...presumably because their editorial standards wouldn't countenance it (and understandably so), but still I'm too lazy to let anything go to waste. Basically I was just trying to say that Livingston's argument couldn't survive the fact that he was confusing correlation for causation and effect for cause. Still, I appreciate his attempt to lend a new perspective; it's just that his has holes you can drive a truck through - and that's something both of our pieces seem to have in common.
To
the Editor:
In "It's Consumer Spending, Stupid"
(Op-ed, Oct. 26, 2011), James Livingston offers a provocative but ultimately
confused take on our economic woes. Business investment's shrinking share of
GDP is better understood as improvement over time to capital efficiency (compare
the cost difference of launching Google or Facebook to earlier counterparts
such as GE or Ford). Furthermore, elevated corporate cash balances were a
reaction to, not a cause of, the bursting housing bubble and ensuing credit
crunch.
His concerns about economic justice are admirable,
but it’s counterproductive to pit profits against wages, as not only do they
not stand in conflict (most companies cannot sustainably grow profits without
increasing payroll), but pension funds and 401(k) plans are among the biggest
shareholders. Indeed, while recent events have highlighted serious flaws in
corporate governance, concerned citizens should look to their considerable
collective power as owners, not workers or voters, to effect real change.
No comments:
Post a Comment