PIMCO’s Bill Gross Has His “intellectual leanings shifting to the plight of labor”

Bill’s Summary of his “Investment Outlook” for November 2013:

1) Growth depends on investment and investment in part depends on an equitable rebalancing of personal income taxes, capital gains and carried interest.

2) The era of taxing “capital” at lower rates than “labor” should end.

3) Investors in the U.S. and elsewhere must look for investment in the real economy, not share buy-back maneuvers that artificially elevate stock prices.

http://www.pimco.com/EN/Insights/Pages/Scrooge-McDucks.aspx

**

So Bill finally recognizes what the rest of us have known for many years.  Better late than never.

After recognizing a problem, the next step is to take action to solve the problem.  Some helpful suggestions for Bill:

Hire more folks at PIMCO, even if that reduces PIMCO’s profits (his compatriots at Allianz will not like that at all, besides that would be more financialization of the US economy)

Direct PIMCO’s staff to divest any securities of companies who engage in poor corporate behavior, such as using “cash flow to buy back stock instead of reinvesting much of it in new plant and equipment” (the opposite of being an activist investor)

Become an activist investor to change corporate behavior and use cash flow to reinvest “in new plant and equipment” (the opposite of divesting)

Provide capital to incubate new companies that manufacture actual things (that is, “the real economy”)

Provide capital to fund a PAC that backs candidates for public office who will strive to change the tax code to make “an equitable rebalancing of personal income taxes, capital gains and carried interest”

Become a candidate for public office and strive to change the tax code to make “an equitable rebalancing of personal income taxes, capital gains and carried interest”

It will be interesting to see what actions Bill will take.

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