It's All Obama's Fault - DOW Jones reaches 16,000 for first time ever

[Depreciating Asset]

You guys see all these jobs being created?!? It's raining jobs everywhere!!!!!!!

Look at all that trickle!

Corporate profits hit record as wages get squeezed

http://www.huffingtonpost.com/2013/03/06/eric-holder-banks-too-big_n_2821741.html



BOOTSTRAPS!!

This is definitely a serious indictment but it's only half of the puzzles. Income is one half of the financial statement. Expenses are the other. If goods are more than 10.7% cheaper for the bottom 90% then they are actually doing better.

I am not trying to throw shade on this chart or say that I support this level of income inequality (I certainly don't). I'm just trying to think about all sides of the argument. I don't know how much cheaper goods are in real terms than they were in 2002.

Maybe they are even more expensive which would make this an even worse indictment.

 

[Broke Wave]

Many of them did but not all. Airplanes, automobiles and television were private innovations. Polio vaccines, AIDS vaccines, increased agricultural production came from private industry. It's not all or nothing. Both play a role. We shouldn't just dismiss the role of corporations because we hate rich people and corporations. Not saying you are saying this but I feel like that spirit is coming through in some posts in the thread. Maybe most corporations do more harm than good but some of them do provide legitimate societal benefit.

Non of the things you mentioned would be what they are today without the billions spent by tax payers to innovate. Invention=/= innovation... the internet wasn't "invented" by DARPA but they sure as hell made it what it is today. I don't hate rich people or corporations so don't play that card with me, how do you take that from what I'm saying when I tell you a empircal fact. Corporate profits and innovations are not directly linked, does that lead you to believe I have Marxist leanings

 

[Depreciating Asset]

Dude not only is this incorrect, there is literally no correlation between the prevalence or availability of corporate profits and perceived or real innovation.

Corporate profits are at record highs and there is not some kind of innovation boom being precipitated by this fact, so even as a matter of current fact it's totally baseless.

If corporations are now experiencing record profits and I'm arguing that this will lead to innovation, then we need to give it time to lead to innovation. Corporations were making record profits in the 90s during the Clinton administration. That was the birth of an entire Silicon Valley industry that is still innovating today.

In 2013, many large companies are spending millions investing in Big Data (faster data processing, analysis and data science). This could be a terrible investment which leads to no grow or innovation. But it could also lead to synthesis with some other technology that we don't even realize yet and change the landscape in ways we can't imagine.

Also how can you be so sure that there's no correlation? Just because you don't see evidence of innovation doesn't mean it's not happening.

 

[Depreciating Asset]

Non of the things you mentioned would be what they are today without the billions spent by tax payers to innovate. Invention=/= innovation... the internet wasn't "invented" by DARPA but they sure as hell made it what it is today. I don't hate rich people or corporations so don't play that card with me, how do you take that from what I'm saying when I tell you a empircal fact. Corporate profits and innovations are not directly linked, does that lead you to believe I have Marxist leanings

None of the things I mentioned would be what they are today without corporate profits too. Agree?

 

[Type Username Here]

None of the things I mentioned would be what they are today without corporate profits too. Agree?

And most of the problems in the world today wouldn't exist if it wasn't for corporate profits. Wars, poverty, starvation, depleting resources, overpopulation, overfishing, lobbying, infiltrating our justice/government system, and so on.

Your point?

 

[Broke Wave]

If corporations are now experiencing record profits and I'm arguing that this will lead to innovation, then we need to give it time to lead to innovation. Corporations were making record profits in the 90s during the Clinton administration. That was the birth of an entire Silicon Valley industry that is still innovating today.

In 2013, many large companies are spending millions investing in Big Data (faster data processing, analysis and data science). This could be a terrible investment which leads to no grow or innovation. But it could also lead to synthesis with some other technology that we don't even realize yet and change the landscape in ways we can't imagine.

Also how can you be so sure that there's no correlation? Just because you don't see evidence of innovation doesn't mean it's not happening.

