Note to p. 112: "In 2007, U.S. corporations bought back some $831 billion of their stock, whole- number multiples of their earnings..." - Notes, etc., to "The End of Influence"

Stephen S. Cohen and J. Bradford DeLong (2010), The End of Influence: What Happens When Other Countries Have the Money (New York: Basic Books: 9780465018765).

When you have the money--and "you" are a big, economically and culturally vital nation--you get more than just a higher standard of living for your citizens. You get power and influence, and a much-enhanced ability to act out. When the money drains out, you can maintain the edge in living standards of your citizens for a considerable time (as long as others are willing to hold your growing debts and pile interest payments on top). But you lose power, especially the power to ignore others, quite quickly--though, hopefully, in quiet, nonconfrontational ways. An you lose influence--the ability to have your wishes, ideas, and folkways willingly accepted, eagerly copied, and absorbed into daily life by others. As with good parenting, you hope that by the time this happens those ideas and ways have been so thoroughly integrated that they have become part of what is normal and regular abroad as well as at home; sometimes, of course, they don't. In either case, the end is inevitable: you must become, recognize that you have become, and act like a normal country. For America, this will be a shock: American has not been a normal country for a long, long time.

« Note to p. 112: "bring into some question the data that evidenced much of the superior productivity performance of the US economy in recent, finance-driven, years..." | Main | Note to p. 113. "Finance was the driving force. It had achieved the cultural dominance that so often goes hand-in-hand with economic dominance.... Though a few tried to sound the alert..." »

Sunday, November 29, 2009

Note to p. 112: "In 2007, U.S. corporations bought back some $831 billion of their stock, whole- number multiples of their earnings..."

See Buttonwood (2009), Economist (March 16, 2009); also William Lazonick (2009), in Business Week (August 24-31). This leveraging-up was, of course, the last thing you would want an economic system that was in the throes of an asset bubble to do--and that it was in the throes of an asset bubble was not subject to much doubt by 2005 if not 2007.

Posted at 08:40 PM in Notes | Permalink

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See the entire four-year period:

http://norris.blogs.nytimes.com/2008/12/10/shareholder-value/

Posted by: Ken Houghton | Friday, January 01, 2010 at 07:46 PM

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