What Hillary Clinton gets wrong about 'quarterly capitalism': Businesses are actually investing more

[London Lover Man]

By Mark Zandi

Conventional wisdom says American businesses are myopic, focused only on making their companies look good next quarter in order to temporarily get their stock prices up. The thinking is that this is endemic in corporate culture and is at the root of the sluggish economic recovery and the wide gap between the haves and have nots.

In a speech today, Democratic presidential hopeful Hillary Clinton dubbed this “quarterly capitalism.” Clinton proposed a few policy changes aimed at reforming this dysfunctional culture. Most notable was to change the way capital gains are taxed — the taxes paid on the gains enjoyed by investors in stocks and other assets.

The premise for her proposals is off-base: America’s businesses aren’t short-term focused, at least not to the degree that it impedes long-term economic growth.

If they were, then what explains the fact that businesses are investing so much in research and development? According to the Bureau of Economic Analysis, R&D investment is expanding at a robust double-digit pace — and has never been greater relative to the size of the economy. These investments are as risky as they get, and if they payoff it is generally long into the future.

http://www.nydailynews.com/opinion/mark-zandi-hillary-wrong-quarterly-capitalism-article-1.2303721

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I verified the source as non right-wing.

[Adrahil]

1. And yet...

They don't invest in employees... Ya know... For the bottom line...

[JaneyVee]

2. Was just about to say the same...

That is the investment Hillary is emphasizing. All their investing is based solely on employers end and not employees end. The economy works best when there is a balance between labor and capital.

[Mnpaul]

3. I have to agree with Hillary here

Quarterly capitalism is a disaster. At my former employer, equipment was often shoved out the door before it was ready and quality suffered. There was always a mad rush at the end of the quarter. At my current employer, one of our customers puts off purchases at the end of the quarter and then demands extra at the beginning of the next. And then they are disappointed when they don't immediately get the extra product to make up for their quarterly game playing.

[zappaman]

4. You have quite the hawk eye for this kind of story!