Again I'm going to have to label your claim as a baseless assumption. Whenever someone says "give it some time" with regards to economics, they are making a predictive claim based on an occurring situation and that is usually going deep into left field (i.e. the way the fed is printing money, gold will be 5k) and you have not given any statistical evidence to support your claims.

As you can see in the 90's before the Clinton boom, Corporate profits were below average so maybe you are basing your assumptions on faulty knowledge. You should do a closer reading of the data to draw more accurate conclusions because what you are saying does not add up.

As of today, 28% of every dollar made as corporate profit is in finance, and in dec 01 it was 45% of every dollar, but lets use today.

28 cents of every dollar made in corporate profits is in finance, according to your logic this is the industry in which the most innovation should occur... unfortunately financial innovation and engineering is not the type of innovation we are talking about, is it, friend

 

[Depreciating Asset]

And most of the problems in the world today wouldn't exist if it wasn't for corporate profits. Wars, poverty, starvation, depleting resources, overpopulation, overfishing, lobbying, infiltrating our justice/government system, and so on.

Your point?

I totally agree. I'm not defending corporations as some awesome invention of capitalism. I tend to dislike them as much as the rest of you. My point was that corporate profits often lead to innovation. That's the simple point I've been defending and addressing. That's it. Can't we agree on that and also agree with everything you said. They can both be true.

 

[DEAD7]

@Broke Wave It isn't an absolute(and no one said it was), but it is true."corporate profits often lead to innovation"

And most of the problems in the world today wouldn't exist if it wasn't for corporate profits. Wars, poverty, starvation, depleting resources, overpopulation, overfishing, lobbying, infiltrating our justice/government system, and so on.

Your point?

I totally agree.

Which one of those do you guys believe wouldnt exist without corporations?

 

[Depreciating Asset]

Again I'm going to have to label your claim as a baseless assumption. Whenever someone says "give it some time" with regards to economics, they are making a predictive claim based on an occurring situation and that is usually going deep into left field (i.e. the way the fed is printing money, gold will be 5k) and you have not given any statistical evidence to support your claims.

Economics as a science isn't good at predicting the future. It's only halfway good at providing models for the past so no I am not making any predictive claim. I said it could. Not it would. Would is predictive. Could is simply suggesting possibility.

As you can see in the 90's before the Clinton boom, Corporate profits were below average so maybe you are basing your assumptions on faulty knowledge. You should do a closer reading of the data to draw more accurate conclusions because what you are saying does not add up.

So what do you define as innovation? Did corporate profits from the Clinton boom go into financing Google? isn't Google an 'innovative' company? Didn't they invent the driverless car? Why do I need to show you empirical evidence when it's that obvious?

As of today, 28% of every dollar made as corporate profit is in finance, and in dec 01 it was 45% of every dollar, but lets use today.

28 cents of every dollar made in corporate profits is in finance, according to your logic this is the industry in which the most innovation should occur... unfortunately financial innovation and engineering is not the type of innovation we are talking about, is it, friend

Okay and as far as the finance profit argument, you just showed that 45% of every dollar in corporate profit was in finance. Okay. The question is do corporate profits lead to innovation. The question isn't who got the profits but what they did with the profits that they earned and if the profits that they earned led to innovation. Do you know what finance companies did with their profits in the 2000s? I don't either. I guess you will say that this means that I can't support my argument. Fine. But economic theory tells me that they are going to look a place to invest the money and try and find the most profitable place to put it. Certainly you can argue with that assumption. But let's assume it's true. If it is, they will look for companies that with growth potential which often means new inventions. And no invention =/= innovation but invention often leads to innovation and vice versa. We could go on like this for another 100 posts. I imagine you believe what you believe and won't be swayed until I have an empirical economic research paper detailing the relationship between profits and innovation. If that's what you need, I give up. But just know that you haven't proven that it isn't true either.

 

[Depreciating Asset]

Again I'm going to have to label your claim as a baseless assumption. Whenever someone says "give it some time" with regards to economics, they are making a predictive claim based on an occurring situation and that is usually going deep into left field (i.e. the way the fed is printing money, gold will be 5k) and you have not given any statistical evidence to support your claims.

