Sunday, 1 January 2017 - 4:56pm

Published by Matthew Davidson on Sun, 01/01/2017 - 4:56pm in

This week, I have been mostly reading:

  • Stand, Fight, Resist — Jason Griffey: Neutrality favors the powerful, and further marginalizes the marginalized. In the face of the current political climate, with the use of opinions as bludgeons and disinformation as the weapon of choice for manipulation and intellectual coercion, it is up to those who value fact and believe in the care of those in need to stand up and positively affirm that to do otherwise is evil.
  • Going down the drain, putting this wondrous stock market at risk? — Wolf Richter: Companies in the S&P 500 spent about $3 trillion since 2011 to buy back their own shares, often with borrowed money. It’s part of a noble magic called financial engineering, the simplest way to goose the all-important metric of earnings per share (by lowering the number of shares outstanding). And it creates buying pressure in the stock market that drives up share prices. […] “Only” 362 of the S&P 500 companies bought back shares in Q3, the second lowest number in three years, with Q2 having been the lowest number (blue line in the chart below). [And, not unrelated:]
  • Apple CEO Tim Cook Met With Trump to “Engage” on Gigantic Corporate Tax Cut — Jon Schwarz, the Intercept: Cook first described how it was critical for Apple to “engage” with governments on what he called “our key areas of focus.” According to Cook, these include “privacy and security, education,” “advocating for human rights for everyone,” “the environment and really combating climate change” and “creating jobs” — i.e., nothing as mundane as money. But in the third paragraph, Cook acknowledged, “We have other things that are more business-centric — like tax reform.” [And, tying it all together a few months ago:]
  • Standing up to Apple — Robert Reich: Congress’s last tax amnesty occurred in 2004, when global U.S. corporations brought back about $300 billion from overseas, and paid just a tax rate of 5.25 percent rather than the regular 35 percent U.S. corporate rate. Corporate executives argued then – as they argue now – that the amnesty would allow them to reinvest those earnings in America. The argument was baloney then and it’s baloney now. A study by the National Bureau of Economic Research found that 92 percent of the repatriated cash was used to pay for dividends, share buybacks or executive bonuses.
  • James Galbraith Tells Us What Everyone Needs to Know About Inequality — Polly Cleveland reviews - well, quotes from - Jamie's new book at the D&S Blog: Galbraith adds a new insight: not only did the postwar high-tax regime induce corporations to keep executive pay in check, it also induced them to retain profits and reinvest them in the corporation. With the 1980’s “greed is good” transformation, rates of reinvestment slowed as executives started taking more for themselves—surely helping slow the overall rate of growth. [i.e. for currency-issuing governments, the purpose of taxation isn't revenue-raising; it's about steering the economy toward desirable public policy ends.]
  • A Chat (Avec Chat) — Wondermark, by David Malki !: PANEL 5: CLOSE UP: The teacup lies on the ground, shattered, the tea long since cold.