Chart of the Decade: Corporations are Pessimistic About Future Growth

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Ezra Klein posted this chart today showing the steady accumulation of corporate cash and reserves over the past 15 years. I’d like to nominate it for chart of the decade or something. “Why corporations are holding so much more cash is an interesting mystery,” says Ezra, but I think it’s the key mystery of the past couple of decades. Total liquid assets held by nonfinancial corporations have increased from 7.7 percent of GDP to 11.3 percent of GDP.

Why? Why are corporations increasingly unable to find anything interesting to do with their cash in the real world? Why are they implicitly so pessimistic about opportunities for future growth? Is this the financial smoking gun for Tyler Cowen’s “great stagnation” thesis?

I’m not sure. But for 15 years the people with money to bet have been betting that they’ll get better returns investing in financial instruments than they will by investing in expansion of existing products and the invention of new ones. Until we figure out why, we’re going to be stuck with a combination of sluggish growth and financial bubbles as far as the eye can see.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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