As you can see in the 90's before the Clinton boom, Corporate profits were below average so maybe you are basing your assumptions on faulty knowledge. You should do a closer reading of the data to draw more accurate conclusions because what you are saying does not add up.

As of today, 28% of every dollar made as corporate profit is in finance, and in dec 01 it was 45% of every dollar, but lets use today.

28 cents of every dollar made in corporate profits is in finance, according to your logic this is the industry in which the most innovation should occur... unfortunately financial innovation and engineering is not the type of innovation we are talking about, is it, friend

Actually I FOUND an empirical paper showing the relationship between profits and R&D spending:

Here's a direct quote from page 1010 of the journal:

The "profit leads to R&D" hypothesis is given support by the results. The hypothesis is accepted at the 95% level for four (of the six) industries.

-------

Research and Development Activity and Profitability: A Distributed Lag Analysis
Ben Branch

Journal of Political Economy
Published by: The University of Chicago Press
-----------

You asked for an empirical paper. I provided one. The defense rests.

 

[DEAD7]

 

[ltheghost]

Shyt, they blame Obama went the Obamacare site is not up, they should blame him when the stock market soars. But we know the reality of the situation.

 

[Broke Wave]

Actually I FOUND an empirical paper showing the relationship between profits and R&D spending:

Here's a direct quote from page 1010 of the journal:

The "profit leads to R&D" hypothesis is given support by the results. The hypothesis is accepted at the 95% level for four (of the six) industries.

-------

Research and Development Activity and Profitability: A Distributed Lag Analysis
Ben Branch

Journal of Political Economy
Published by: The University of Chicago Press
-----------

You asked for an empirical paper. I provided one. The defense rests.

1994 is when that paper was written, and there is no other papers with this conclusion that I can find.

Sorry man.

 

[Depreciating Asset]

1994 is when that paper was written, and there is no other papers with this conclusion that I can find.

Sorry man.

No pleasing you I see. I'm sure this 2012 paper won't work for you either.

Industrial and Corporate Change, Volume 22, Number 3, pp. 649–678

Advance Access published September 10, 2012

Profits, R&D, and innovation—a model and a test

by Francesco Bogliacino and Mario Piantaz,

--------

From page 658 of the journal

"The baseline equation is a relation expressing the change in R&D stock (that we

proxy with the flow of R&D expenditure per employee) as an autoregressive,

path-dependent process shaped by previous R&D, which relies on internal financial

resources—lagged profits (t1 )—because of the difficulty to raise the necessary

funds on the financial market owing to the specificity of innovation risks (Hall,

2002; see also the review in Cincera and Ravet, 2010).

--------

Should I keep looking?

 

[Broke Wave]

No pleasing you I see. I'm sure this 2012 paper won't work for you either.

Industrial and Corporate Change, Volume 22, Number 3, pp. 649–678

Advance Access published September 10, 2012

Profits, R&D, and innovation—a model and a test

by Francesco Bogliacino and Mario Piantaz,

--------

From page 658 of the journal

"The baseline equation is a relation expressing the change in R&D stock (that we

proxy with the flow of R&D expenditure per employee) as an autoregressive,

path-dependent process shaped by previous R&D, which relies on internal financial

resources—lagged profits (t1 )—because of the difficulty to raise the necessary

funds on the financial market owing to the specificity of innovation risks (Hall,

2002; see also the review in Cincera and Ravet, 2010).

--------

Should I keep looking?

Yes you should, be cause you made a direct relationship that these people are not even making. Not even the supposed relationship between corp profits and R&D spending is a link between innovation and corporate profits, that's something induced by you. This is akin to saying tax cuts lead to innovation because they precipitate a direct increase in corporate profits. The reality was shown earlier by my graphs and evidence; we are in a corporate profit record threshold and there is no perceived boom in innovation such s the one in the 90's, and I'm using that 90's example because you brought it up as a barometer, when corporate profits were not even at any kind of high, in fact they were below average yet there was the boom that you believe to exist.