Obama's Regulatory Tsunami

[Raoul_Duke]

Uh. Bub. One of the most important metrics for a business is Cash Flow. Having large cash balances, especially in times of severe economic uncertainty, is just plain prudent management.

Like i said, they've been sitting on bigger and bigger piles of cash since the Reagan years. They can't find enough demand to cater to and invest to supply. And like I said, why is that?

Having Cash is a Good Thing, bub. It's a key component of working capital.

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

 

[boedicca]

Like i said, they've been sitting on bigger and bigger piles of cash since the Reagan years. They can't find enough demand to cater to and invest to supply. And like I said, why is that?

Having Cash is a Good Thing, bub. It's a key component of working capital.

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

No, we can't. It's clear companies are sitting on larger cash balances because they are not investing. A rational business would prefer to put the capital to use if there are reasonable investment alternatives in a favorable economic climate. As Obamanomics has created an unfavorable economic climate, businesses see that the begtter choice is to sit on that cash (or buy back stock).

 

[Meister]

Like i said, they've been sitting on bigger and bigger piles of cash since the Reagan years. They can't find enough demand to cater to and invest to supply. And like I said, why is that?

Having Cash is a Good Thing, bub. It's a key component of working capital.

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

Your talking about speculating about this when we have such a fragile economy right now?
More than likely they're waiting for better days...I would be.

 

[boedicca]

The unemployment figures prove that they are sitting on cash. If they were making investments, we'd see far stronger job creation (as happened after all other severe recessions).

 

[Raoul_Duke]

Having Cash is a Good Thing, bub. It's a key component of working capital.

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

No, we can't. It's clear companies are sitting on larger cash balances because they are not investing. A rational business would prefer to put the capital to use if there are reasonable investment alternatives in a favorable economic climate. As Obamanomics has created an unfavorable economic climate, businesses see that the begtter choice is to sit on that cash (or buy back stock).

They were sitting on that cash under the Bush administration too. They've been sitting on increasing levels of cash from the reagan administration through to Obama. And if, for obvious reasons, you don't count housing then investment has actually recovered to get back on the same trajectory it was before the recession:

So the actual evidence shows that Obama isn't discouraging investment any more than Bush was.

 

[Raoul_Duke]

Having Cash is a Good Thing, bub. It's a key component of working capital.

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

Your talking about speculating about this when we have such a fragile economy right now?
More than likely they're waiting for better days...I would be.

I agree.

 

[boedicca]

That's good to know. Can we rule out the idea that companies are just suddenly sitting on lots of cash because of the current government then?

No, we can't. It's clear companies are sitting on larger cash balances because they are not investing. A rational business would prefer to put the capital to use if there are reasonable investment alternatives in a favorable economic climate. As Obamanomics has created an unfavorable economic climate, businesses see that the begtter choice is to sit on that cash (or buy back stock).

They were sitting on that cash under the Bush administration too. They've been sitting on increasing levels of cash from the reagan administration through to Obama. And if, for obvious reasons, you don't count housing then investment has actually recovered to get back on the same trajectory it was before the recession:

So the actual evidence shows that Obama isn't discouraging investment any more than Bush was.

Bub - do you remember the Y2K and Dot Com crash? Y2K caused a huge acceleration in investment to comply with the deadline. After the DotCom crash, the market was flooded with surplus (cheap) inventory. You also neglect the impact of the housing bubble across other sectors.

You really have a disingenuous habit of misrepresenting swatches of data.

 

[Raoul_Duke]

The unemployment figures prove that they are sitting on cash. If they were making investments, we'd see far stronger job creation (as happened after all other severe recessions).

Which severe recessions are you thinking about?

 

[Raoul_Duke]

No, we can't. It's clear companies are sitting on larger cash balances because they are not investing. A rational business would prefer to put the capital to use if there are reasonable investment alternatives in a favorable economic climate. As Obamanomics has created an unfavorable economic climate, businesses see that the begtter choice is to sit on that cash (or buy back stock).

They were sitting on that cash under the Bush administration too. They've been sitting on increasing levels of cash from the reagan administration through to Obama. And if, for obvious reasons, you don't count housing then investment has actually recovered to get back on the same trajectory it was before the recession:

So the actual evidence shows that Obama isn't discouraging investment any more than Bush was.

