Threads: Guy pays me $50 for a speaker

[LiberalArkie]

Guy pays me $50 for a speaker,.
I use that $50 to get dinner.
The restaurant owner gives it to the waitress
The waitress uses it on some vintage clothing
The 2nd hand shop uses it to build a new display case
The carpenter uses it to fill his tank
The gas station uses it to pay Exxon Mobile
And Exxon Mobile invests it in the bank where it will sit for decades making them interest and doing nothing for the economy.
Billionaires are hoarders that are driving prices up.

Post by @d_ace_jackson

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[Midnight Writer]

1. Excellent.

Think how much of the money you spend that goes to a person or entity that is much wealthier than you are.

Compare that to how much of your spending ends up in the pocket of someone poorer than you.

I reckon the ratio is about 95/5.

[Lurker Deluxe]

29. Well ....

I am sitting here at the local watering hole having a couple. When I leave I will tip this lovely young lady $20.

Do I make more than the owner of the watering hole … maybe. I damn sure make more than the hostess.

In the morning I will stop and get a cup of coffee from a mom and pop shop for $5. Do I make more than the owner, most likely.

At the end of the pay period my employer will pay me. They certainly have more money than .

Money moves and it moves in all directions, always has and always will.

The strange part of this interaction is the guy sitting next to me just bought me a shot, because it is Tuesday and his pocket is full. By the end of the week he will ask me to spot him $50, and I will.

The decisions he makes determines his lifestyle and although he walked across the street to get here past my new car he sits here and spends his check on buying drinks for others.

Great guy, will always be broke.

And although his politics are whack, he is very typical of those who cry about “others” taking what is “his”.

Just as those who think the “corporations” are stealing and hoarding.

XOM has never bought me a beer and asked for money to loan 3 days later. They have bought me a drink at the expo downtown.

Different strokes.

[Disaffected]

2. Except the bank doesn't sit on it ("for decades").

The bank will lend it to somebody/company etc. who in turn will spent it on something etc.....

As well, I doubt Exxon Mobil(no "e" ) would simply stick it in a bank, they would also spend it on something.

[flashman13]

3. Like stock buy backs and dividends to stock holders.

Neither use benefits the greater economy.

[Disaffected]

5. Both of which though keep the funds mobile and

flowing through the economy (which was the original topic).

[Bernardo de La Paz]

14. Stock buybacks inject money into the economy because the stock has to PAID for. Likewise dividends

Both benefit the greater economy.

[flashman13]

18. Stock buy backs waste productivity. They represent a failure to strengthen and build

the company for the long term in exchange for a momentary money high for upper management and stock holders.

[Bernardo de La Paz]

19. Wrong. Stock is just a form of currency: a liquid asset that can be switched to cash and back.

If a company has more money than it can invest at the time, it can buy back stock, which raises the price of the stock. The higher stock price makes it possible to borrow money later or sell stock later to raise money when an opportunity for investment arises.

They are not a failure. It is not a "money high". They don't waste productivity. The money goes into the economy where it can be productive. And the enhanced stock value can bring money back later when it can actually be used by the company.

[flashman13]

25. No they don't. They are a form of corporate cancer. Enough said.

[Bernardo de La Paz]

27. You will be unable to explain a coherent true understanding of your bizarre theory.

Simply repeating your statement, as you have done, is tantamount to an admission you have nothing. Since you have not responded to my points, we may assume that perhaps you have not read them, or do not understand them, or you have nothing.

Go ahead, try. Or accept that you have nothing. An emotional reaction based on old tropes is not a coherent or true understanding.

Remember the premise: "If a company has more money than it can invest at the time". Companies would prefer to invest in new production or new markets or even new products, but that is not always possible.

Try. Maybe you will learn something in the discussion.

[cachukis]

31. Ah yes, but cash in action(the flow) is what makes

the world go 'round.

[Bernardo de La Paz]

32. Exactly. If it can't be put in motion, then plow it back into the company, if you have confidence in the company

It can be deployed later when opportunity arrives.

[cachukis]

33. High brow. But the abuses seem to abound in

the dissemination of the rewards. The gap widens.

[Bernardo de La Paz]

34. Yes, the disparity in wealth and income btwn the 1% and the 50% is a big unsustainable problem. . . . nt

[W_HAMILTON]

35. So you DO understand the multiplier effect!

I was beginning to think you didn't, with how you were defending stock buybacks etc. as if they were equivalent to direct spending by everyday consumers.

Now, just to confirm, tell me which you think would have a more of a positive impact on our economy: (a) giving billions of dollars to the richest companies and individuals or (b) giving billions of dollars to families making less than $100k/year?

[Bernardo de La Paz]

36. Obviously b) giving to families. They will spend most of it in relatively short order.

It's why the tRump orientation trying to sell billionaires as the engine of job creation is so ignorant. The Big Billionaire Bill does the opposite, ballooning the deficit and debt to give a gift to billionaires who are likely to park it in art and gold and bitcoin crap.

