Wednesday, May 29, 2019

Rubio and Investing

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves. -William Pitt, British prime minister (28 May 1759-1806)

Ned is coming to Pittsburgh this weekend.
Mom and I are going to Austin.

"Reason" asks how the government can keep drugs off the street if they can't stop the flow of illicit substances in prisons, sealed and militarized buildings under its total control. "This is the nature of government."

Dietrich, the obnoxious Reds first baseman, has in 12 of his last 17 hits, hit homeruns.
The last six games the Pirates lost, they have lost by 6 or more.

In the battle over Alabama's new abortion law, political action committees opposing the measure lost on Election Day even while enjoying a roughly 100-to-1 money advantage, according to disclosures compiled by FollowTheMoney.org, a website run by the nonpartisan National Institute on Money in Politics.



Instacart is one of a slew of similar apps — DoorDash, Postmates, Shipt — paying tens of thousands of workers to deliver packages, food or groceries to strangers. Similar to those who drive for ride-share apps Uber and Lyft, delivery workers can choose when to work. But they don't have to invite strangers into their cars. This draws women — often in their 40s and 50s — who now make up more than half the contractors working for major food delivery apps.
Nearly 30 million acres of U.S. farmland are held by foreign investors. That number has doubled in the past two decades, which is raising alarm bells in farming communities.(npr)

While Trump's Attorney General William Barr oversees a probe into the origins of the Trump-Russia investigation, in which the Obama-era intelligence community has been accused of gross violations of the law - including spying and possible entrapment, fired FBI Director James Comey has been on the defensive, claiming to have "no idea what the heck" people like Barr are talking about in regards to allegations of malfeasance. 

At 11:30 a.m. on May 29, 1953, Edmund Hillary of New Zealand and Tenzing Norgay, a Sherpa of Nepal, became the first explorers to reach the summit of Mount Everest, which at 29,035 feet above sea level is the highest point on earth. 

                         Rubio and Investing

The chart below is telling. In the recession of 2010, companies went to the mattresses; they kept whatever money they had to weather the storm.  They invested nothing. Low investments mean low inventories, low research. The overall numbers show a similar direction: American companies are investing less. Either they anticipate trouble and are holding money or they are spending it somewhere to the expense of their future.
It is the latter. American companies are buying back their shares with their profits, forcing their stock price up and decreasing the overall market size. They are paying back stockholders, not investing for the future.
The non-financial business sector invests more in financial assets than in physical ones, and it returns almost all of its profits to shareholders instead of ploughing them back into the business. It’s no wonder productivity growth is so slow — innovation is being starved



This behavior has a name: shareholder primacy theory. And Sen. Rubio has some thoughts about it.
 “..shareholder primacy theory has tilted business decision-making toward delivering returns quickly and predictably to investors, rather than building long-term capabilities through investment and production.”

So far, so good. Then he says this:
“We need to get back to a point where we don't solely analyze the American economy on traditional economic measures,” he said. “GDP growth is important, but that alone doesn't tell us the full story. It has to be not just growth that we care about, but the kind of growth that creates stable jobs that allow strong families and strong communities to develop, which are the backbone of a strong economy. Our public policy should reflect that.” 

Soooo...Rubio sees the behavior of companies as contrary to their own best interests. And I'll bet he has a plan, probably starting with the garnering of cross- aisle support by agreeing with Sanders' view that there are too many deodorants. These inexperienced government wannabe business moguls always have a way to improve matters. I just worry it will take up the time they have set aside to rebuild Libya.

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