[Update: From the FLUBA's mouth to God's ear? As of 8:30 PM Sunday night, the comments are open]
Is that the message the usual suspects should be getting from the absence of a comments section for this post on Semi Daily Journal attacking Andrew Samwick's position regarding return on investment? It certainly is an odd response:
Well, let's put GDP growth at 1.9% per year, earnings of companies in the index growing at GDP growth minus one percentage point, so we have 0.9% annual returns coming from there. If we are to have a total return of 6.5% per year, that leaves us 5.6% per year to come from dividends and stock buybacks. At current earnings yields of 3.8% per year, that means that corporate net investment would have to be negative: businesses would have to be spending almost 150% of their net earnings on cash flowing to shareholders, and running down their capital stocks. That can't be done--not if you want to maintain the profitability of the businesses. Failing to replace your capital that wears out and becomes obsolete is a really bad idea.
Funny 'cash flowing' is mentioned, without seemingly realizing the effect 'depreciation' has on cash flow and profits. There's a good reason accountants add depreciation back to reported profit to get cash flow from operations.
Not to mention that the rate of real GDP growth is irrelevant, since firms profits are not constrained by it.