More Growth, Please

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Remember that record pile of cash that U.S. companies have amassed over the past year? It’s finally being put to use:

For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they’re starting to deploy some of that money — not on hiring workers or building factories, but to prop up their share prices.

Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates.

….Some companies are buying back shares partly because they don’t want to invest in developing new products or services while consumer demand remains weak, analysts said. “They don’t know what they want to do with all the cash they’re sitting on,” said Zachary Karabell, president of RiverTwice Research.

I’ve always hated companies that do share buybacks. I know all the arguments in favor of it, but as far as I’m concerned it’s nothing more than a desperate effort to curry favor with shareholders and meet short-term bonus targets, carried out by a management team that has no idea how to grow their business. And if they don’t know how to grow their business, they should just announce that they’ve decided to adopt the corporate model of a regulated utility and start paying out regular, steadily growing dividends.

End of rant. Aside from all that, though, this particular news tells us once again that the most likely cause of slow economic growth right now isn’t structural, it’s cyclical. People aren’t buying stuff, and because of that businesses aren’t investing in growth. Increase demand, and they’ll start up again.

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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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