Bub - do you remember the Y2K and Dot Com crash? Y2K caused a huge acceleration in investment to comply with the deadline. After the DotCom crash, the market was flooded with surplus (cheap) inventory. You also neglect the impact of the housing bubble across other sectors.

You really have a disingenuous habit of misrepresenting swatches of data.

So what you're saying is that that investment levels under Obama have recovered to equal a time when there was a huge investment bubble? And OK, let's include the impact of the housing bubble on other sectors. The bubble bursting in such an enormous way would naturally depress those sectors, right? So you're arguing that investment under Obama is even more impressive.

 

[Toro]

I have little doubt that some component of corporate cash has been built because of Obama. But that's not the main reason. Cash buildup is common after an asset bubble and credit collapse when credit becomes harder to come by and Treasurers have long memories of the cash markets drying up. Cash started accumulating a decade ago when commercial paper markets froze in Spring 2002. Cash shortages became acute after the Lehman collapse and companies couldn't roll their paper. Banks are doing the same thing. Banks are parking cash at the Fed for 0.25% while they rebuild their balance sheets. What happened in Japan is now happening in America.

 

[Toro]

Also, corporations are holding a lot of cash offshore since repatriating cash would be taxed at 35%. The US should change that law and not tax foreign earnings but also disallow some tax avoidance schemes that allow corporations to wash cash though offshore shell companies.

 

[boedicca]

The unemployment figures prove that they are sitting on cash. If they were making investments, we'd see far stronger job creation (as happened after all other severe recessions).

Which severe recessions are you thinking about?

Are you an historical illiterate? The Volcker recession was worse, with higher peak unemployment. Yet job creation roared back.


Here's how the Obama job "machine" compares to prior recoveries:

http://www.calculatedriskblog.com/2011/09/august-employment-report-0-jobs.html

It's not a pretty picture. He's done the opposite of what an economically literate leader would have done. And the result is millions unnecessarily under and unemployed.

 

[Raoul_Duke]

The unemployment figures prove that they are sitting on cash. If they were making investments, we'd see far stronger job creation (as happened after all other severe recessions).

Which severe recessions are you thinking about?

Are you an historical illiterate? The Volcker recession was worse, with higher peak unemployment. Yet job creation roared back.


Here's how the Obama job "machine" compares to prior recoveries:

Calculated Risk: August Employment Report: 0 Jobs (unchanged), 9.1% Unemployment Rate

It's not a pretty picture. He's done the opposite of what an economically literate leader would have done. And the result is millions unnecessarily under and unemployed.

Volcker initiated that recession. He raised interest rates to over 20% to choke off demand and kill inflation. When he started to cut rates all the pent-up demand that had been choked off by high interest rates caused an economic boom. And that was a time of comparatively high national savings -- average Americans had some money in the bank. This recession is very different. Americans are massively in debt and have just seen the value of their biggest asset -- their home -- fall in value, leaving lots of them paying a mortgage bigger than the value of their home. Interest rates are already effectively zero and can't be cut any further, although the fed is doing the best it can. Unlike the end of the 1980 recession when everything was booming right now we're suffering the aftermath of the biggest credit bubble in history.

What would an economically literate leader have done?

 

[Quantum Windbag]

Corporations are sitting on two trillion dollars. But they were sitting on two trillion dollars a few years ago when bush was in office. In fact the two trillion in their bank accounts has been steadily growing since 1980. They've got more and more money to invest because they're finding less and less demand to cater to. Why is that?

Let's assume that this regulatory tsunami is true and isn't just another GOP nutjob grandstanding. That means that there was less regulation previously. During the Bush administration there was no tax uncertainty, everybody knew taxes were going to be low or even lower! Bush cut regulation too, and due to decades of tax cutting and deregulation from reagan onwards taxes and regulation were the lowest they'd been in living memory under Bush. So how come Bush had the worst job creation of any US president and why did he see such poor economic growth compared with previous decades/presidents? Surely we should be seeing surging growth and employment due to all the good work on regulations and taxes over the past few decades?

Which regulations did Bush cut?

 

[Quantum Windbag]

Which specific regulations do you not like?

I suspect you won't answer because you don't know. You're just parroting what others have said, and if they don't give specifics, neither will you.

I was specific in another thread, and you ran away like a scared puppy. I am still waiting for any proof that this mythical deregulation that everyone complains about led to the recession.