Per Krugman:

[W_HAMILTON]

37. Yes -- and that's the point the OP was making.

[Bernardo de La Paz]

38. I direct you to my first post in this thread, #12. OP has a point but their argument does not make their point. . . nt

[Bernardo de La Paz]

13. You get it. So many don't. . . .nt

[JoseBalow]

4. That's also why "Trickle Down" is bullshit

Rich people don't spend extra money, they invest it.

[Bernardo de La Paz]

15. Nothing wrong with investing. The bullshit in "Trickle Down" is parking bucks in real estate and artwork. . . nt

[CaptainTruth]

6. My first thought was "What was the speaker?"

Yes, I'm a musician & audio geek.

Sorry.

[littlemissmartypants]

9. I understand. I wondered something similar... "Who was the speaker?"

😎

[Codifer]

7. In another time:

Feller goes to an inn for ale. After a bit he has the urge to pee.

He leaves his pouch on the bar and the innkeeper sees a gold coin of value.

The impulse is too great and the innkeeper snatches it and pays the waitress her back-pay.

The waitress is delighted because her grocer has been hounding her for gold she owes him and she is finally able to pay up.

The grocer, likewise, pays his debt with the cobbler.

In his turn the cobbler is able to get square with the blacksmith.

The blacksmith is delighted to reimburse the hooker he had been boinging.

The hooker pays her back rent to the innkeeper who manages to slip the gold back into the pouch just before the stranger returned from the outhouse.

So: Everyone's debts have been paid, no one lost gold, no one gained gold. Every one is satisfied.

Wait. What?

[Bernardo de La Paz]

16. Money in motion. You get it.

Investing is a form of money in motion.

Investing in a startup pays the salaries of the engineers until sales start coming in. Salaries are money in motion.

[druidity33]

21. Except someone is a thief. nt.

[Cheezoholic]

8. Excellent point and on top of that, they don't employ anyone, at least not in the numbers companies did 50 years ago n/t

[littlemissmartypants]

10. But...

Who makes their beds, cooks their food, cleans their toilets, etc.?

[PoindexterOglethorpe]

26. Who exactly is the "they" in

". . . they don't employ anyone . . . ."

I believe unemployment is still pretty much at an all time low, as I type.

[Lurker Deluxe]

30. Nice to know

I worked for one of those monsters for 20 years, myself and the other 20K $100K+ a year peeps should have known better.

Who do you think. Employs the majority around the world?

[GladysKravitz]

11. 2025 XOM Capex

2025 XOM Capex is almost 30B. I don't think they're parking it. It would destroy their business.

[Bernardo de La Paz]

17. Welcome to DU. Good first post. You get it. . . . nt

[LetMyPeopleVote]

23. Welcome to DU

[Bernardo de La Paz]

12. There is a point but the example is Bogus and Untrue and Ignorant of basic economics

Exxon Mobil (note spelling is not "Mobile" ) makes money from oil, not bank interest. To get that oil they have to invest in science, engineering, discovery, assessment, extraction, and delivery. They accomplish those things by investing the money that comes in.

Also, to say "in the bank making them interest and doing nothing for the economy" is really stupid and ignorant. The money the bank loans to home buyers (good for the economy) comes from deposits. Many people, including poor people, are invested in oil companies through pension funds and retirement accounts through banks.

The real way to make the point that the Threads capture is trying to make is as follows:

Poor people spend money that comes in pretty much right away (money in motion), to meet expenses and keep creditors at bay. Those things are taken care of by tiny parts of billionaires' incomes. The rest of the money either gets invested (money in motion) or is parked in land (though real estate can be developed and used) or artwork or other non-productive assets. That money is not money in motion. It does not produce anything and does nothing for the economy.

[Codifer]

20. Another plus is

that money in motion generates some amount of sales tax (and income tax) which pays for roads, schools and other necessary infrastructure...... oh.... and research which generates even more.... well, maybe not anymore.

[Ruby the Liberal]

22. Yes - the Velocity of Money

The economy thrives when money is in circulation. This is a great example of why Top-down (supply side economics) has not and never will work - as that money gets parked.

Adding to this - the top multiplier of money spent vs actual money flowing through the economy is SNAP (food stamps). For every $1 that is spent, ~$1.60 flows through the economy.

Building bottom up and middle out - not the discredited top down - is how the economy thrives.

Thanks for the thread.

[ProfessorGAC]

24. They're Parking Money In A Bank?

$30 billion in planned capital.
They're paying around $4 dividend per share on around 4 billion shares. Another $16 billion.
They pay over $12 billion in payroll.
And, they buy around $100 billion (yes with a B) of crude oil per year.

That's just 4 expenses and they total nearly $160 billion, on $350 billion in total pretax revenue.
This Threads post shows a cluelessness of how businesses function.

[greyl]

28. "The restaurant owner gives it to the waitress,"

is one clue that post is dumb.

[Dreamer Tatum]

39. If Exxon "Mobile" made profits by way of savings accounts

the stock would be worth less than zero.

Silly, uninformed OP.