Daily Archives: February 8, 2015

Joy in Rightieville Over a Faux Climate Change Scandal

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Did you know there is a global warming scandal? A novelist with no known scientific background named James Delingpole writes for Breitbart that he knows for a fact that organizations like NASA and NOAA are falsifying the data people are going by to make claims of global climate change. This claim has been picked up by The Telegraph, no less, which I’ve noticed publishing science denialism propaganda in the past. And the whole right blogosphere is eating this up and crowing about the “scandal,” utterly oblivious to the flagrant hinkyness of their source.

Reading on, we learn that the scandal was “broken” by a retired accountant named Paul Homewood who has made something of a name for himself by writing inane science-denialist articles for pseudo-science websites.

In brief, wingnuts, wake us up when you’ve got scientific, peer-reviewed data. Otherwise, just keep playing in traffic. Thanks much.

Stock Buybacks Are Strangling America

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Stuff worth pondering in an article by Nick Hanauer, “Stock Buybacks Are Killing the American Economy.”

As economic power has shifted from workers to owners over the past 40 years, corporate profit’s take of the U.S. economy has doubled—from an average of 6 percent of GDP during America’s post-war economic heyday to more than 12 percent today. Yet despite this extra $1 trillion a year in corporate profits, job growth remains anemic, wages are flat, and our nation can no longer seem to afford even its most basic needs. A $3.6 trillion budget shortfall has left many roads, bridges, dams, and other public infrastructure in disrepair. Federal spending on economically crucial research and development has plummeted 40%, from 1.25 percent of GDP in 1977 to only 0.75 percent today. Adjusted for inflation, public university tuition—once mostly covered by the states—has more than doubled over the past 30 years, burying recent graduates under $1.2 trillion in student debt. Many public schools and our police and fire departments are dangerously underfunded.

Where did all this money go?

The answer is as simple as it is surprising: Much of it went to stock buybacks—more than $6.9 trillion of them since 2004, according to data compiled by Mustafa Erdem Sakinç of The Academic-Industry Research Network. Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock.

The more I learn about stuff going on, the more I think we should give up trying to live in the 1 percent’s world and just go build ourselves cottages on the prairie somewhere. We takers, we undeserving poor, should be the ones who “go Galt.”

In the past, this money flowed through the broader economy in the form of higher wages or increased investments in plants and equipment. But today, these buybacks drain trillions of dollars of windfall profits out of the real economy and into a paper-asset bubble, inflating share prices while producing nothing of tangible value.

As with many other things, the rules that used to discourage this practice were changed during the Reagan Administration, and the finance guys get more and more brazen about it all the time.

But … but … but … Free Markets (Blessed Be They)! Most of the commenters seem to think Hanauer is some airhead socialist who doesn’t understand how real he-men run an economy.