@thriftypineapple I feel like there are SO many other nuances for the past 30 years - everything from the prominence of the 401k to free trading, but the no-interest thing was effin huge.
@thriftypineapple The USSR fall was important, but I kind of think that was a blip along the road. To me, the US's big level up was WWII.
Europe was decimated, but you know whose manufacturing was still top-notch? Ours. So, not only could we feed the rest of the western world whose factories were destroyed, but we also could produce for the burgeoning US middle class.
Well, the 70s and 80s rolled around and we were tired of doing the hard work, so that is when we started outsourcing actual labor to slaves, making a ton of bullshit jobs, and basically living on debt to the benefit of corporations.
@crooklynbanks Whem the soviet union fell, global capitalism didnt need to pretend a little anymore that it provides workers a better alternative to socialism by giving them a decent slice of the pie.
@daniellea "He contradicts Greenwald et al (2022), saying that it wasn't reallocation of profits from labor to capital that drove the high corporate profits growth."
He isn't really disproving anything, though. The presence of profit-growth caused by low rates and low taxes doesn't negate the potential of profit-growth by other means.
Additionally, such profit-growth could actually be masking declines in profit that otherwise would have been more easily noticed if not for multiple profit-increasing phenomena (e.g., wage stagnation, exploitation of workers, low interest rates, low taxation).
@bablu It actually proves it to an extent. Lower corporate tax rates either means less government spending, much of which benefits the working man, and/or increased national debt which just kicks that can down the road and is a burden likely to be shared by all tax payers, not just corporate ones.
It IS reallocation, but instead of being direct it is indirect via corporate capture of the US government.
@daniellea The problem with this paper is that it takes a fundamental-centric view of stocks. But we've already seen that fundamentals don't matter. They should, but they don't. Excuses will always be made by overzealous investors to buy at any price. If investors have money to buy, they'll buy at any price.
The government can continue to provide liquidity for ever increasing PE multiples. We've seen valuation multiples expand even in times of profit stagnation or recession because money has to go somewhere, and right now investors have a lot of it. It's all about supply/ demand of money relative to investment opportunities. If the government continues decades more of expansionary policy (deficit spending, QE, whatever), where will investors put their money? It can only go so many places: stocks, bonds, real estate, commodities, art, crypto, and so forth. The world has an everything bubble because there is so much money floating around. What if the money supply just keeps going up?
