President Trump: The NEW one and only politics thread

The conversation on here about the unemployment rate. ... and then this post. ... are always interesting to me.

Corporations, in the aggregate, have a record amount of cash on their balance sheets, as you said. They also have record levels of debt. Essentially, interest rates have been artificially suppressed, and lending standards don't exist because of the distortions the monetary mandarins have created. And companies have borrowed trillions of dollars, or put another way, several dollars of debt for every dollar they have actually earned over the last 8, 9 years.

Sure that has put a lot of cash on their balance sheets. It's phony. You'd have a lot of cash on hand if you maxed out every credit card in your pocket with a cash advance. Where does that leave you ultimately, and what is the end game going t obe?

It doesn't "trickle down" as you put it, because we have had a middling, depressed economy for the recovery that happened after 2009. There is no incentive to invest in plant and equipment and opening new stores, etc. in an economy that doesn't have the growth to support that investment. But when you can borrow for nothing and do it at artificially cheap levels. ... you borrow a lot, load up your balance sheet with debt and then distribute the money to your shareholders via stock buybacks and dividends. Or if you are a company that isn't even viable, you can just keep borrowing and exist for years that way as a zombie company that exists only on more and more debt. That is why worldwide equity prices have gone up so much. Fixed income investors being robbed of their risk-free yield by the manipulation, have had to reach into riskier places and when stocks pay them a dividend that makes up some of what they are being robbed of, and stock buybacks are creating phony capital gains for as long as the scheme can continue. ... you get reckless behavior that feeds the bubble until it pops. There is eventually a heavy price to pay for that stupidity.

It also doesn't benefit the actual economy in any way -- it does the exact opposite, as most people have experienced (and why Donald Trump got elected). You are creating unrealized paper gains for a lot of people, who are going to see those gains go poof at some point when all of the leverage that has built up creates the inevitable bust (that comes after the phony boom). Some rich people will get way richer along the way, and get out in time. But the vast majority of the population is struggling. That unemployment rate is nonsensical when you have people who 15, 20 years ago had one manufacturing job that paid more than the 2 jobs waiting tables or tending bar that they have now trying to get by.