Re: rentier punishment of invesment.
On Sep 15, 2007, at 12:02 PM, bhandari@berkeley.edu wrote:
I have been really struck by Doug’s pithy formulation of the rentier punishment of investment.
Always gratifying to be strikingly pithy!
I think that we need to explore the shareholder revolution. Even when profits are retained, they are often not used
for accumulation but paring down debt, buying back stock, and merging and acquiring. That is, profits have often not been used for
accumulation as if rentiers have punishing investment and at times forcing shut downs and sell offs of assets. Any reading suggestions other than of course Doug’s Wall Street
which I shall revisit. I remember Doug quoting Jensen on the problem of
disgorging cash.
Rakesh, did you read Bernanke’s latest on the savings glut? He says
the U.S. has to invest more and reindustrialize to help get the c/a
back into balance. He gave the speech at a Bundesbank conference when
Wall Street expected him to talk about the subprime crisis and the
credit crunch. Instead, he took a long-term perspective. I think his
tacit message was a little slowdown would be a good thing, so don’t
expect a quick bailout. The markets didn’t pay much attention though.
Bernanke: http://www.federalreserve.gov/newsevents/speech/bernanke20070911a.htm.
Doug