Via
https://wtfeconomy.com/machine-money-and-people-money-29b497eeb9d0
but it’s better than the essay from whence it came.
Monthly Archives: August 2018
Profits Without Prosperity
Apparently stock buybacks, for the sake of enriching the richest, are a major factor in income inequality.
Five years after the official end of the Great Recession, corporate profits are high, and the stock market is booming. Yet most Americans are not sharing in the recovery. While the top 0.1% of income recipients—which include most of the highest-ranking corporate executives—reap almost all the income gains, good jobs keep disappearing, and new employment opportunities tend to be insecure and underpaid. Corporate profitability is not translating into widespread economic prosperity.
The allocation of corporate profits to stock buybacks deserves much of the blame. Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.
The buyback wave has gotten so big, in fact, that even shareholders—the presumed beneficiaries of all this corporate largesse—are getting worried. “It concerns us that, in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies,” Laurence Fink, the chairman and CEO of BlackRock, the world’s largest asset manager, wrote in an open letter to corporate America in March. “Too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks.”
Why are such massive resources being devoted to stock repurchases? Corporate executives give several reasons, which I will discuss later. But none of them has close to the explanatory power of this simple truth: Stock-based instruments make up the majority of their pay, and in the short term buybacks drive up stock prices…
Graph: How the Financial Sector Consumed America’s Economic Growth
The growth of the financial industry has been a boon for its highly-paid managers. According to New York University economist Thomas Philippon, who contributes one of the most striking chapters in Rethinking the Financial Crisis, “total compensation of financial intermediaries (profits, wages, salary and bonuses) as a fraction of GDP is at an all-time high, around 9% of GDP.”
To give those numbers some context, consider that 9 percent of US GDP last year was about $1.4 trillion—an unprecedented windfall for America’s capitalist class. “What does society get in return? Or, in other words, what does the finance industry produce?”
Historically, the unit cost of intermediation has been somewhere between 1.3% and 2.3% of assets. However, this unit cost has been trending upward since 1970 and is now significantly higher than in the past. In other words, the finance industry of 1900 was just as able as the finance industry of 2010 to produce loans, bonds and stocks, and it was certainly doing it more cheaply. This is counter-intuitive, to say the least. How is it possible for today’s finance industry not to be significantly more efficient than the finance industry of John Pierpont Morgan?
The short answer is that Wall Street, for the last thirty years or so, has been skimming prodigiously from the top. The graph above shows how the total economic cost of financial intermediation grew from under 2 percent in 1870 to nearly 6 percent before the stock market collapsed in 1929. It grew slowly throughout the postwar expansion, reaching 5 percent in 1980. Then, beginning during the deregulatory years of the Reagan administration, the money flowing to financial intermediaries skyrocketed, rising to almost 9 percent of GDP in 2010.
https://tcf.org/content/commentary/graph-how-the-financial-sector-consumed-americas-economic-growth/
Amazing Octopus – Most Intelligent Animal on Earth?
The translated narration isn’t very good, and there are some editing glitches here and there, but this video describes some interesting experiments, and has some sections of nice octopus footage.
From _The Crow Road_
I’m not sure yet that I would recommend this book, but it sure does have some lovely bits <3
Telling us straight or through his stories, my father taught us that there was, generally, a fire at the core of things, and that change was the only constant, and that we – like everybody else – were both the most important people in the universe, and utterly without significance, depending, and that individuals mattered before their institutions, and that people were people, much the same everywhere, and when they appeared to do things that were stupid or evil, often you hadn’t been told the whole story, but that sometimes people did behave badly, usually because some idea had taken hold of them and given them an excuse to regard other people as expendable (or bad), and that was part of who we were too, as a species, and it wasn’t always possible to know that you were right and they were wrong, but the important thing was to keep trying to find out, and always to face the truth. Because truth mattered.
Stonecarving
<3
Mirrored Installations by Sarah Meyohas Create Infinite Tunnels Strewn With Dangling Flowers | Colossal
In artist Sarah Meyohas‘s series Speculations, infinite tunnels are created with facing mirrors set against pastel backdrops. Smoke, flowers, and finger tips border the reflective surfaces, creating dream-like environments that pull the viewer deep into the image’s frame. Meyohas is interested in the creating a seductive quality in each of the photos. “Whether it’s the colors or the flowers drawing you in, I want viewers to feel like they’re being drawing into the void, like standing upon a precipice,” the New York City-based artist tells Sleek Magazine. You can see more of her mirrored works on Instagram. (via Contemporary Art Blog)
https://www.thisiscolossal.com/2018/08/mirrored-installations-by-sarah-meyohas/
Theo Jansen’s New Strandbeest Roams the Beach Like an Undulating Caterpillar | Colossal
A new strandbeest! Hooray!!
Earlier this summer artist Theo Jansen (previously) revealed UMINAMI, a new addition to his series of wind-powered strandbeests. The kinetic sculpture is much thinner than previous iterations, and is made without hinging joints so it does not need to be lubricated when roving along the sandy shore. The fabricated creature seems to imitate the motion of a crawling caterpillar, producing an undulating movement as it sweeps across the beach. You can watch other strandbeests in motion on Youtube. (via Laughing Squid)
https://www.thisiscolossal.com/2018/08/theo-jansens-new-strandbeest/
Opinion | The Myth of Watergate Bipartisanship
🙁
Reporters and political commentators often express frustrated surprise at the steadfast support of President Trump from most Republicans in the House and Senate. But they shouldn’t — it has happened before.
In fact, when these critics refer back to the Watergate era as a time of bipartisan commitment to the rule of law over politics, they get it exactly wrong. Defending the president at all costs, blaming investigators and demonizing journalists was all part of the Republican playbook during the political crisis leading up to the resignation of President Richard Nixon.
Despite the fact that 32 people and three companies have been indicted so far by the special counsel, Robert Mueller, only four of 11 Republican members of the Senate Judiciary Committee joined Senate Democrats earlier this year in an effort to protect Mr. Mueller’s investigation. The House majority leader, Kevin McCarthy of California, said in June that he thinks “the Mueller investigation has got to stop.” Senator Rand Paul of Kentucky and the House Intelligence Committee chairman, Devin Nunes of California, have joined Mr. Trump in calling the investigation a “witch hunt.”
Dispiriting, perhaps, but not shocking or unprecedented. In late 1972, when a Democratic congressman, Wright Patman of Texas, began to investigate connections between Mr. Nixon’s aides and the Watergate burglary, the House Republican leader, Gerald Ford of Michigan (who later succeeded Mr. Nixon as president), called it a “political witch hunt,” according to the historian Stanley I. Kutler in his book “The Wars of Watergate.”
A New Citizen Decides to Leave the Tumult of Trump’s America | The New Yorker
Still, however much I assure myself that my choice is a bold one, it is also a retreat of sorts. The terrible thing—the unspecified, unimaginable thing that I used to say could dislodge me from America—finally happened, and not to me alone but to the country itself. I’m not leaving because of Trump, but I’m not not leaving because of him, either. The day after the 2016 election, George and I dropped our son off at school, and we walked in endless, shocked circles around the park at the end of our street. We saw friends, and embraced them with few words, in tears; it was as if everyone were in mourning. We could leave, George and I began to whisper to each other. Should we leave? When will we know whether we should or not? When might it be too late?
I’m not the only one: during the past year and a half, a trickle of foreign-born or foreign-partnered friends began to leave New York, and everyone I know who has a second passport, or has the right to get one, has begun to assess her options…