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My favorite Econ professor, Ernest Randa, focused on inventories for predictions.

Posted By: pangloss
Date: Thursday, May 30, 2019 at 03:17 pm

In the first Qtr 2019 economic report there was a big jump in inventories. That's an ominous leading economic indicator.

There was no excess demand for capital when they passed the tax cut. The market was high, P/E ratios were high, there was plenty of money.

Sure enough, the corporate tax cut yielded the highest sock buyback activity in history, not the hoped-for boost in capital investment.

Stock buybacks occur when the company has lots of cash but lacks opportunities for R&D and capital investment. Sitting on mountains of cash makes CEOs look bad - lacking vision for the future, etc. CEOs and their boards of directors get larger bonuses when stock prices are high. So, stock buybacks prop up the stock price, make the financial ratios look better, and executive bonuses are sustained.

All things considered, the economy needed investments in infrastructure more than a corporate tax cut and longer term, reduced deficit spending.

Just my opinion.

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Messages In This Thread


96GradAlum icon NEW: "A devastating analysis of the tax cut shows it’s done virtually no economic good" ... is anyone even remotely surprised? Other than UTE BC of course.
96GradAlum - -- Thursday 30 May 2019, at 02:08 pm [ID# 1947547] [reply]
(8)
o NEW: is anyone even remotely surprised? No but republicans will still defend it and feign surprise . (nm)
FlyfishingUte - -- Thursday 30 May 2019, at 02:31 pm [ID# 1947552] [reply]
(1)
Newbomb Turk icon NEW: They will claim it is fake news. That is one of their favorite go-to dog whistles. Right up there with "socialism". (nm)
Newbomb Turk - Top 25 Poster -- Thursday 30 May 2019, at 02:41 pm [ID# 1947553] [reply]
(2)
Red Don icon NEW: and baby killers and "tax and spend." (nm)
Red Don - Top 25 Poster -- Thursday 30 May 2019, at 04:45 pm [ID# 1947570] [reply]
(1)
tarheelio icon NEW: I voted for Jill, but I have to admit that the tax cut benefitted me. (nm)
tarheelio - -- Thursday 30 May 2019, at 02:55 pm [ID# 1947556] [reply]
(1)
96GradAlum icon NEW: Did you get a 14% cut like business did? Cuz I sure as hell didn't. (short)
96GradAlum - -- Thursday 30 May 2019, at 04:17 pm [ID# 1947567] [reply]
pangloss icon NEW: My favorite Econ professor, Ernest Randa, focused on inventories for predictions.
pangloss - -- Thursday 30 May 2019, at 03:17 pm [ID# 1947559] [reply]
(4)
MinnesotaUte icon NEW: Someone, UFS I think, posted a great article yesterday showing that the CRS analysis is a joke, I don't know if that article was specifically directed at this analysis, but suffice to say I would take them with a grain of salt or maybe ton (nm)
MinnesotaUte - -- Thursday 30 May 2019, at 03:56 pm [ID# 1947561] [reply]
96GradAlum icon NEW: If you can offer a better analysis then bring it! (nm)
96GradAlum - -- Thursday 30 May 2019, at 04:18 pm [ID# 1947568] [reply]
UtahFanSir icon NEW: Full disclosure...
UtahFanSir - -- Thursday 30 May 2019, at 06:13 pm [ID# 1947574] [reply]
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