Naked Capitalism has the article The Global Corporate Saving Glut with commentary on and a link to another published article.
On the one hand, the VoxEU article does a fine job of assembling long-term data on a global basis. It demonstrates that the corporate savings glut is long standing and that is has been accompanied by a decline in personal savings.
However, it fails to depict what an unnatural state of affairs this is. The corporate sector as a whole in non-recessionary times ought to be net spending, as in borrowing and investing in growth.
You have to ask a deeper question. Why is it that the “natural” state for the corporate sector “as a whole in non-recessionary times ought to be net spending”?
It all comes down to my maxim “What part of no freakin’ customers do you not understand?”
If the efficiencies of automation, cost savings of outsourcing jobs, and unfair tilting of the market toward corporate interests decimate the buying power of your customers, what is there left to invest in?
Corporations aren’t investing in satisfying the needs of an increasing customer base exactly because their prior actions have shrunk the customer base below the break even point of the capacity they already have.
Wouldn’t it be rather insane to invest in more production capacity when you already have too much, and are shutting down some of what you already have?
I just can’t understand why economists are searching to find more trees while they are standing in the middle of a forest. The obvious answers are lying all around them and have been since the 1930s. Why can’t they see them?