 

[Raoul_Duke]

Corporations are sitting on two trillion dollars. But they were sitting on two trillion dollars a few years ago when bush was in office. In fact the two trillion in their bank accounts has been steadily growing since 1980. They've got more and more money to invest because they're finding less and less demand to cater to. Why is that?

Let's assume that this regulatory tsunami is true and isn't just another GOP nutjob grandstanding. That means that there was less regulation previously. During the Bush administration there was no tax uncertainty, everybody knew taxes were going to be low or even lower! Bush cut regulation too, and due to decades of tax cutting and deregulation from reagan onwards taxes and regulation were the lowest they'd been in living memory under Bush. So how come Bush had the worst job creation of any US president and why did he see such poor economic growth compared with previous decades/presidents? Surely we should be seeing surging growth and employment due to all the good work on regulations and taxes over the past few decades?

Which regulations did Bush cut?

We've been discussing this in the since 2009 88 percent thread and I have two long posts in there that detail what the bush administration did to the financial industry. You can click the quote buttons on those posts and reply to them as I've been inviting everybody else to do.

 

[Toddsterpatriot]

Corporations are sitting on two trillion dollars. But they were sitting on two trillion dollars a few years ago when bush was in office. In fact the two trillion in their bank accounts has been steadily growing since 1980. They've got more and more money to invest because they're finding less and less demand to cater to. Why is that?

Let's assume that this regulatory tsunami is true and isn't just another GOP nutjob grandstanding. That means that there was less regulation previously. During the Bush administration there was no tax uncertainty, everybody knew taxes were going to be low or even lower! Bush cut regulation too, and due to decades of tax cutting and deregulation from reagan onwards taxes and regulation were the lowest they'd been in living memory under Bush. So how come Bush had the worst job creation of any US president and why did he see such poor economic growth compared with previous decades/presidents? Surely we should be seeing surging growth and employment due to all the good work on regulations and taxes over the past few decades?

Which regulations did Bush cut?

We've been discussing this in the since 2009 88 percent thread and I have two long posts in there that detail what the bush administration did to the financial industry. You can click the quote buttons on those posts and reply to them as I've been inviting everybody else to do.

Two long posts with no proof Bush deregulated the financial industry.

 

[Quantum Windbag]

Corporations are sitting on two trillion dollars. But they were sitting on two trillion dollars a few years ago when bush was in office. In fact the two trillion in their bank accounts has been steadily growing since 1980. They've got more and more money to invest because they're finding less and less demand to cater to. Why is that?

Let's assume that this regulatory tsunami is true and isn't just another GOP nutjob grandstanding. That means that there was less regulation previously. During the Bush administration there was no tax uncertainty, everybody knew taxes were going to be low or even lower! Bush cut regulation too, and due to decades of tax cutting and deregulation from reagan onwards taxes and regulation were the lowest they'd been in living memory under Bush. So how come Bush had the worst job creation of any US president and why did he see such poor economic growth compared with previous decades/presidents? Surely we should be seeing surging growth and employment due to all the good work on regulations and taxes over the past few decades?

Which regulations did Bush cut?

We've been discussing this in the since 2009 88 percent thread and I have two long posts in there that detail what the bush administration did to the financial industry. You can click the quote buttons on those posts and reply to them as I've been inviting everybody else to do.

I am not going to go searching the board to make it easier for you. If you will not answer the question I will take it as you not having an answer, and proceed on that assumption.

 

[Quantum Windbag]

Which regulations did Bush cut?

We've been discussing this in the since 2009 88 percent thread and I have two long posts in there that detail what the bush administration did to the financial industry. You can click the quote buttons on those posts and reply to them as I've been inviting everybody else to do.

Two long posts with no proof Bush deregulated the financial industry.

I did notice that he seems to think that because he believes the result of a regulation is bad it proves that there were fewer regulations than there were before that regulation existed.

 

[rdean]

Uh. Bub. One of the most important metrics for a business is Cash Flow. Having large cash balances, especially in times of severe economic uncertainty, is just plain prudent management.

Like i said, they've been sitting on bigger and bigger piles of cash since the Reagan years. They can't find enough demand to cater to and invest to supply. And like I said, why is that?

Having Cash is a Good Thing, bub. It's a key component of working capital.

Unless it's hoarded. Or spent overseas and invested there. I'm tired of doing all the thinking for you right wingers.