something that with the current data has been shown to be quite constant in its evolution other the world - and any other kind of "predictions" where the historic data shows not only change in trends, but also an erratic evolution.

On March 22 2014 03:58 Sub40APM wrote:

Not really. There are plenty of large wholly private companies.